Attorney General of Zambia v Meer Care & Desai (A Firm) & Ors [2008] EWCA Civ 1007

[2008] EWCA Civ 1007Case Nos: 2007 / 1146, 1708, 1709, 1751, 1752
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE PETER SMITH
[2007] EWHC 952 and 1540 (Ch)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 31 July 2008
Before
LORD JUSTICE TUCKEYLORD JUSTICE LLOYDLORD JUSTICE LAWRENCE COLLINS
Between
Attorney General of ZambiaAppellantMeer Care & Desai (A Firm) & OrsRespondentTHE ATTORNEY GENERAL OF ZAMBIA for AND ON BEHALF OF THE REPUBLIC OF ZAMBIA Claimant Respondent- and -MEER CARE & DESAI (a firm) and others Defendants Appellants: MOHAMMED IQBAL MEER (appeals 1708 and 1709) NAYNESH GUNVANT DESAI (appeals 1146, 1751, 1752)
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Andrew Onslow Q.C. and Adam Kramer (instructed byReynolds Porter Chamberlain LLP) for Mr MeerNicholas Padfield Q.C., Andrew Veen and Arfan Khan(instructed by Mr Desai) for Mr DesaiMichael Sullivan Q.C. and Hannah Brown(instructed by DLA Piper UK LLP) for RespondentHearing Hearing dates: 24-27 June, 1-2 July 2008

Introduction

[1]This is the judgment of the court. It is given in relation to appeals arising from two orders made by Mr Justice Peter Smith following a long and unusual trial conducted between 31 October 2006 and 27 February 2007. By the proceedings the Attorney General of Zambia, on behalf of the Republic of Zambia, sought to establish civil liability on the part of up to twenty individuals and companies, to make good losses suffered by Zambia as a result of corrupt practices during the term of office of the former President, Dr Frederick Chiluba. The present appeals are by two of the defendants, partners in the firm of solicitors, Meer Care & Desai, Mr Meer and Mr Desai. The `judge’s principal judgment is at [2007] EWHC 952 (Ch). All our references to the judgment are to that judgment, and references to paragraph numbers, unless otherwise stated, are to paragraphs in that judgment.[2]Because this judgment is, necessarily but regrettably, very long, we will begin by stating the outcome of the appeals. This is that Mr Meer’s appeal is allowed, the orders against him and against the firm (and therefore against Mr Desai) set aside, and the claims against them dismissed.[3]In general, we will refer to the Claimant and Respondent in this judgment as Zambia, as if the Republic itself, rather than its official representative, were party to the proceedings.[4]The claim was put principally on the basis of conspiracy to defraud Zambia and, as regards those less directly involved, dishonest assistance in breaches of fiduciary duty. The primary conspirators were Dr Chiluba himself, Mr X F Chungu, Director-General of the Zambian Security and Intelligence Services (ZSIS) and Mrs Stella Chibanda, a senior official in the Zambian Ministry of Finance. Three different conspiracies were alleged, of which two were established, both being relevant to these appeals: the Zamtrop conspiracy and the BK conspiracy. The former is much the more important.

The two conspiracies

[5]The Zamtrop conspiracy was named after a bank account, known as the Zamtrop account, held at the Zambia National Commercial Bank Ltd (Zanaco) in London. Some US$52 million was alleged to have been transferred from Government funds into this account, ostensibly so that it could be expended for the benefit of ZSIS. It was alleged that this money was in fact paid on from there to various places, including accounts of two firms of solicitors, one of those being Meer Care & Desai (MCD), from which they were applied for the private benefit of Dr Chiluba, Mr X F Chungu and others. The Zamtrop account was opened in December 1995 and became operational later that month. Mr Chungu was, in effect, its sole signatory. More than US$9 million was paid out of the Zamtrop account to MCD’s client account. MCD’s client for these purposes was (in most cases) a Zambian company called Access Financial Services Ltd (AFSL), run and controlled by Mr Faustin Kabwe.[6]The Zamtrop account was set up, ostensibly, to be the channel for the payment to two American companies, Systems Innovation Inc (“Systems”) and Wilbain Technology Inc (“Wilbain”), of money which was said to be due to these companies for services rendered for the benefit of ZSIS. In fact the sums paid into the Zamtrop account far exceeded any sums properly due to these companies. Payments to the two companies started in May 1995 and until November 1995 they were made through other accounts. Once the Zamtrop account was in existence, it was used as the channel for these payments. Over the whole relevant period some $30 million was paid into the Zamtrop account to be paid on to Systems, but only $14 million was in fact so paid, while of $12 million paid in to cover payments to Wilbain, only $355,000 was paid on to Wilbain.[7]Grant Thornton conducted a tracing exercise, as experts jointly instructed on behalf of Zambia and of Cave Malik, the Second Defendant, and Bimal Thaker, the Eighth Defendant, to identify money originating in the Ministry of Finance which was paid to the Zamtrop account, and to trace where it had gone from there. They identified $7,021,020 as having been paid from the Ministry into the Zamtrop account and then out to MCD’s client account between 21 May 1996 and 4 April 2001. The judge held that Government money had gone into the Zamtrop account from other sources as well: see paragraph 274 of the judgment.[8]The BK conspiracy related to $20 million of Government money paid into one or other of two bank accounts, one called the Saloman account with ABN-AMRO, the other called the BK account, with KBC Bank Brugge Belgium, the initials BK being those of Betti Katumbi, sister-in-law of Mr Raphael Soriano. Mr Soriano was appointed to represent the Government in negotiating and purchasing military equipment. A sales contract was concluded on 30 August 1999 with a Bulgarian vendor company. Soon after that a remarkable facility agreement was entered into between the Government and Mr Soriano under which the Government had to pay money up front which was to be paid on to the vendor. This agreement was later varied orally, and ultimately required the Government to pay $20 million to one or other of the two bank accounts mentioned, which were under the control of Mr Soriano. The judge was satisfied that no payments had been made to the vendor, no arms had been delivered, the money in the two accounts had disappeared, and that the whole exercise had been no more than a cover for fraud.[9]In respect of both conspiracies the judge held that Dr Chiluba, Mr X F Chungu and Mrs Chibanda all acted in breach of fiduciary duties owed by them to Zambia, and they were also parties to conspiracies to defraud Zambia of money both by the Zamtrop conspiracy and by the BK conspiracy. In turn he held that Mr Kabwe (for his part in both conspiracies) and Mr Soriano (as regards the BK conspiracy) were in breach of fiduciary duty and had dishonestly assisted the breaches of fiduciary duty on the part of the primary conspirators, as well as participating in more specific conspiracies relating to the sums which they received or controlled.[10]As against parties more distant from the primary conspiracies, the claim was limited to sums traced by Grant Thornton as having originated in the Ministry of Finance and as having been received by the particular defendant, plus the money received by that defendant which could be proved otherwise to have come from the Government. In relation to the Zamtrop conspiracy the principal amount claimed against MCD was $7,021,020, which had been traced through from the Ministry of Finance via the Zamtrop account to MCD, plus $1,612,768 in respect of the additional Government money identified in paragraph 274 of the judgment. The total amount which had been paid from the Zamtrop account to MCD was $9,260,000, so the aggregate claim of $8,633,788 did not exceed that amount. As regards the BK conspiracy almost $1.3 million had been paid to MCD, but a credit of over $840,000 fell to be allowed, so the net amount claimed was $456,118.

Meer Care & Desai

[11]MCD is a firm of solicitors of which there are only two partners properly so-called: Mr Meer and Mr Desai. As already mentioned, large sums of Government money went into its client account. These were then paid out, on the instructions of Mr Kabwe, for purposes which the judge held not to be a legitimate application of Government money – in many cases the purpose was the personal benefit of Mr Kabwe or other individuals, including Dr Chiluba and Mr X F Chungu. Mr Meer was directly involved in the misapplication of this money. The judge held that he acted dishonestly and was himself a conspirator, though only to the extent of the funds passing through his firm’s client account. Mr Desai was not alleged to be dishonest or a conspirator. He was held liable on the basis of vicarious responsibility, under section 10 of the Partnership Act 1890, for the acts of his partner.[12]The claim was put both in conspiracy and on the basis of constructive trust, through dishonest assistance in the breach of fiduciary duty of the primary conspirators. The judge held that MCD was liable on both counts, the sum for which the firm was liable being the same on each head of liability. Before us the main debate focussed on the constructive trust claim. The same facts are relied on to make good each basis of liability. We propose to concentrate on the constructive trust aspect.

The grounds of appeal

[13]By their respective appeals Mr Meer and Mr Desai challenge the judge’s findings of liability. Mr Meer contends that the judge’s decision that he had known that what he was assisting was dishonest conduct on the part of Mr Kabwe and Mr X F Chungu was wrong, not being based on proper or sufficient findings against him, or a proper consideration of his evidence and the circumstances generally. He also has secondary grounds of appeal, first that the judge had wrongly rejected a limitation defence as regards matters occurring more than 6 years before the issue of the Claim Form and secondly that the judge had been wrong not to allow him more credit against what would otherwise be his liability on account of assets derived from money which had passed through his firm’s client account, and which were later recovered by Zambia.[14]The primary ground for Mr Desai’s appeal is that the judge’s decision that he was liable for Mr Meer’s acts vicariously under section 10 of the Partnership Act 1890 was inconsistent with the judge’s findings of fact, and that such findings as might have supported the decision were not justified by the evidence.[15]In addition Mr Desai has a separate appeal against the judge’s order for costs, even if the judgment against him is otherwise right. His application for permission to appeal in that respect was adjourned to the hearing of the main appeals.

The proceedings

[16]These appeals need to be seen in the context of the proceedings as a whole. The Claim Form was issued on 6 October 2004. Freezing orders were obtained against a number of defendants later in 2004. From an early stage the case was reserved to Mr Justice Peter Smith, who heard all the case management conferences, and the trial. The case proceeded against 20 defendants, some based in Zambia, some in England, and others elsewhere. There was a distinct issue as against some of the defendants relating to the ownership of some properties in Belgium. The judge held a hearing as to that in 2005, which led to the issue being conceded in favour of Zambia. The judge was determined to see that the case be brought to trial without delay, despite a number of serious problems as regards its management. His directions were challenged unsuccessfully before the trial by several of the Zambian parties: [2006] EWCA Civ 390. The main trial commenced on 31 October 2006, two years after the issue of the Claim Form. It ran for 51 days and concluded on 27 February 2007. The judge had set this timetable, with the benefit of estimates from Counsel of the time required for the various stages of the trial, and he applied the timetable with reasonable rigour in order to be able to complete the trial in the time allowed. In the course of the trial the judge sat for two weeks or so as a Special Examiner in Lusaka, so that defendants based in Zambia who wished to give evidence, but who were not allowed out of Zambia because of pending criminal proceedings there, could do so in the presence of the judge, rather than by means of a video link. The proceedings in Zambia were protected by ring-fencing arrangements put in place in order not to jeopardise the position of those who were also accused in the criminal proceedings. A video link was maintained in place throughout the proceedings so that those in Zambia could observe what was happening in court in London when the judge was sitting here, and vice versa. By no means all the defendants took part in the proceedings, despite the protective arrangements to which I have referred.[17]Having heard 47 witnesses of fact for Zambia, as well as those of the defendants who chose to participate in the case and to give evidence, and with documents comprised in more than 100 trial bundles to cope with, the judge handed down his judgment on 4 May 2007, just over two months after reserving judgment. After submissions as to the form of order to give effect to his judgment, he made an order on 4 May by which thirteen of the defendants were made liable: Dr Chiluba, Mr X F Chungu, Mr Shansonga, Mrs Chibanda, Mr Aaron Chungu, Mr Faustin Kabwe, Mr Francis Kaunda, Boutique Basile, Nebraska Services Ltd, Raphael Soriano, Mr Meer, MCD as a firm (so as to affect Mr Desai), Mr Bimal Thaker (another solicitor) and his firm Cave Malik, with a finding that his father Mr Bhupendra Bhailal Thaker was a partner in the firm (and thus also liable). Certain consequential and quantification issues were reserved for further argument. That argument led to a further judgment, [2007] EWHC 1540 (Ch), and a further order dated 29 June 2007 by which the sums due from each party liable (as listed above) were finally determined. Dr Chiluba was ordered to pay US$57,124,422.72 and both Mr X F Chungu and Mrs Chibanda sums exceeding $56 million. MCD was ordered to pay $11,135,665.61, and, together with others, a substantial proportion of Zambia’s costs of the proceedings. The judge refused permission to appeal.[18]Appellant’s Notices were filed by Mr Meer and Mr Desai, Mr Bimal Thaker and his father Mr B B Thaker, Mr Shansonga, Mr Aaron Chungu, Mr Faustin Kabwe and Boutique Basile. Permission to appeal was granted by this court, on paper or after an oral hearing, to Mr Meer and Mr Desai, Mr Bimal Thaker and his father, Mr Shansonga and Boutique Basile. The appeals by Mr Bimal Thaker and his father have been compromised. Mr Shansonga withdrew his appeal at a late stage. The appeal by Boutique Basile, which raised altogether different points, has been heard by another constitution of this court: see [2008] EWCA Civ 754. We are therefore left with appeals by Mr Meer and Mr Desai as the only remaining challenges to the judge’s orders.[19]The case was a remarkable example of effective proactive judicial case management. The judge was imaginative and determined in seeking to ensure that the case was brought to trial with minimum delay, while ensuring fair treatment of all parties. The judge recorded that he had been much assisted by the response of the lawyers involved for all parties to the timetable which he imposed, and by their presentation of their cases at trial. In turn the appeals involved some 40 bundles of materials, but the court was much assisted by the careful presentation of the parties’ respective submissions both in written and in oral form.

Mr Meer’s main ground of appeal: dishonest assistance

[20]The first ground of appeal on Mr Meer’s part involved a contention that the judge had approached the question of constructive trust liability on the basis of the wrong legal test. This would have involved a comparison between statements on the subject in recent cases in the Privy Council, the House of Lords and the Court of Appeal. The judge undertook that task, with further assistance from extra-judicial observations on the part of Sir Anthony Clarke MR and others. However, shortly before the appeals came on for hearing, Mr Onslow Q.C., for Mr Meer, suggested that it would not be necessary for the court to embark on that exercise. He contended that Mr Meer could not be held to be liable in constructive trust unless he either knew that the instructions which he carried out involved, in effect, handling stolen money, or he had a clear suspicion that this was the case which he chose to ignore. He accepted that if Mr Meer was found to have either of those states of mind, then he was correctly held liable. The judge applied that test, and held Mr Meer liable on that basis; Mr Onslow’s argument was that the test was correct but it was not correctly applied on the facts. Mr Sullivan Q.C. for the Respondent accepted, indeed asserted, that this was the correct test. In those circumstances the court did not need to consider the recent cases.[21]If either aspect of the test is satisfied on the facts, Mr Meer would be correctly characterised as dishonest. Plainly that would be so if he actually knew that his client had no right to require the relevant funds in the firm’s client account to be paid out to the particular person or for the particular purpose for which he instructed Mr Meer to apply the money. Equally, if Mr Meer had a clear suspicion that this was the case and he deliberately decided not to enquire in order to avoid having confirmation that it was so, that is properly characterised as dishonesty, of the kind often called blind-eye, or Nelsonian: see for example Lord Scott of Foscote in Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd[2001] UKHL 1, [2003] 1 AC 469, at paragraphs 112 to 116. The facts of which knowledge was to be imputed in that case did not involve dishonesty, but the principle of establishing knowledge in this way is the same whether what is to be found to be known is dishonesty or something else – in that case the unseaworthiness of a vessel.[22]Accordingly, the issue on the first and main ground of appeal is one of fact, namely whether the judge rightly applied the test of actual or Nelsonian knowledge so as to find that Mr Meer knew that to comply with his instructions as regards payment of money out of his client account involved, essentially, handling stolen money. In order to address this ground of appeal, therefore, it is necessary to deal rather extensively with several aspects of the facts of the case. In doing so we have to consider contemporary documentary material, evidence and submissions to the Office for the Supervision of Solicitors from 2003-4, and the evidence given in the course of the trial, as well as some other material.[23]The essence of Mr Meer’s position on this aspect of the appeal is that the judge’s finding, that he knew (actually or on a Nelsonian basis) that the money passing through the firm’s client account was Government money which was being, or had been, stolen, and that the instructions which he received and implemented were for the improper and dishonest application of those funds, as part of the theft, was not based on a proper or fair assessment of the evidence, that the judge’s errors were so substantial that the finding could not stand, and that the Court of Appeal should make its own finding on the point. He relied on the proposition that there is no evidence of dishonesty and no possible motive on his part, there is no dispute as to any of the objectively ascertainable primary facts, and the only issue is as to his state of mind. It is accepted that what was going on was a dishonest exercise in stealing Zambian Government money, but Mr Meer contended that he had no idea that this was what was happening. He may have been negligent in failing to take precautions, on his own behalf or otherwise, but he did not in fact know or suspect that the operation was fraudulent. He argued that not only did he have no possible motive for giving dishonest assistance to such a scheme, but there were strong reasons why he should not have done, and why it should not be supposed that he would. We will elaborate on those in due course, but it is correct to say that really the only questions of fact which the judge had to decide on this aspect of the case were as to Mr Meer’s state of mind at different times.

Meer Care & Desai: the firm and its partners

[24]Mr Meer was born in South Africa in 1940, and was brought up there until he left school. He moved to this country where eventually he was able to read for the Bar and was called as a barrister in 1967. He was unable to return to South Africa because of the apartheid regime. He and his family had a history of protest activity against that regime. Moreover, he had married a woman of different racial origin, and South African law would have prohibited them from living together. Instead, he moved to Zambia to complete his legal studies, where he was admitted to the fused legal profession in 1968. He was in private practice in Zambia from then until 1977. After that, until 1986, he worked as an in-house lawyer for companies including acting from 1982 to 1986 as General Counsel to a company called ITM International, in London, and for part of that time as Vice President of one of its subsidiaries, Meridien International Bank. In 1987 he re-qualified as a solicitor in England, and joined the firm which came to be called Meer Care & Desai, in partnership with Mr Desai. He retained and still retains family and professional contacts in South Africa, where he was admitted as an attorney, conveyancer and notary public in the 1990s. He acted as a lawyer for Nelson Mandela while the latter was still in prison, continued to do so after his release, and is still involved in several trusts associated with Mr Mandela. Mr Mandela provided a character reference for him in 2004 in relation to an investigation by the Law Society, in which he said that he had found Mr Meer to be “scrupulously honest, meticulous, tactful and discreet”. Thus, by 1995 he was 55 years old, and had a successful international legal practice.[25]The areas of practice in which Mr Meer has been active are primarily commercial and business affairs, often with an international aspect. He presented himself as having considerable knowledge and experience in business matters, including on an international scale, and asserted that his professional standards of honesty and probity were of the highest. The judge commented at paragraph 543 that he was “clearly intelligent and very experienced”.[26]Mr Desai was born in Zambia in 1960. His family left Zambia in 1972 and he has not been back since 1975. He said that he had little interest in current affairs in Zambia. He was admitted as a solicitor in England in 1986 and then joined the firm which became MCD. During his period of private practice in Zambia, Mr Meer had been Mr Desai’s uncle’s lawyer, which is how the two men knew each other. Mr Meer is the managing and senior partner in MCD, with slightly more than a 50% share in the partnership. Mr Desai said that his practice was broadly commercial, including conveyancing (which Mr Meer does not do), and he has his own clients, whom he described as ranging from the ordinary man in the street to successful domestic and international businessmen and the great and the good.[27]Mrs M Meer was held out as a partner of the firm, but in fact she was salaried, and therefore not a partner properly so-called. Mr Care was a consultant.

Mr Kabwe and Access Financial Services Ltd

[28]Mr Meer had known Mr Kabwe of old, from the time when Mr Meer worked in Zambia. Mr Kabwe had qualified as a chartered accountant and, Mr Meer said, was of impeccable reputation until the revelation in 2002 of the matters which came to be the subject of these proceedings. Mr Kabwe had been a client of Mr Meer in Zambia, and later had (like Mr Meer) worked for ITM International and for Meridien Bank (in both cases as chief financial officer). MCD acted for Mr Kabwe on a property transaction in London in 1992, in respect of which it had a ledger account, 2535/2. Between September and November 1995 MCD received three payments to the credit of Mr Kabwe which were credited to that ledger account, arising indirectly from that property transaction.[29]In April 1995 Mr Kabwe made contact with Mr Meer in London, and told him that he was setting up a new company, which was AFSL, to provide financial services to businesses in Zambia, and that he would like MCD to act as AFSL’s London solicitors on various matters arising from its business.[30]In July 1995 AFSL applied for, and in October 1995 it was granted, a licence to carry on financial services, but not banking, by the Bank of Zambia. Mr Meer expected that he would be asked to do legal work for AFSL, or for or in relation to its clients, but he had not had any such instructions by the time of the meeting which we now describe.

The meeting at the Churchill Hotel

[31]In the autumn of 1995 Mr Kabwe asked Mr Meer to attend a breakfast meeting with himself and Mr X F Chungu at the Churchill Hotel, Portman Square, in London. Neither Mr Chungu nor Mr Kabwe gave evidence before the judge, so he had only Mr Meer’s account of the meeting. Mr Meer did not know Mr Chungu, but knew who he was. According to his account, at the meeting Mr Chungu first asked Mr Meer to undertake a diplomatic role on behalf of Zambia as between Zambia and South Africa, explaining this request by reference to Mr Meer being known to be the lawyer for Mr Mandela, at that time President of South Africa. Mr Meer declined that suggestion. Next Mr Chungu and Mr Kabwe explained that AFSL would be performing services for ZSIS and that it was intended that money be remitted to MCD for the credit of AFSL in respect of such services. Mr Chungu said that AFSL would be engaged in governmental activities, though he did not explain the nature of these. Mr Meer said that he agreed to assist AFSL (and in turn Zambia) in dealing with remittances for the credit of AFSL. He said he had no reason to doubt that AFSL was carrying out work for the Zambian Government, and he did not enquire into the precise nature of this work. He assumed that, because it had to do with ZSIS, there would be a desire for secrecy. He believed or assumed that AFSL did not have a bank account in England. He said that he was motivated, among other things, by a desire to assist Zambia, a country to which he was grateful for enabling him to embark on his legal career at a time when he would have been unable to practise in South Africa. The judge summarised the meeting at paragraph 544 of his judgment, where he describes the summary as being Mr Meer’s contention. The text is taken from the written closing submissions of Counsel for Zambia, so it is their version of Mr Meer’s evidence, rather than Mr Meer’s own version. Though he did not say so in terms, it is clear that the judge accepted the account of the meeting, as so summarised. The three elements were identified as follows (we have inserted two commas in paragraph (1) for clarity):
“(1) XFC asked him to act for AFSL, who would be performing various services for ZSIS, in the receipt and disbursement of Government monies. (2) He assumed involvement of MCD was required for reasons of discretion in the conduct of the affairs of ZSIS although he does not suggest he was given any explanation for using MCD. (3) He agreed to assist AFSL (and thus the Republic he believed) in the receipt and disbursement of these monies.”
[32]Mr Onslow submitted that this summary over-simplified and distorted what was unchallenged evidence on Mr Meer’s part. For one thing, Mr Meer said that the request that he act for AFSL came jointly from Mr Chungu and Mr Kabwe, rather than just from Mr Chungu, although Mr Chungu took the lead in the discussions. He also submitted that to refer, as the judge did, to “the Churchill Hotel Agreement” suggested something far more formal and specific than the informal discussion that in fact took place, with a view to Mr Meer undertaking a particular service for a company in relation to which, though it was not yet a client, nevertheless there had already been separate discussions about the firm doing work for it, and its owner was an existing client.[33]In his witness statement Mr Meer described what the judge summarised at point (1) above in these words: AFSL would be performing services for ZSIS and it was intended that monies should be remitted to MCD “for the credit of AFSL in respect of such services”, and AFSL “would be engaged in governmental activities”, the nature of which was not explained.[34]So far as the judge’s points (2) and (3) are concerned, Mr Meer’s evidence in his witness statement was this:
“34. I agreed to assist AFSL (and in turn, Zambia) in dealing with the remittances of these monies for its credit. I had no reason to doubt that AFSL was carrying out work for the Zambian government. I did not inquire into the precise nature of this work. ZSIS was an intelligence service and I assumed that by its very nature, it would not always want its activities to be in the public domain. I knew, for instance, that its expenditure was not subject to parliamentary scrutiny, and that it reported directly to the President. I assumed that the need for discretion in the conduct of its affairs was the reason that monies were remitted to Meer Care and Desai for AFSL’s purposes and not directly to AFSL. That is not to say that I thought that either Mr Chungu or Mr Kabwe was engaged in any attempt to conceal the destination of funds from the Zambian authorities. My understanding (from admittedly limited experience) is simply that every intelligence agency (whether MI5/MI6 or ZSIS) conducts its affairs with discretion. To enquire further would have necessitated my questioning the President of Zambia, since he was Mr Chungu’s only immediate superior. I trusted Mr Kabwe.”
[35]Mr Onslow made a number of points about the meeting, on the basis of Mr Meer’s account of it. It was relatively informal. It was apparent to Mr Meer that there had been prior discussions between Mr Chungu and Mr Kabwe about the proposition to be put to Mr Meer. AFSL would be carrying out services, unspecified, for ZSIS, doing governmental activities. ZSIS would use both AFSL and MCD’s client account to disguise its role in relation to the activities undertaken by AFSL. Mr Meer was not asked to monitor the application of the funds, but merely to act for AFSL in relation to the remittances out of the funds provided. MCD would not be paid for this service, nor would the firm do anything other than implement the instructions given from time to time by Mr Kabwe on behalf of AFSL. It was not suggested that this would be the only activity on which MCD acted for AFSL, nor that the money remitted under this arrangement would be the only funds that the firm would receive to AFSL’s credit. All of those points seem to be fairly made on the basis of Mr Meer’s evidence as to what was said at the Churchill Hotel meeting, which was not in itself challenged in cross-examination.[36]It is clear that this meeting was unusual and important in a number of respects. It was Mr Meer’s first encounter with Mr X F Chungu of whom he knew, and who the judge described as being of an “intimidatory nature” (paragraph 138) and “not a man to be trifled with” (paragraph 427). The judge also said that Mr Meer was initially wary about becoming involved with ZSIS, though Mr Onslow submitted that there was no evidential basis for that finding. Mr Meer said in his witness statement that he was curious to find out what Mr Chungu wanted to see him about, and that he was not unused to dealing with high ranking government officials. Whatever he knew of the operations of security services, he had never before been asked to do anything to assist such operations. Moreover, although he described his firm’s activities as including a wider range of services, especially for foreign-based clients, than would perhaps be normal for an English solicitors’ firm, there was no other client for whom the firm had offered a service which was essentially that of receiving and disbursing money, unconnected with legal services. He did expect to do legal work for AFSL, or on its behalf for its clients, but he was not led to expect that the assistance which he was asked to provide by Mr Chungu and Mr Kabwe at this meeting would be connected with legal work.[37]Zambia asserted that Mr Meer was a party to a conspiracy with Mr Chungu and Mr Kabwe by his agreement to the request put to him at this stage. It is plain from the judge’s other findings (and it is not disputed on this appeal) that Mr Chungu and Mr Kabwe were already preparing to implement the Zamtrop conspiracy, and that they approached Mr Meer in order to find a solicitor whom they could use to assist in laundering the money paid into the Zamtrop account. AFSL itself may well have been set up to be used for the conspiracy. It may be that the invitation to Mr Meer to represent the Government in diplomatic relations with South Africa was not seriously meant, and was intended to encourage him to believe that the approach was official, perhaps to flatter him (as it did), and so to disguise the true purpose of the approach.[38]The judge held, relying expressly on Mr Meer’s background of honesty and integrity, that he did not join the conspiracy at that stage (paragraph 568). It follows from this finding that the judge accepted that Mr Meer took what was said to him in the course of the meeting at face value, and believed it.[39]Mr Meer did not record the meeting or the discussion in any file note, still less any letter to Mr Kabwe or anyone else, nor did he require a letter of instruction from Mr Kabwe, and he did not ask any question in the course of the meeting, or thereafter, as to how he was to proceed in respect of remittances to be made under the arrangement to which he had agreed. Nor, as the judge found, did he tell Mr Desai of the meeting in advance or of the discussion at it afterwards. Mr Meer proceeded on the basis that discretion or secrecy was likely to be a requisite of any secret service activity, and was implicitly part of the reason for the approach to him.[40]A fair point could be made that it might be difficult to know, from the outside so to speak, whether a particular disbursement of money was or was not for the purposes of ZSIS. Mr Meer did not raise the question, which might have been regarded as desirable for his own protection, as to how he was to be satisfied that an instruction for payment was one that it was proper for him to fulfil as being for the purposes of ZSIS. He never sought any such protection, either at the outset or later when he was instructed to make payments out. His position was, consistently thereafter, that it was not necessary for him to do anything other than receive Mr Kabwe’s instructions as to a payment to be made, and to act on it. Mr Sullivan showed us that his expressed position shifted over time in a number of respects, but he never did question any instruction that Mr Kabwe gave him as regards the disbursement of money. The essence of his case is that he did trust Mr Kabwe, that he believed that Mr Kabwe was trusted by ZSIS, and that the arrangement was for ZSIS and Mr Kabwe to agree between themselves what Mr Kabwe was to do on behalf of ZSIS, and what payments were to be made to whom, and it was not his task or responsibility to enquire or to satisfy himself that the payments he was told to make were proper, so that enquiry on his part was not necessary.[41]Between November 1995 and April 2001 large sums were credited to one or another of various ledgers in MCD’s client account, on the instructions of Mr Kabwe. Many of these payments came straight from the Zamtrop account. Four of them, at the end, came from the BK account. On the other hand, at least $3 million of the payments received came from sources which are not alleged to have been Government money. Most of these moneys were paid out on Mr Kabwe’s instructions for different purposes, some to AFSL in Zambia, some to Cave Malik, some to Mr Kabwe or his family, and others to various third parties.[42]The underlying reality, as the judge found, is that almost all of the payments from the Zamtrop account, and all four of the BK payments, emanated from the Ministry of Finance or from other Government sources, and that none of the payments out of the MCD client account was applied for the benefit of ZSIS or at its direction. They were all used for the personal benefit of Dr Chiluba, Mr Chungu, Mr Kabwe or others involved in the conspiracies. In effect, each of the two conspiracies was a way of stealing large sums of money from the Government, and of laundering the money in such a way that the theft would not be apparent.[43]Mr Meer understood that all of the Zamtrop payments came from the Government. Given that there were other credits which did not, or did not appear to, come from the Government, his case was that he did not understand any other payments, and in particular the BK payments, to represent Government money. As regards the payments out of the client account, his evidence was that he did not know or suspect that they amounted, in effect, to handling stolen Government money.[44]The issues for the judge were, therefore, whether Mr Meer knew that the source of the BK payments was Government money, and whether he knew that the Zamtrop money and the BK money was stolen money, either already in his client account or at any rate once it was paid out on the instructions of Mr Kabwe. In either respect, it is sufficient for Zambia to show either that Mr Meer actually knew that it was so, or that he had a clear suspicion that it was and deliberately chose not to enquire, so that he would not be told the truth.[45]In order to evaluate the challenge mounted by Mr Onslow, on behalf of Mr Meer, to the judge’s finding that Mr Meer had the knowledge necessary for a finding that he was a dishonest assister and a conspirator, it is necessary to set out some of the facts at some length. Payments through MCD’s client account after the Churchill Hotel meeting

The first payment

[46]On 30 November 1995 MCD received $249,998.51, which was placed to the credit of a new ledger 2535/1, identified as FM Kabwe Commercial. That was the first payment said to be relevant to the involvement of MCD in relation to the Zamtrop conspiracy. It is not in fact part of the amount for which Zambia claims to establish liability, but it is nevertheless relevant as part of the story.[47]The meeting at the Churchill Hotel is not dated more precisely than the autumn of 1995, but it preceded the receipt of this sum. The Zamtrop account had not been opened by then, though this payment did come from Zanaco, the state-owned bank at which the Zamtrop account came to be established during December 1995. It also came by virtue of an instruction which had the initials XFC/DN. No doubt it was authorised by Mr X F Chungu. Mr Sullivan submitted that Mr Meer’s evidence in his witness statement showed that he regarded it as having been paid and received as a result of the meeting at the Churchill Hotel, and as being the first payment of money which he had agreed to handle in accordance with the request made in the course of that meeting. Mr Onslow took issue with that, but both agreed that, from their different standpoints, it is instructive to consider how Mr Kabwe and Mr Meer respectively proceeded in respect of this money.[48]Mr Kabwe wrote first to Mr Meer on 23 November, about another matter. In the course of that letter he said that he was expecting a fairly large payment into the account “as discussed”, and asked to be notified of its receipt as he had “some urgent disbursements to make”. On the next day he wrote to MCD to say that he had instructed Zanaco to remit $250,000 to them, and instructed the firm to “hold the same to my credit until further instructions”.[49]Mr Meer opened a new ledger account to which this receipt was credited, 2535/1, and identified it as FM Kabwe Commercial to distinguish it from the private matters to which the existing ledger 2535/2 related. A new ledger would in any event have been needed for US dollar payments. Mr Meer said in his witness statement (paragraph 42) that he probably ought to have had the new ledger identified as relating to AFSL, not Mr Kabwe, because it had been made clear to him by Mr X F Chungu and Mr Kabwe that it was AFSL that would be carrying out services for ZSIS, and therefore AFSL would be his client. He also said, at paragraph 41, that he had been expecting money to come in for AFSL as a result of the meeting, and was therefore not surprised when it came in.[50]On 7 December 1995, on Mr Kabwe’s instructions, the firm paid him $4,300 cash (as well as £5,000 out of his personal ledger, 2535/2). On the same day he gave instructions to pay $40,000 to Mr Swatulani Munthali and $20,000 to Mr Osman Samantar. Both instructions were duly carried out. On 20 December Mr Kabwe gave further instructions to transfer $15,321.45 by wire transfer to a bank account in New York for the benefit of AFSL, to “come out of the recently opened US $ account in my name”. On 21 December Mr Kabwe gave instructions to make “the following further transfer from the US $ account”, namely $75,000 to Sports Simulation Inc, at another bank account in New York. Both these instructions were implemented.[51]The four letters of instruction to the firm’s bank to make these several transfers were signed by both Mr Meer and Mr Desai. The firm’s mandate to its bank required two partners to sign any such instruction, though with a fallback arrangement, if only one was available, whereby the single signature was verified by a special authorisation code. Mrs Meer, as a salaried partner, was a signatory, but very rarely signed any such instruction. Mr Desai signed every instruction relevant to this case, with Mr Meer signing the large majority of them as well.[52]On 2 January 1996 Mr Kabwe instructed Mr Meer to pay £5,000, which came out of his personal ledger, to Atlas Trading Ltd, by credit to a London account, “to refund Mohammed Omer for assistance availed to me over the holiday period”. That instruction, and a further instruction on or about 8 January 1996 to remit $12,000 to a bank account in Los Angeles for Mr Chabala Kaunda (who, according to the evidence, is a son of Mr Francis Kaunda, the chairman of AFSL), were implemented by letters to the firm’s bank on 3 and 8 January.

The second payment

[53]On 22 January 1996 the firm’s client account received the second relevant remittance, of $373,988.68, from Paine Webber. On the same day Mr Kabwe had instructed the firm to remit $15,000 to his wife, Mrs Irene Kabwe, at a bank account in New York who, it was said “urgently requires some money to settle outstanding commitments”. The firm gave the requested instructions to their bank on the next day. Following the receipt of the second remittance, Mr Kabwe gave a series of further instructions for payments. On 26 January his fax to Mr Meer said:
“I have a number of payments to make, but I am not quite sure whether there is enough money left for this. Please advise as soon as further funds are received, which should be any time now.”
[54]Subject to the availability of funds he authorised payments of $5,000 to an account in Japan for the benefit of Tokyo Overseas Corporation, the remitter being identified as ALBS Investments Ltd, Lusaka, and of £6,000 to an account in England for the benefit of Mr M C Mok and Mrs J A Mok. The latter was to come out of Mr Kabwe’s sterling account (i.e. the private ledger 2535/2) and was described as being payment for a vehicle which Mr Kabwe was buying in Zambia from Mr Mok.[55]On 30 January Mr Kabwe instructed the firm to make three more US dollar payments “from funds recently received”: $50,000 to Rajani Investments Inc, at an account in Canada, the remitter to be identified as Laiton Simbeye; $50,000 to an account in New York for the benefit of AFSL; $20,000 to an account in Australia for the credit of Grove International Pty Ltd, the remitter being identified as Kabelenga Pharmaceuticals Ltd. It seems that the last of these instructions required discussion as Mr Meer asked Mr Kabwe to telephone him urgently, and the identity of the payee changed (to that which we have identified) from the name given in the original instruction. The instructions were implemented by instructions to the firm’s bank on 31 January. On 20 February Mr Kabwe instructed the firm to make two payments of $100,000, one to Kudu Enterprises Ltd, as from Salim Patel, at an account in Leicester, and the other to an account in New York for a bank in Dubai, for the ultimate benefit of Alnida Textiles and Ready Made Garments Trading Est, Dubai, as from Aslam Aslam. The firm duly obliged on 4 March, and on 6 March, at Mr Kabwe’s request, Mr Meer sent him a reconciliation of the dollar and sterling accounts, showing credit balances of $92,558.64 and £13,081.12.[56]On 8 March the firm instructed its bank to pay $16,872 to MCFI International Co Ltd in Mauritius, on behalf of Mr Kabwe. Later in March, after two small payments of sterling cash to Mr Kabwe, the firm instructed its bank, on Mr Kabwe’s instructions but as from AFSL, to remit a sum in Japanese yen which was debited as $52,580.28 to a bank in Japan for the credit of Mitsui & Co Ltd, said to be in respect of “vehicle order from Toyota Zambia”. At the same time, the firm paid $6,000 cash (and a smaller sum in sterling) to Mr Kabwe. In April on Mr Kabwe’s instructions the firm arranged for a bank draft for $2,940.50 to be issued in favour of American Express Company, for the benefit of Mrs Kabwe, and in May it instructed its bank to remit $6,000 to a bank account in Boston (Mass.) for Mr Kabwe’s daughter Mwenya Kabwe.[57]Those are the payments made, up to the date of the first receipt from the Zamtrop account itself, out of the US dollar ledger account, 2535/1, which Mr Meer had opened to receive the first payment. The few sterling payments which we have mentioned are irrelevant to the case, since they were debited against the credit balance on Mr Kabwe’s private sterling ledger 2535/2. We mention them because they were dealt with in exactly the same way as the other instructions.

The first payment from the Zamtrop account

[58]On 21 May 1996, $309,988.66 was paid to MCD’s client account by Zanaco out of the Zamtrop account. It was the first of about 50 such payments received between then and April 2001, amounting in all to over $9 million. Before that receipt the credit balance on the ledger was about $24,900. The Government’s case, which is well made out on Mr Sullivan’s submissions and was accepted by the judge, is that Mr Meer acted on Mr Kabwe’s instructions in relation to all requests for payments out of the sums so paid in exactly the same manner as he had in relation to the instructions that we have already mentioned, namely he followed them without question, having no regard to whether any particular payment could be justified as being for ZSIS’ purposes.[59]We need not go into any great detail as to the payments out after this date, but we will describe the first few payments after the first Zamtrop receipt, and we will also deal with some payments in respect of Harptree Holdings Ltd, with some other payments to which particular attention was given in the course of the evidence, and with some of the last payments debited to the relevant ledgers.[60]On 26 May 1996, Mr Kabwe wrote to Mr Meer asking him to make a payment “from funds recently credited to the client’s account with you”, which was to be of $60,000, to a bank account in Switzerland, for the benefit of Mr Ib Thoger Daell, the remitter being identified as “Zamdaell Zambia Ltd (as arranged by Murray Dewar)”. On the same day he instructed the firm to pay “on my behalf” $40,161 to Citibank in New York for the benefit of First Alliance Bank (Z) Ltd, the sender being AFSL. Though not stated in terms in the instruction, this appears to be treated as a payment for the benefit of AFSL itself in Zambia. On 30 May the next instruction was to pay “on my behalf” $50,000 to Mr H Patel at a bank account in London, the remitter being identified as Africa Direct Bureau de Change. On the next day there was an instruction to pay “on my behalf” $50,000 to a bank in New York, for the benefit of a bank in Zambia, and for the ultimate benefit of Africa Direct Bureau de Change, which was also identified as the remitter. On the same day the instruction was to pay “on my behalf” $12,000 to Mrs Kabwe in New York. A few days later $50,000 was to go “on my behalf” to AFSL, via the same account in New York as before, the remitter being identified as Africa Direct Bureau de Change. All these instructions were carried out.

The ledgers

[61]Up to that time there were only two relevant ledgers: 2535/2 which was the old sterling ledger for Mr Kabwe’s private matters, and 2535/1 opened in November 1995 for dollar transactions for Mr Kabwe or AFSL of a commercial nature. These two were the only ledgers used until 1997. Thereafter, other ledgers were opened. The full list is as follows:

Ledger number

[62]Zamtrop payments were credited to ledgers 2535/1, 3388/1, 3556/1 and in one instance 3556/2. (Part of one payment was also credited to a separate ledger, 3346/1 in the name Crownstone, which seems to have been a distinct client of MCD, introduced through AFSL.) Other large payments were also credited to each of these ledgers (apart from 3556/2). We set out in an Appendix to this judgment a table showing the amount and date of all the Zamtrop payments, and all other US dollar payments of $75,000 or more, received into the relevant ledgers in the MCD client account, rounding amounts up so as to disregard bank charge deductions.

Payments in respect of Harptree Holdings Ltd and Jarban SA

[63]Harptree Holdings Ltd was a BVI company which Mr Meer caused to be set up on Mr Kabwe’s instructions at the beginning of 1997. It had bearer shares which at one stage Mr Meer said he believed were held by Mr Kabwe, though he also said that he understood the ultimate beneficial ownership to be held by ZSIS. Harptree was used to acquire the shares in a Luxembourg company, Jarban SA, which, through two subsidiaries, Belsquare Residence nv and Immo Leasing St Michel nv, owned two properties in Brussels. Mr Meer acted professionally both in setting up Harptree and on the acquisition of Jarban. The funds used came from Zamtrop. A good many of the payments from Zamtrop which were credited to ledger 3388/1 in late 1997 and 1998 were associated with this acquisition. Later on, as it turned out, Mr Kabwe sold the shares in Harptree, and the purchaser, Mr Cracco (who became the 19th Defendant), claimed to hold the shares free from any right asserted by Zambia. That was the subject of the separate trial conducted by the judge in 2005.[64]On 21 April 1999 Mr Kabwe wrote to Mr Meer as follows:
“The client has request for some money from Jarban which I asked Mr Standaert to arrange. The amount sought ($100,000) was about BF 4 million but Jarban at this point can only afford BF 2 million (approx $54,000). The recommended way of getting this money to the client (if not the only way) is for you to write to the bank in Luxemburg (I think you may be the only signatory) to ask them to remit BF 2 million (or USD equivalent) to your account here. After the funds are with you, we can then transfer to Zambia through Access. Sorry for the bother with this one.”
[65]On 4 May Mr Meer wrote to Belsquare authorising it to transfer BF 2 million to Jarban’s bank account, and to Jarban’s bank to instruct it to remit $50,000 out of Jarban’s bank account to MCD. This money was eventually received into the client account on 25 May and credited to the Harptree ledger, 3388/1.

Some other disbursements up to 2002

[66]We will mention a few other transactions to which particular attention was given in argument or at the trial. On 21 November 1997 Mr Kabwe sent a fax to Mr Meer asking him to do three things. First, he was to pay $64,450 “on my behalf” to Daewoo International Trading in South Africa; secondly, he was to transfer $80,000 from the Horizon account to the general account; thirdly, he was to confirm receipt of $130,000 sent from AFSL. Mr Meer replied immediately, confirming the receipt of the $130,000 and asking for instructions as to which account to credit. He asked for the name of the remitter of the money to go to Daewoo, and which account was to be debited, and he said that the Horizon account did not have $80,000 standing to its credit, and sent details. Mr Kabwe’s answer on 24 November was that he was the remitter of the money to Daewoo, though he did not say which account was to be debited. He gave instructions as to the apportionment of the $130,000 credit, and he said that he would review the entries on the general and Horizon ledgers to see if corrections could be made. The remittance to Daewoo was duly made, and debited to 2535/1, rather than to any personal account of Mr Kabwe.[67]On 7 May 1998 Mr Aaron Chungu sent an internal memorandum, within AFSL, to Mr Kabwe, saying “we need to be reimbursed the sum of US$242,484 for various client affairs handled through Meer Care & Desai. Please arrange for this to be paid. Details of this reimbursement are attached.” On the next day Mr Kabwe sent this (but without any attachments) on by fax to Mr Meer, with a handwritten message:
“Please remit the above amount of $242,484 to the account of [AFSL] at the United Bank as per the transfer details already with you”
. On 12 May Mr Meer and Mr Desai instructed their bank to make this remittance. It was debited to ledger 3556/1. Mr Meer accepted in evidence that, despite the reference, there were no relevant client affairs which were being or had been handled by the firm.[68]On 7 January 1999 Mr Thomas Koshy wrote to Mr Meer, following a telephone conversation, asking that £5,000 be paid, on behalf of AFSL, to Mrs P Koshy at a bank in Richmond, urgently “as the funds are required today”. On 5 January Mr Kabwe had written to Mr Meer to authorise this payment and to tell Mr Meer to “let him understand this is Access Financial Services trying to help him out”. The firm’s bank was duly instructed to make the payment on 7 January. On 8 January Mr Kabwe wrote to Mr Meer to say that AFSL had approved a further advance of £15,000 to Mr Koshy, and on 12 January he gave instructions to Mr Meer for the payment. At Mr Koshy’s request this was put into effect on 13 January by instructions for two transfers, one to Hi-Pro Ltd, at a bank in Richmond, of £9,200, and the other of £5,800 to M K V Shah t/a G Goode, at an account in Wimbledon. On 25 January Mr Kabwe instructed Mr Meer to pay Mr Koshy £5,000 “against the general A/c to complete our transaction with him”. Mr Koshy asked for the payment to be made to Hi-Pro Ltd. Mr Meer and Mr Desai duly instructed their bank to make this payment on 26 January, but for some reason it seems not to have gone from the account until 18 February. On 12 February 1999 Mr Kabwe wrote to Mr Meer, on AFSL’s paper, as follows:
“It has been decided to support Mr Koshy with a further advance of GBP10,000.00 which he desperately needs today. Kindly effect this payment on our behalf.”
[69]The instructions to the firm’s bank were given on 15 February, signed by Mr Desai alone, requiring payment of the relevant sum to a bank account in Cambridge, of which details had not been given in Mr Kabwe’s fax – presumably the firm already knew them. Of these various payments to or for the benefit of Mr Koshy, the first, to Mrs Koshy, was debited to ledger 2535/1, the original FK Commercial ledger, and all the others came from ledger 3673/1, namely AFSL’s general sterling ledger.[70]Soon afterwards, on 3 March, Mr Kabwe instructed the firm to make several payments, of which one was of $21,000 to C H Kaunda, at a bank in London, which he explained as being on behalf of AFSL “in connection with our acquisition of Mr Kaunda’s interest in Mambilima House”, which was the address of AFSL’s offices in Lusaka.[71]On 21 April 1999 Mr Kabwe sent a handwritten instruction by fax to Mr Meer telling him that “allocation of $250,000 received should be as follows”, specifying $70,000 for Crownstone, of which $20,000 was said to be “for bus sale” and the rest “for house sale”; $80,000 for AFSL, of which $50,000 “for advance recovery”, $20,000 “for Koshy recovery” and $10,000 “for Chibanda recovery”, with the balance of $100,000 for “general” - “allocation to follow”.[72]Later in 1999, on 21 June, Mr Kabwe instructed Mr Meer to pay $100,000 to Boutique Basile, to a bank account in Geneva, which was done on 29 June. On 15 February 2000 he instructed the making of a further payment of $80,000 to the same account, to carry the message “payment from Zambia”, which was implemented by instructions on 17 February. Both sums were debited to the Harptree ledger, 3388/1. These are among the payments, said by Mr Basile to be for suits and other clothes made for Dr Chiluba and Mr X F Chungu, which featured in the claim against Mr Basile, the subject of the separate appeal already mentioned.[73]On 3 August 1999, Mr Kabwe instructed Mr Meer to make a payment “on my behalf” to a bank in Boston Massachusetts, expressly “for student Alice T Kabwe … fall semester fees”, with the bank transfer advice to be notified to Mrs Kabwe and to Boston University. This was duly instructed to the bank on 4 August, and debited to ledger 3556/2, newly opened at this time, with a transfer from 3556/1.[74]In December 1999 and January 2000 a series of payments came into the client account from two Swiss banks and one bank based in Luxemburg (Corner Banque), all of which were credited to the Harptree ledger, 3388/1, as follows: Date In each case the details of the credit were that the payments was “from one of our customers” or words to similar effect, with no indication of identity, nor did Mr Meer make any enquiry as to the identity of the payer. They are not said to have been of Government money.[75]On 22 November 2000 Mr Kabwe instructed Mr Meer to pay $50,000 out of Harptree’s funds to Gstaad International School. The instruction to Mr Meer does not give the further detail which appears in the firm’s instruction to its bank, on the following day, that the advice note is to read “F Chiluba”. Mr Meer accepted that he knew F Chiluba to be the President of Zambia.

The BK payments

[76]The four payments relevant to the BK conspiracy came into the MCD client account between December 2000 and March 2001. They were $500,000 on 22 December 2000, credited to 3388/1, $200,000 on 26 January 2001, to 3556/1, $500,000 on 23 March 2001, to 3388/1, and $100,000 on the same date, to 3556/1. The firm’s records do not include any document relating to the first payment received. As regards the second, Mr Kabwe sent a fax, on the paper of AFSL, to Mr Meer dated 26 January 2001, in the course of which he referred to their holding $200,000 “from our clients interested in acquiring Nkamba Bay Lodge, which transaction we have negotiated on their behalf”, and asking for the money to be transferred to AFSL’s account in Zambia “in the usual manner”, which Mr Meer then caused to be done on 31 January. There is no other documentation relating to the four BK credits.

Payments and other events after 2001

[77]We can now move on to the last stages of the story of payments in and out. In 2001 Dr Chiluba’s second term of office as President was coming to an end, and the constitution of Zambia prevented him from standing for a third term. During that year there were already allegations that Dr Chiluba’s government was corrupt. An election was held on 27 December 2001, which was won by Dr Chiluba’s successor as leader of the Movement for Multi-Party Democracy, Mr Levy Mwanawasa SC, who became President on 2 January 2002. As the judge explained at paragraph 222, the new President was not willing to be told what to do by Dr Chiluba. In June and July 2002 the Zambian Post ran a series of articles headed The Matrix of Plunder, to which the judge referred at paragraphs 226 and 227, giving a lot of detail of how Government money had been diverted, including using MCD and Cave Malik. On 15 July 2002, the Government established a Task Force on Corruption, which was responsible for investigating the facts and bringing appropriate proceedings. Even before that date, the Zambian Government had asked for the help of the Serious Fraud Office in an investigation about the US company Systems. In May 2002 the SFO wrote to MCD about this investigation, seeking certain information, which Mr Meer provided. Soon after that, the Office of Supervision of Solicitors began to enquire into MCD’s conduct.[78]Mr Sullivan placed some emphasis on a number of payments out of MCD’s client account made during 2002. On 26 June 2002 some $12,500 was paid to Mrs Kabwe from the balance on the 3556/1 ledger. The first of the Matrix of Plunder articles had been published the previous day, naming MCD as part of the matrix. Mr Meer accepted in evidence that he knew of the article and read it on the Internet. It is not established that he had seen it before he gave instructions for this payment, those being dated 25 June. Mr Meer said that he ceased acting for AFSL at the end of June 2002 as a result of the allegations made in the articles.[79]However, on 1 November 2002 he arranged for $7,500 to be paid to Robert Simeza, Mr Kabwe’s lawyer, from the balance on the 2535/1 ledger, as instructed by Mr Kabwe. On 12 November $75,000 from the balance on the 3388/1 ledger was paid to Cave Malik, on Mr Kabwe’s instructions, “on behalf of your client Harptree … in connection of expenses incurred on behalf of this client”.[80]During 2003 the investigation by the OSS continued. An interview took place with Mr Meer and Mr Desai, of which a transcript is among the papers, to which we will need to refer.[81]At the beginning of 2004 a dispute arose in Zambia into which MCD were drawn indirectly. During 2003 the Bank of Zambia had taken steps in relation to AFSL and of its subsidiary Access Leasing Ltd, which included placing both companies into compulsory liquidation, and appointing a Mr Mwansompelo as liquidation manager. In January 2004 both he and English solicitors on his behalf (Messrs Class Law) wrote to MCD requesting the immediate delivery to Class Law of all papers files records documents and ledgers which the firm held or had in its possession or control belonging to ASFL or its subsidiary. It seems that AFSL was in dispute with the Bank of Zambia as to the action that it had taken, and Mr Meer was aware of that. Upon receiving this demand from Class Law, Mr Meer wrote to Mr Robert Simeza in Lusaka asking about the current position in the litigation in Zambia. Mr Simeza replied, asserting that Mr Mwansompelo had no authority to describe himself as liquidation manager of the two companies. Class Law on the other hand maintained that their client was fully entitled to demand and receive the documents. On 23 January Mr Meer wrote to them, enclosing the letter from Mr Simeza, and asking whether they could provide any authority from the Zambian court, or a court order. Class Law took up that suggestion, and applied without notice to the Queen’s Bench Division, obtaining an order from Mr Justice Pitchford requiring the firm to preserve all relevant documents, not to remove them or cause them to be removed from the jurisdiction, and to file an affidavit within 7 days “disclosing the whereabouts of the documents … within their custody power or control which are the property of or relate to the affairs of” AFSL and its subsidiary.[82]Mr Meer made an affidavit on 5 February 2004 in order to comply with this order. He did not, as arguably he might have done consistently with the order, limit himself to stating the location of the relevant papers. He said that the firm held no papers relating to Access Leasing Ltd, which had never been a client, but that it held three files relating to AFSL “together with our financial ledgers relating to this client”, and that the files and client account records were in the firm’s offices. Later in February, on the request of Class Law, MCD delivered to Class Law the three files, identified as IM-3556, IM-3801 and IM-4061, together with copies of the ledgers relating to the three files. He did not identify or disclose ledger 2535/1 or any related file.

The OSS investigation

[83]The Office for the Supervision of Solicitors undertook an inspection of the books of account and other documents of MCD on 10 July 2002. Officers of the OSS obtained papers from the firm, met Mr Meer in August 2002, and conducted a more formal interview with Mr Meer, Mrs Meer and Mr Desai on 2 April 2003, which was transcribed. A forensic investigation report was issued dated 17 October 2003. This was sent to each of the partners on 20 January 2004, with a request for comments not only on the report but on a number of specific points. The firm instructed a solicitor Mr David T Morgan to represent them. He replied on behalf of the firm by letter of 19 February 2004, and in a number of later letters.[84]An important part of the context of the OSS inspection, which also featured at the trial, was the so-called Blue Card warnings issued by the Law Society to solicitors, to alert them to situations in which they might be at risk of assisting in money-laundering. The first of these warnings was issued in 1994. Mr Meer said to the OSS and in evidence that he had read it. In cross-examination he agreed that as an experienced practitioner he was very familiar with the concept of money-laundering and what it involved. Whether that statement was correct is open to question, as we will discuss later. The original Blue Card included the following, under the heading “Could you spot a money-laundering transaction?”, as four out of five signs to watch for:
“(1) UNUSUAL SETTLEMENT REQUESTS - Settlement by cash of any large transaction involving the purchase of property or other investment should give rise to caution. Payment by way of third party cheque or money transfer where there is a variation between the account holder, the signatory and a prospective investor should give rise to the need for additional enquiries. (2) UNUSUAL INSTRUCTIONS - Care should always be taken when dealing with a client who has no discernible reason for using the firm’s service e.g., clients with distant addresses who could find the same service nearer their home-base; or clients whose requirements do not fit into the normal pattern of the firm’s business and could be more easily serviced elsewhere. (3) LARGE SUMS OF CASH - Always be cautious when requested to hold large sums of cash in your client account, either pending further instructions from the client or for no other purpose than for onward transmission to a third party. (4) THE SECRETIVE CLIENT - A personal client who is reluctant to provide details of his identity. Be particularly cautious about the client that you do not meet in person.”
[85]This warning was followed by others, some in relatively simple terms and others much more elaborate, over the years. The judge referred in his judgment to guidance circulated by the Law Society in 2000. This is a 74 page document, the second edition of the Law Society’s “Money-Laundering Legislation: Guidance for Solicitors”. In his witness statement, Mr Meer said that, if it was sent out to all solicitors, it is likely that he read it, but he was not sure that he would have thought it added anything substantial to the Blue Card warning which he had already seen. He therefore did not actually remember having read it. In cross-examination Mr Sullivan read parts of this document to him as part of his preparation for questions about money-laundering. His questions were not directed to whether Mr Meer had in fact read, and if so how he had understood, this guidance in 2000. The judge referred in his judgment to passages in Annex G (headed “Guidance for the money-laundering reporting officer – reporting responsibilities and suspicious transactions”) and Annex H (“Protection for your firm and the reputation of your partners and the profession”). It is entirely fair to say that Mr Meer should have read this and taken note of it. If he did not, however, the question would be why not, and turning a blind eye to it is not necessarily the only possible explanation.[86]Annex G includes the statement, under the heading “Typical areas of cause for concern”, as part of paragraph (iii):
“Solicitors should also be alert to any proposals which are an attempt to use the solicitor’s firm for nothing more than banking services.”
Annex H includes the following paragraph (iii) as one of several illustrations of cases where cause for concern is likely to arise:
“a well-established wealthy client proposes that your firm be involved in a new venture whereby sums will be held on account for the client. Upon probing and considering the details, the underlying cause for concern is that there do not seem to be any legal services being performed or required as would be expected in the normal course of a solicitor’s practice.”
[87]AFSL was not at the outset a “well-established wealthy client”, though by 2000 it was well-established as a client, and well-funded. Leaving that factual detail aside, the aptness of this warning to what Mr Meer was doing is plain and obvious. The cross-examination of Mr Meer on this subject included questions from the judge about whether he read this guidance, from which we quote the concluding passage at paragraph [133] below. Mr Meer was forced to accept that he had not complied with the guidance, and that he had either not received it, or not read it, or not acted on it.[88]In the light of the second and third points made in the original Blue Card warning, it is not surprising that the OSS was interested in MCD because of the pattern of receipts and payments without related legal work which we have described above.[89]All parties to these appeals attached importance to what was said by or on behalf of the firm in the course of the OSS inspection. The judge quoted some passages from the interview, particularly in that part of his judgment which dealt with the claim against Mr Desai. We should record that, on the one hand, the point was made on behalf of the partners that in the course of the interview many questions were asked for which a proper answer required reference to documents which were not then at hand, and, on the other hand, that Mr Sullivan drew attention to the fact that the partners were sent the transcript of the interview and had the opportunity, then or in response to the report, to propose any correction, explanation or amplification which they considered necessary.[90]The questioning at the interview was mainly about the receipt of funds from the Zamtrop account and its disposal, both as regards some of the detail and as regards the broader issues to which this gave rise. Clearly, some information had been obtained, for example from the previous informal meeting with Mr Meer. The officers, Mr Uddin and Mr Fletcher, asked questions about the pattern of the receipt and payment of the funds, starting with the assumption that much of the money started in Zambia, was paid out to the firm’s client account, and was then paid back to accounts in Zambia. Mr Meer corrected this, saying that money came from the account called Zamtrop at Zanaco in London, being identified as money from Zamtrop for the credit of AFSL. He also said that the firm’s instructions came from AFSL and were that the money was for ZSIS. He was asked why the funds were paid to the firm. He said he had no idea, but he explained the longstanding relationship with Mr Kabwe and, he said, with AFSL. Asked again why it was necessary that the money should go to the firm’s client account, he said:
“I had always assumed that because it was [ZSIS] they did not want the money to go to them directly. [AFSL] acted for [ZSIS] in Zambia and I think the intelligence services – this is what I was told – that the intelligence services did everything via their office in Lusaka. Now whether it was … for secrecy reasons or what, I really do not know. I am assuming that it was.”
[91]They were asked whether there was any underlying legal work involved in relation to the transmission of these funds, to which the answer was, not with ZSIS, though Mr Desai said “there would have been work for Access” and Mr Meer followed that by saying “We would have done a lot of work for Access.” After some further discussion they reached the position that, at least as regards a large volume of the payments, there was no related legal work.[92]The officers then asked why either AFSL or Mr Kabwe did not open a bank account and use that for making these payments. Mr Meer explained that there might be difficulties for a Zambian resident in getting the necessary permission from the Zambian Reserve Bank to open a foreign bank account and, whether or not he might have been able to get permission, “he probably thought it was not politic to do so and therefore came to” MCD.[93]A point on which Mr Onslow laid emphasis arose later in the interview, when the officers, asking about what was done with the money once received, in particular à propos of cash payments to Mr Kabwe, said in passing “these are government moneys”. Mr Meer interrupted and said:
“Hold on. When you say these are government moneys, I cannot agree with you because I don’t know if these are government moneys. These are Access moneys. Moneys came in to us for the credit of Access. It doesn’t come to us to say here is money that is government money and so therefore Access will tell you what to do with it. It doesn’t happen like that. Whatever money comes to us came for the credit of Access, so when you are trying to tell me that these are moneys that came from government, for government, I really don’t know. As far as I am concerned, my client was not government, my client was not the State Intelligence Service, my client was Access and I was acting for Access. Now moneys came in for the credit of Access and we disbursed those funds on the instructions of our client, so I think you are wrong when you say thee moneys that came in was from government for government.”
[94]Mr Fletcher suggested that by using the firm’s client account, AFSL was able to avoid Zambian exchange control regulations. Mr Desai denied that and said it was an operation set up because AFSL needed to service its clients abroad. Mr Meer added that AFSL was not sending funds out from Zambia, but receiving them from elsewhere. Moving on from that topic, the partners were asked whether this type of work was of a kind that a firm of solicitors ought to be doing. The partners explained it as being more like the old idea of a solicitor as being a client’s man of affairs, who will do legal work but may also, for example, pay a client’s hotel bill or order and pay for Christmas hampers from Harrods out of money held to the order of the client. The point was made that, in this case, unlike others where some legal work is done, there was no underlying transaction at the start: payments simply came in and went out, to which Mr Meer said that this was “just one little part of the work that Access gives us”.[95]The partners were then asked about the Blue Card warnings. We will quote one passage which summarises the position, particularly as regards the second point on the Blue Card. “Mr Fletcher: I am just dealing with that unusual instructions – this is the part that deals with clients who have got no discernible reason for using the firm’s services, distant addresses and things like that. If I was going to summarise what you have said to us this morning so far, the reason that they have used you effectively – the client being Access – is that they have got a longstanding relationship with you, you have known the person for a long time and that there were problems with the exchange controls in Zambia. Mr Meer: And a hedge against inflation Mr Fletcher: And a hedge against inflation and [some] belief that the secret service of Zambia are involved somewhere along the line Mr Meer: Certainly for the Zamtrop Mr Fletcher: And that is why they can’t be seen to be sending money back to themselves essentially. It has got to go through a third party. So you have had no suspicions about that at any other point at all? Mr Meer: No suspicions whatsoever and none even after I met the director of the Intelligence Services.”

Mr Meer: Certainly for the Zamtrop

[96]As already mentioned, the report was sent to the partners for comment. Some reference was made in the course of submissions to the terms of the response on behalf of the firm. It is unnecessary to deal with any detail of that. The firm repeated in writing its rebuttal of the suggestion that it was providing a banking service to AFSL, and its denial that there was anything improper in providing what they described as a secondary service to overseas clients, or that it was within the terms of the Blue Card warnings, or that it was a way of bypassing Zambian exchange control regulations.

The position taken in the Defence

[97]Mr Sullivan made submissions by reference to the line taken in the Defence served on behalf of Mr Meer. The original Defence, served on 27 September 2005, was on behalf of the firm as First Defendant. Later, pursuant to leave of the judge, separate Defences were served on behalf of each of Mr Meer and Mr Desai. For present purposes what matters is Mr Meer’s Defence (amended from the original joint Defence), served in June 2006.[98]The allegations by Zambia against MCD concerning the Zamtrop conspiracy, as pleaded in the Particulars of Claim, are set out in paragraphs 73 to 164, and supported by Annexes 12 to 23. They include a substantial section, at paragraphs 110 to 110z, introduced by amendment and dealing with Harptree Holdings and the Jarban acquisition. We do not need to go into the allegations in any detail, other than as to the case for showing that Mr Meer was guilty of dishonest assistance, and we will ignore in any event those allegations which the judge did not find proved. The starting point is that it was alleged that Mr Meer knew that the relevant money paid into the client account from the Zamtrop account was Government money. It was also alleged that Mr Meer had no authority from the Government to act on behalf of the Government, or to apply the Government money in the client account in payment to or for the benefit of private individuals. Reliance was placed on all or many of the characteristic signs in a version of the Blue Card warning being present in relation to the dealings with Government money.[99]Mr Meer was alleged to have known of the fact that the money was Government money, but was being misapplied, or alternatively to have “wilfully and recklessly failed to make such enquiries as an honest and reasonable firm of solicitors would make in circumstances in which they knew” that the money was Government money, and that it was being applied for private purposes without authorisation from the Government, and in particular that there was no apparent legitimate commercial or other purpose for the payment of Government money to or for the benefit of Mr Kabwe, and to or for AFSL. Similar allegations were made as regards the Harptree Holdings aspect and the purchase of Jarban, with the further allegation that the shares and property acquired as a result of that exercise were held on trust for Zambia. The point was made several times that all or most of the payments were made without there being any related matter in which MCD was retained to provide legal services, and that the several ledgers were used “in a manner equivalent to a current account”. In relation to payments out of the AFSL ledgers, it was said that various circumstances which were known to Mr Meer made the transactions very suspicious, but that Mr Meer failed to make any enquiries such as an honest and reasonable solicitor would have made in such circumstances.[100]In Mr Meer’s Defence, he pleaded the Churchill Hotel meeting and the agreement reached at it. He then admitted that sums were received in the firm’s client account for the credit of AFSL, and said that AFSL was the sole relevant client, acting through Mr Kabwe, that all payments out were made on the instructions of Mr Kabwe, and that the firm never acted on behalf of ZSIS. Mr Meer asserted that he and the firm acted entirely honestly in the conduct of transactions on behalf of AFSL. He made a number of points in support of this. The Zamtrop account was held at Zanaco, a Government owned bank. The receipt of payments from this source was consistent with what Mr Meer had been told at the Churchill Hotel. He had no knowledge of the source of the funds in the Zamtrop account, and had no knowledge or suspicion that they were paid into that account, or out of it to the firm’s client account, in breach of trust or fiduciary duty. He had no reason to doubt the honesty of Mr X F Chungu or of Mr Kabwe, or to doubt what he was told at the Churchill Hotel. He assumed that in the context of the operations carried out by or for an organisation such as ZSIS confidentiality was necessary, and it was therefore not surprising that a full explanation of all underlying transactions between ZSIS and AFSL was not provided. He referred to his absence of financial reward, other than three payments of reasonable fees for work done.[101]Coming to deal in detail with the allegations in the Particulars of Claim, Mr Meer said that he had been told by Mr X F Chungu and Mr Kabwe at the Churchill Hotel that ZSIS would make payments to AFSL from time to time in respect of services performed by AFSL, and that accordingly Mr Meer believed that payments from the Zamtrop account were funds remitted by an organ of the Zambian Government, but said (in paragraph 41.2) that it did not necessarily follow that such funds remained Government funds in the hands of AFSL. He denied that any reasonable solicitor would have been suspicious of the transactions, and also denied in any event that he was suspicious of the relevant transactions. He contended that, whether or not the ultimate recipients of payments were entitled to receive them, he believed that they were so entitled, and that all such payments were for legitimate purposes. More generally, he believed that AFSL had received money from ZSIS for legitimate purposes and that it was for AFSL to decide, and to instruct Mr Meer, in relation to the manner in which such money should be disbursed. He denied that the ledgers were used in the manner of a current account.[102]Zambia supplemented its Particulars of Claim with Further Information, pursuant to a request by MCD, in November 2005. It served a lengthy Reply to Mr Meer’s Defence on 21 July 2006, taking issue with Mr Meer on a large number of the individual transactions. We do not need to refer to this, except for paragraph 19, which responds to paragraph 41.2 of the Defence. The case there pleaded by Zambia was that, if Mr Meer’s belief were correct, that AFSL was acting on behalf of the Government in providing services to ZSIS, and that money was being paid to the firm’s client account for that purpose, then the money received from Zamtrop into the client account would be held on trust for the Government. The same point had been made in response 36/37(b) in the Further Information, with the further point that, on this basis, money held on trust for the Government was mixed in the client ledgers with money not so held.

Mr Meer’s evidence

[103]Mr Meer made a witness statement on 8 September 2006, and gave evidence at the trial over all or parts of six days. In the first 18 paragraphs of his witness statement, which were not challenged, he described something of his career and background. Then he dealt with his knowledge of and contacts with Mr Kabwe over the years, the firm’s work for him in the early 1990’s and then the Churchill Hotel meeting. So far as the rest of the witness statement is concerned, it was the subject of lengthy cross-examination, and it would not be useful to consider it separately from the cross-examination. In the course of argument on the appeal we were taken to quite a number of passages in the cross-examination, and have read others besides. The judge observed at paragraphs 554 and 632 of the judgment that the closing submissions on behalf of Mr Meer accepted that he was an unsatisfactory witness. In those submissions, reference was made to his failure to ask any questions of Mr Kabwe as to the source of monies received or the purposes for which such monies were to be put, and to his having had little or no proper understanding of the precise status of the money in his client account, or the identity of the parties to whom that money belonged, to his having followed his client’s instructions without independent judgment or thought, to his natural but often unhelpful attempts at reconstruction, and to him being sometimes suggestible and eager to please. Those are entirely fair comments. On several occasions he answered a question in a way which appeared to accept that he had been dishonest. As he mentioned at paragraph 553 of the judgment, the judge caused these questions to be put again so as to be sure whether or not the answer had been based on a misunderstanding of the question.[104]Mr Sullivan cross-examined Mr Meer at length, starting with his awareness of money-laundering and the Blue Card points, then proceeding to Mr Kabwe and the Churchill Hotel meeting, and then getting into the detail of the payments into and out of the client account and the various ledgers.[105]As regards the third of the Blue Card points, with its reference to holding large sums of cash in a solicitor’s client account, Mr Meer said he understood the reference to “cash” to be to physical notes, not just credit balances. Mr Sullivan followed this up with one further question as to why it made a difference whether money was in cash form or not, but he did not challenge Mr Meer’s evidence that he thought it meant physical cash.[106]He was asked various questions about the Churchill Hotel discussions. He had said in his witness statement that he had “agreed to help AFSL (and in turn Zambia) in dealing with the remittances of these monies for its credit”. He reiterated in cross-examination that he would be helping Zambia because he would be assisting AFSL in the service it was providing to ZSIS. He had also said in his witness statement (paragraph 87) that he would have been horrified to learn that he was in any way involved in a scheme that would inflict harm on Zambia. He was not cross-examined on this evidence. In his cross-examination arising from paragraph 34 he referred to his motivation to assist Zambia, as (he understood) was being asked of him by Mr X F Chungu. He said:
“Zambia had been very good to me, and Zambia gave me my start in life, and I was prepared to help Zambia as much as I could.”
[107]After some further questions,

the judge put this to Mr Meer:

“Judge: As I understand it, at the meeting you were told that AFSL would be acting for ZSIS, and you were not told what they would be doing for ZSIS, and there appears to be no definition of what services you are to provide. You are simply going to do what they ask you to do, and you do that without enquiry because you trust the people who are sitting across the table from you. That is the position isn’t it? Mr Meer: That is the position.”
[108]He accepted that the instructions were unusual and that it was unusual not to record them in writing. The judge was clearly puzzled by Mr Meer’s evidence about the service he was providing, and the reason why his firm’s client account was used for the purpose of receiving and disbursing moneys. Mr Sullivan put it to Mr Meer that the client account was being used in order to conceal the source of the funds, to which Mr Meer said:
“The money always came from Meer Care & Desai and we remitted those funds from the credit of AFSL. I am not following your question. If you are saying that there was money being rerouted back to Zambia in order to break the chain, I don’t think that can be correct. I was receiving monies from the Zamtrop account in London. I did not know the source of their funds. My client was Access and I was sending money on to them. They were based in Zambia and it was only natural and not unusual for me to send money to them.”
[109]The judge then took up the question of his understanding of the ownership of the funds. Mr Meer said:
“Mr Meer: The money belonged to Access. The monies that I had received was money for their credit in respect of services that they had performed, I believe, or I assumed, for ZSIS. Judge: So it was money for past services that they had received? Mr Meer: It is difficult for me to say whether they were for past services or not, but it was for the work that they had done for ZSIS.”
[110]Mr Meer got into further difficulty later on in trying to explain why ZSIS should be paying these large sums to AFSL. In response to another question from Mr Sullivan, he said that he did not know whether the money paid to AFSL was a financial reward to them or money which they had to utilise for their client. Pressed further on this, he said he believed the money was not only for services rendered but for the work that they were carrying out on behalf of ZSIS, and that they could have used the money on behalf of ZSIS in matters that required discretion.[111]Mr Sullivan then reverted to the question of the services:
“Mr Sullivan: Well, it comes back to his Lordship’s question, which I think you haven’t answered. What service was it that you were providing to Access? Mr Meer: My Lord, the majority of my practice is an African-orientated practice. I do a lot of things on behalf of a lot of clients from that part of the world, which strictly does not fall within the work of a solicitor, and I think, in my witness statement, I have given you various examples, my Lord, of the type of things I have been called upon to do so on the behalf of clients. These are all established clients of mine. They are not clients that I acted for for the very, very first time. There are many occasions when I am asked to do things on behalf of clients – clients of long standing – I have acceded to those requests. Judge: Well, I don’t think that is an answer to Mr Sullivan’s question either. All I can see at the moment is that the service, so-called, involves your client account being made available for monies to be put in, the source of which you don’t question, and then to be paid out to people, the purpose for which you don’t question either? Mr Meer: Yes, that money came from a reputable source, my Lord, and I did not question where the money came from. I received it on behalf of my client and I disbursed it in accordance with the instructions that I got. Judge: So the service then is simply to receive money without asking where it comes from, and disburse it, as told, without enquiring what is the purpose of the disbursement, isn’t it? Mr Meer: My Lord, I did know where the money was coming from. It was coming from the Zamtrop account in most of the cases. It was coming from Zanaco in London, and it was coming for the credit of my client. Judge: Well, I have a bit of a problem with who is your actual client at the moment, given your answer at 136 where you say it was money for the Zambian State Intelligence Services. It can’t be both AFSL and ZSIS money, can it? Mr Meer: No, my client always was AFSL. I received no instructions for ZSIS. I had no contact with ZSIS except Mr Chungu at that meeting in London. Judge: But that makes your answer to Mr Uddin not correct, doesn’t it, at page 136, line 14? That answer gives the impression that AFSL was simply being used as a conduit to hide the fact that it was really ZSIS money? Mr Meer: No, Sir. ZSIS was never my client, Sir. If that is the impression that has been created, then that is wrong. Judge: You see, it is being put to you there – and you answer affirmatively – that the purpose of the exercise is simply to disguise that the ZSIS money is ZSIS money, isn’t it? It is to hide the fact that ZSIS is involved. That is what you are saying to him, isn’t it? Mr Meer: I was assuming, my Lord. My Client always was – and I will stand by this – were AFSL. My instructions always came from AFSL. The money that I received was for their credit and belonged to them, my Lord.”
[112]Next, Mr Meer got into difficulty when cross-examined about things he said during the OSS interview, in particular about the money having come in “for” ZSIS, to which he replied that this was a mistake and he should have said that it came “from” ZSIS. He asserted more than once, in this sequence of questioning, that he treated the money as belonging to AFSL in his account, and not as belonging to the Government or to ZSIS, and that it was up to AFSL to decide how they should be disbursed. A passage in one of the letters from Mr David Morgan to the OSS was put to him, in which reference was made to “the funds to be utilized by ZSIS”. He accepted that this was inconsistent with his evidence, and he said the letter was incorrect.[113]He was pressed on his understanding and belief about the money. For example, in relation to money which went from his client account to AFSL in Lusaka, he was asked why it could not have been sent straight from the Zamtrop account to AFSL, to which he said he assumed there was a need for discretion, but from whom he did not know.

The judge then put a proposition to him:

“Judge: Is that the truth of the matter, then, that you simply did not ask? You did not check? You simply allowed your client account to be used as they thought was appropriate, without making any enquiries? Mr Meer: I did not make any enquiries. Judge: So they came to you at the meeting and they said, “We want to run money through your client account. It is all very secret. “And you said, “Fine!”
Mr Meer: No, they did not say that, my Lord. Judge: They gave you the impression it was secret. They didn’t then say it was secret. You formed the view that because it was secret, you simply accepted it was secret, legitimate. You didn’t know where the money came from. As regards an ultimate source, you didn’t know where it went, and you didn’t make any enquiries at all, or check anything? That’s right, isn’t it? Mr Meer That is correct, my Lord. The money I knew came from the Zamtrop account. Judge: Yes, but you did not know how it got into the Zamtrop account? Mr Meer: No, I did not, my Lord. Judge: And you did not know where it was going? You simply didn’t ask. Mr Meer I did not ask.”[114]Later he denied that he was concerned to satisfy himself that he was not getting involved in money-laundering, saying that he was providing a service to a long-standing client (meaning Mr Kabwe) with the best of intentions, and that if it had been money-laundering, he would not have been asked to send money to Zambia which had a soft currency.[115]The judge again sought to encapsulate Mr Meer’s evidence in this exchange (of which we omit immaterial parts):
“Mr Meer: I did not look at it that way, my Lord. Judge: Isn’t the reality, Mr Meer, you did not look at it any way? You just had Mr Kabwe who you knew and Mr Chungu who you knew was the ZSIS man and that was enough for you? You did nothing else. What they said went. Isn’t that the position? … As I understand your answers, you really have no idea about the transactions, have you? You have no real idea who the money belongs to. They simply used your account as they wanted? Mr Meer: With the valuable benefit of hindsight, I see, yes, that I was being used. Judge: I understand why you might say that, and am very careful not to apply hindsight or rules which have been firmed up, and that is a question which I have to decide. But the reality is, Mr Meer, that you simply took their word for it, that what they were doing was legitimate and you had no idea what they were doing? Isn’t that right? Mr Meer: That is correct, my Lord.”
[116]Then Mr Sullivan turned to asking Mr Meer about the receipts and payments, and first about the very first receipt, $250,000 paid in on 30 November 1995, with which Mr Meer had dealt in his witness statement. It was put to him, based on paragraphs 41 and 42 of his witness statement, that he understood this $250,000 to be the first payment made pursuant to the arrangement discussed at the Churchill Hotel, and that this was why he opened a new ledger for it. He did not accept that, though it can fairly be said that his denials, on the two occasions when the point was put to him, were not particularly strong on this point:
“Mr Sullivan: You understood that the $250,000 that you received, as we have looked at, was the first payment which had been made pursuant to the arrangement which you had made at the Churchill Hotel with Mr Xavier Chungu and Faustin Kabwe? Mr Meer: Not at that time, my Lord. I cannot recall if that is what I perceived.” … “Mr Sullivan: You had agreed only a short while earlier with Mr Xavier Chungu and Mr Faustin Kabwe to receive monies from Zanaco. So did it not occur to you that these were monies – given that you received no other monies from Zanaco, that these were monies received pursuant to that agreement? Mr Meer: Not really. I was told by Mr Kabwe to expect these funds. They could have come from anywhere. But he identified the bank in his letter to me. Whether it was in pursuance of his arrangement with Mr Chungu, I really don’t know.”
[117]He had said in paragraph 42 of his witness statement that he used the title of the ledger (FM Kabwe Commercial) “to differentiate between this work and the private matters on which I had acted for Mr Kabwe previously”. Based on this, it was put to him that “this work” meant the work that he was to undertake as a result of the Churchill Hotel meeting. He would not accept that. He said it referred generally to work for AFSL, as distinct from private work for Mr Kabwe, and that this would include, but not be limited to, work done under the arrangement made at the Churchill Hotel. The account would receive whatever money was coming in for the credit of AFSL. His evidence seems to involve an acceptance that the reason he knew the money to be that which Mr Kabwe had led him to expect in his 24 November letter was because it came from Zanaco, but, as noted above, he did not accept that he understood it to be part of what was paid under the Churchill Hotel arrangement. The judge asked him whether he checked on that with Mr Kabwe, to which he said he did not; asked why not, he said he did not think it was necessary to ask him. He was then asked a series of questions about the payments out of the client account made following this receipt, including cash to Mr Kabwe, which he said represented his travelling expenses.[118]Mr Meer was consistent throughout his cross-examination that he did not ask Mr Kabwe any question about the nature, purpose or justification for any payment.[119]He was asked about the second receipt, from Paine Webber, and in particular why it was credited to ledger 2535/1, if it was not Government money. His answer was that this was the ledger to which he credited all AFSL money up to that point. In the course of questions about the payments out after that receipt,

the judge again reverted to his summary of Mr Meer’s position:

“Judge: It’s like all your other assumptions. If they tell you to do it, you don’t ask why. To talk colloquially, you just ask “How high?” don’t you? That is what I understand your evidence to be. You did not question any one of these transactions at all? Mr Meer: My Lord, I had implicit trust in Mr Kabwe. I had known him for such a long time. I didn’t think it was necessary for me to ask. I trusted him.”
[120]The same topic arose during the next day, in the course of further questions about disbursements:
“Judge: But these were monies which you had received further to the Churchill Hotel Agreement. You must have questioned, given that you knew the source of monies to be the Government monies, ZSIS monies, “What on earth am I doing remitting $50,000 to a Midland Bank account in Covent Garden, London, England?”
Did you ask yourself that question? Mr Meer: No, I did not. Judge: Did you ask what possible Government purpose might be served by this remittance? Mr Meer: I did not, my Lord. Mr Sullivan: Let us look at the fourth----? Judge: Sorry, why did you not ask that question? Mr Meer: I did not think it was necessary my Lord. I thought I was being asked to remit funds to one of AFSL’s clients. It must have been a commercial transaction, my Lord. Judge: We explored this yesterday. Yesterday, you said the purpose of the arrangement was so that ZSIS could do things secretly and keep it in confidence. I understand that to mean that you believed that what you were being asked to do was to facilitate ZSIS operations. Is that right? Mr Meer: That is correct. Judge: These are manifestly not ZSIS operations, are they? Mr Meer: I have no idea. I, I agree with you. It does not look like it, my Lord. Judge: At some point in time, it must have surely occurred to you – from example, when you were asked to pay university fees and the like – what on earth has this got to do with ZSIS operations? It must have occurred to you? Mr Meer: Honestly, it did not occur to me at the time. Judge: Why not? Mr Meer: I just cannot answer it, my Lord. I, I, you know, I did not sit at any particular time to review my ledgers – maybe I should have, my Lord. Judge: It is not part of your scheme, is it? Your scheme is that you are helping security operations? Mr Meer: That is correct, my Lord. Judge: Some of your answers appear to be that – for example, the last answer to Mr Sullivan was that you did not question it because you assumed that AFSL had a commercial arrangement with these people. It cannot be both, can it? It cannot be a ZSIS operation and an AFSL operation? The two are completely polarised? Mr Meer: That’s correct. I was not privy to what operations were occurring. I had no contact with ZSIS. Judge: Did it not occur to you that perhaps Mr Kabwe, for example, might have been misapplying ZSIS money? Mr Meer: My Lord, at that time it did not. I trusted the man implicitly. I was wrong. You know there is a pattern that has been emerging. I should have been more aware of it, but I was not.”

Mr Sullivan: Let us look at the fourth----?

[121]There was also a pattern emerging in Mr Meer’s cross-examination, namely that, asked about the purpose or justification of a particular disbursement, he did not know what it was, he acted on Mr Kabwe’s instructions as to the payment without asking any questions, and that he did not ask because he did not think it necessary. We need not go to further examples of this general pattern, but there are some passages in which a different point emerges. One of them, again arising from a question put by the judge, is this:
“Judge: Well, the monies were actually allocated to Mr Kabwe’s ledger at this stage, were they not? Mr Meer: They are, my Lord Judge: Although you say you are getting instructions from Mr Kabwe, you know the money is ZSIS money, do you not? Mr Meer: That is correct. Judge: And you know it is part of your arrangement that you struck at the Churchill Hotel that the object of this exercise is secrecy. The sole purpose of your involvement, as I understand your evidence, is so that ZSIS can carry out operations confidentially, so that anybody else would not be aware that what is actually happening is a ZSIS operation. That is right? Mr Meer: That is correct. Judge: Therefore, I can see you getting money to pay informers or spies, or even buy cars or hotels or properties to be used by ZSIS, but do you really think that the mere fact that they told you in ’95 it was for a ZSIS purpose, that that entitled you not to make any question at all about any of these transactions? Mr Meer: Maybe, I erred, my Lord, but I did not question Mr Kabwe. Judge: I know you did not, but I am trying to understand what your thought processes are, which justify you, in your mind, simply following everything that Mr Kabwe told you to do with the money unquestionably? How did you feel able to do that? Mr Meer: I was not suspicious at that point, my Lord, I did not think it was unusual. Judge: It is not unusual in your circles for the head of ZSIS and Mr Kabwe to meet you at a hotel in London and to say that “We want to use you to run money through your account so that nobody can see it is ZSIS money,” and then find it being spent for a whole load of operations which, on the face of it, appear to not have any ZSIS relation at all? You think that is usual? Mr Meer: No, it is not usual. Judge: No, it is not, is it? So what were your thought processes that enabled you simply to ignore the nature of the transactions and just implement them? Mr Meer: I think I trusted the man too much. I was stitched up, my Lord.”

Mr Meer: They are, my Lord

[122]On some occasions, for example as regards payments to Mrs Kabwe, or for school fees, Mr Meer accepted that it did not appear that the payment could serve any purpose of ZSIS. However, in each case he said that it was not for him to enquire, because his task was to take and act on Mr Kabwe’s instructions. Mr Sullivan put to him his case, namely that the reason he did not ask was not that he trusted Mr Kabwe but that he knew all along what was happening, and he was knowingly and actively money-laundering. Further, as he put it, any reasonable honest solicitor would know that these Government moneys were plainly being applied for a purpose other than that for which they were received. The reason why it was all happening is that Mr Chungu, Mr Kabwe and Mr Meer had all agreed at the Churchill Hotel how to deal with these Government moneys, and that he knew he was facilitating the theft of Government money. Mr Meer said none of this was true.[123]In the course of cross-examination about the disbursements, Mr Sullivan came to the payment of $64,500 to Daewoo, mentioned at paragraph [66] above. Mr Sullivan put it to him that it was plainly for the personal benefit of Mr Kabwe, which he accepted, and asked why, in that case, he debited it to the AFSL ledger, rather than to Mr Kabwe’s personal ledger. Mr Meer’s answer was that the AFSL ledger was, or may have been, the only one that had the funds to cover the payment. When pressed as to the justification for using an AFSL ledger set up to distinguish between private transactions of Mr Kabwe and business of AFSL, and funded by payments from Zamtrop, he was forced to the answer that there was no justification. Furthermore, the judge pointed out that, at the same time, when asked to make a transfer from another ledger which did not have sufficient funds, he told Mr Kabwe of this and asked for further instructions, so that if insufficiency of funds was the reason for not using the private ledger, he could and should have told Mr Kabwe that there were not enough funds available and asked for further instructions. This led Mr Sullivan to put again to him that he was knowingly assisting Mr Kabwe in misappropriating money for his private benefit to which he had no entitlement, and thereby helping to steal Government money. He denied it.[124]Shortly after that sequence of questions, there came another occasion when Mr Meer had answered a question in a way which was not expected, so that the judge caused it to be put to him again, eliciting the expected answer namely that he had not been dishonest. The judge followed this up:
“Judge: What is the answer to his question that an honest solicitor, faced with these, would have made more enquiries? Do you accept that or do you not accept that? Mr Meer: Maybe I was negligent, my Lord. Judge: You are accepting that an honest solicitor would have asked these questions? Mr Meer: I would have enquired more, my Lord. My implicit trust in Mr Kabwe in 1998 was there; it was only later on that I began to have doubts. Judge: So what you want me to believe is that you are a fool, not a knave. Is that right? Mr Meer: I have heard this before. I, I should have been more careful, and I was not.”
[125]He was asked about the transfer of $242,000 to AFSL pursuant to the instruction mentioned above at paragraph [67]. Mr Sullivan asked him about the reference to “various client affairs handled by” MCD. He said there were no such client affairs, but he did not query the reference, he simply accepted and acted on Mr Kabwe’s instruction to pay the money to AFSL, being money which he considered he held to the credit of AFSL.

The judge then took up the questioning:

“Judge: This money came from the Zamtrop Account, didn’t it? Mr Meer: That’s correct. Judge: On your evidence before me, those monies can only be used in two ways. One is for ZSIS purposes and the other one is AFSL spending money which it has earned for work it has done for ZSIS. Those are the only two possible uses for the money? Mr Meer: That’s correct. Judge: This internal memo appears to refer to AFSL clients. So it is self-evident then that this cannot be a ZSIS purpose, can it? Mr Meer: No, it can’t, my Lord Judge: Therefore, for AFSL to be able to spend $242,000 legitimately, as you understood the arrangements, it must have done work for ZSIS for which it was entitled to a remuneration of $242,000? Mr Meer: Not really, my Lord. I, I, I, I did not know what element of that amount represented their fees and what element represented whatever disbursements they may have had to make. I have always assumed, my Lord – sorry, my Lord, I had always assumed, my Lord, that when monies were requested, they were for ZSIS work. Judge: You are now suggesting to me – I think, this is the first time you suggested it – that this might be reimbursement of disbursements it had incurred in carrying out ZSIS operations. Is that right? Mr Meer: Yes, but I wasn’t told that, my Lord. Judge: No? Mr Meer: I can only assume that, my Lord. Judge: This is another example – I don’t think we have reached any other situation now – another example where Zamtrop monies come in and do not appear to be applied for a Zamtrop purpose, do they, on their face? Mr Meer: That is correct. Judge: I don’t know what the running total now is on the account, but I suppose it must be close to $3m, and so far we have not identified clearly, so far as I can see, a single potential ZSIS payment, have we? Mr Meer: No, my Lord, because I was not privy to what payments they were making on behalf of ZSIS. Judge: But when you get funds, and those funds are in one account, but they earmarked for two separate purposes – i.e. the ZSIS funds and the AFSL funds, you have got to be clear in your own mind that you are not contaminating or mixing the funds, haven’t you? Mr Meer: I treated the funds as – all the funds being as credit to AFSL. Judge: That can’t be right, can it? On that basis, it has had $3m plus worth business in a little over 18 months. It would be the most prosperous company in Zambia by a wide margin, wouldn’t it? Mr Meer: I did not take that to mean that funds all belonged to AFSL. They were credited to that account. I was not privy to how they dispersed those funds. Judge: No, but that is my point, and it’s the Claimant’s point. If your story is correct, what you have singularly failed to do is identify which funds are ZSIS monies and which monies are AFSL-earned monies. Mr Meer: That is correct, I did not identify it. Judge: Once you do that, unless you check every transaction, you cannot be sure that the monies are being properly applied according to the terms in which you receive them, can you? Mr Meer: That is true, my Lord. Judge: So far, we have not identified any clear ZSIS transaction, have we? Mr Meer: No, we have not, my Lord. Judge: Therefore, unless you are satisfied that the entirety of these funds belong to AFSL, you are knowing that the monies are being misapplied? Mr Meer: No, my Lord, I did not, I did not take it. I mean, I did not know that they had been misapplied. Judge: Of course you are. Because you are aware of two things. All this money has come from Zamtrop; none of it has been applied for a Zamtrop purpose and in your mind, you cannot possibly believe that AFSL has earned millions of dollars of fees doing work for Zamtrop/ZSIS. You cannot possibly believe that? Mr Meer: I did not believe they were earning millions from Zamtrop. Judge: You know then that this money is always supposed to go to ZSIS purposes, and none of it has gone for ZSIS purposes, and therefore it has been wrongly applied? Mr Meer: I did not at that time. Judge: Why not? It must have hit you in the face? Mr Meer: Because I treated these funds as being credits for AFSL, my Lord. I trusted Mr Kabwe, as I said earlier, my Lord. I did not think, I mean, I can see now with hindsight what you have just pointed out me, my Lord, but I did not at that particular point in time. Judge: How long have you been in the commercial law world? Thirty-five, forty years? Mr Meer: I have been a Lawyer since 1968, my Lord. Judge: And you have operated internationally for a long time? Mr Meer: I did a lot of trial work in Zambia when I was there for the first ten years, my Lord, and then I become general counsel to ITM, which was purely commercial work. Judge: You want me to accept that you made no enquiries at all about any of these numerous transactions simply because you trusted Mr Kabwe? Mr Meer: I did, my Lord. Judge: That is the only answer you can give to all of these? Mr Meer: I did trust him, my Lord. Judge: Because of that trust, you never queried anything he ever told you to do? Mr Meer: No, I did not, my Lord, and I thought I was rendering a service, not only to my client, but to the country also, my Lord.”

Mr Meer: No, it can’t, my Lord

[126]In the course of the fourth day of cross-examination, he was asked about payments to Mr Thomas Koshy, mentioned above at paragraph [68] and following, and first about the two transfers amounting to £15,000 in January 1999. Mr Sullivan showed him the instruction from Mr Kabwe, to the effect that AFSL had approved a further advance to Mr Koshy, and put to him that this was plainly AFSL making a loan to Mr Koshy, and nothing to do with the Zambian Government or ZSIS. He asked Mr Meer why he was using Zambian Government money to fund the commercial activities of AFSL in England, to which Mr Meer replied:
“Mr Meer: My Lord, I did not at that time think of this as being Zambian Government funds, this particular amount. Mr Sullivan: This was – we have seen from GT trace 32 that it was indeed Zambian Government money. We have seen just how much money was washing through your account, most principally from Zamtrop. So it is simply not true to suggest to his Lordship that the activities on this ledger, you did not attribute to your actions on behalf of Mr Faustin Kabwe acting for ZSIS? Mr Meer: I did not attribute as the way it is suggested, my Lord.”
[127]Another remittance which provoked cross-examination was that to Mr C H Kaunda in respect of the purchase of his interest in Mambilima House, Lusaka (see paragraph [70] above). Mr Sullivan asked:
“Mr Sullivan: What did you think you were doing paying money to acquire Mr Kaunda’s interest in Access Financial Ser – in Mambilima House for and on behalf of Access Financial Services? Mr Meer: I was paying on behalf of AFSL, my Lord, and they must have acquired Mambilima House. I mean, you know, that was my assumption. The funds that I held were held for AFSL, my Lord, and I was making a payment on their behalf. Mr Sullivan: Well, we seem to have gone full circle because last week, you accepted to his Lordship that you held the monies for ZSIS purposes, but you accept that this was – you knew that this was not an application for funds for ZSIS purposes. Correct? Mr Meer: Not in terms of this memo of the 3rd March 1999. Mr Sullivan: Given that you had received the monies pursuant to the Churchill Hotel agreement, what did you think you were doing using Zambian Government funds for this purpose? Mr Meer: My Lord, I never reviewed my ledgers to find out whether the funds that were lying to the credit of this particular client were funds solely from the Zambian Government. Mr Sullivan: But this ledger wasn’t receiving very much money from elsewhere, was it? We have gone through all the debits and credits so far. If any non-Zamtrop money comes in, it goes out, as we have seen. So this was Zamtrop Government money, you knew it to be. I want to know why it was that you were applying it for non-government purposes? Mr Meer: My Lord, my Lord, I failed to carry out reviews of my ledger.”
[128]Mr Sullivan took up a number of payments to or for the benefit of Mr Kabwe’s family. One was a payment of $15,000 to Mrs Kabwe on 5 February 1999, which produced this exchange:
“Mr Sullivan: Again, this is simply to discharge – paying personal expenses of Mr Faustin Kabwe using Zambian Government money? Mr Meer: I was asked to remit funds to his wife, my Lord. Mr Sullivan: Knowing you were using Zambian Government money? Mr Meer: I was using money that was lying to the credit to AFSL, my Lord. Mr Sullivan: Knowing it had been received from the Zamtrop account? Mr Meer: Money had been received from the Zamtrop account. Mr Sullivan: And it was that money you were using for this purpose? Mr Meer: I did not, at that time, think in those terms, that it was that particular money”
Another payment to Mrs Kabwe, also of $15,000, in January 2000, produced this exchange:
“Judge: How could you know it was anything other than a personal purpose, if it is going into Irene Kabwe’s pocket? Mr Meer: I was instructed by Mr Kabwe to remit those funds which I did, my Lord. Judge: It can’t be anything other than personal, can it? Mr Meer: Sorry, my Lord? Judge: It can’t be anything other than personal. You don’t think Mrs Kabwe was involved in ZSIS operations, do you? Mr Meer: No, I do not, my Lord, I did not think so. Judge: So if you know it is Zamtrop money, you know that it is not being used for Zamtrop purposes? Mr Meer: I was not aware at that time that it was not being used for Zamtrop purposes. I acted on those instructions; she was his wife. He could have asked her to do something, I don’t know, my Lord. Judge: So you think she might have been working for ZSIS? Is it feasible you could actually believe that? Mr Meer: No, I don’t, my Lord Judge: No? Mr Meer: I don’t even know if she was a housewife or if she was working.”

Mr Meer: No, I don’t, my Lord

[129]Another payment was for Mr Kabwe’ daughter Alice’s fees at Boston University (see paragraph [73] above):
“Mr Sullivan: He could have paid, he has got to pay Boston University for his daughter’s fees. So he can use his own money and remit from his own funds in Zambia to the United States, but you know that he is not doing that, you know that he is----? Mr Meer: Yes, he is remitting funds from the AFSL account, my Lord. Mr Sullivan: Funds which you received for reasons of discretion, confidentiality, for ZSIS purposes. How was Zambia being assisted by providing private education for Faustin’s Kabwe daughter Alice? Mr Meer: I can’t answer that, my Lord. Mr Sullivan: Because there is no answer. That’s right, isn’t it? There is no honest answer? Mr Meer: That is not true, my Lord. I acted on AFSL’s instructions, and I remitted the funds because they asked me to. Mr Sullivan: You’re a very experienced solicitor. You know that it is not good enough simply to act on a client’s instructions. You’re conscious of the Money Laundering Regulations which are in place. You know that you mustn’t get caught up in money laundering and you well know, as a very experienced solicitor, that it is – and called to the Bar of England and Wales – it is just not good enough to accept a client’s instructions without questioning. You know that? Mr Meer: I have known Mr Kabwe for over 30 years, and I trusted him implicitly. Mr Sullivan: But you could not have possibly have trusted him in circumstances where you were receiving money for Government purposes and manifestly applying it for his daughter’s education? Mr Meer: I did trust him, my Lord”
[130]Mr Sullivan then asked Mr Meer a series of questions about the sequence of transfers concerning Harptree which we have mentioned at paragraph [64] and following above. He started with Mr Kabwe’s statement “the client has request for some money from Jarban”, to which Mr Meer said he assumed the client to be Harptree. Mr Meer appeared to have no recollection of having been a signatory on any account for Harptree or for Belsquare, but accepted that he must have been on being taken through the correspondence (see paragraph [65] above). He denied that anything struck him as odd about this process of getting money from Belsquare to Zambia via his firm’s client account rather than more directly. Mr Sullivan put to him, in the light of his denial of having had any authority on behalf of Harptree or of Belsquare, and his acceptance that he must have had, from the documents:
“Mr Sullivan: That would suggest to me that you know a lot more than you are letting on? Mr Meer: I do not, my Lord. Mr Sullivan: Because there is no point in Mr Kabwe writing to you giving you instructions, if you don’t know what it is about, is there? Mr Meer: I honestly don’t know, my Lord.”
[131]Mr Sullivan pursued a similar theme in relation to Mr Kabwe’s instruction on 21 April 1999, mentioned at paragraph [71] above, under which he was to split a receipt between several ledgers, and a number of purposes were indicated for the allocation of different sums to the different ledgers. Again Mr Meer denied knowing anything about the various different purposes identified, Mr Sullivan asked what point there was, in that case, in Mr Kabwe telling him about them, and Mr Meer said there was no point.[132]He was asked about the payment of $100,000 to Boutique Basile, for which see paragraph [72] above, and a similar sum to another payee in Switzerland, as to what Government purpose he thought could be served by a payment to tailors and shoe fitters in Switzerland, to which he said that he did not know that this is what the payees were, and he took it for a commercial transaction.[133]Mr Sullivan then asked him a series of questions about the regulations and guidance as regards money-laundering, which was revised by the Law Society in 1999. We need not quote much from this evidence. Mr Meer accepted that he had to be satisfied that in acting for a client he was not facilitating money-laundering, and for that purpose, if he received money to be held for a client, he needed to know why he was receiving it, and what was its source, but he did not accept that he necessarily had to know why money was to be paid to any beneficiary of a payment out of the money so held. He did accept that, if the payment to the firm was not for the purpose of an underlying legal transaction, he needed to be satisfied whether his client account was merely being used as a bank account. He accepted that if he could not be satisfied of the source of the funds, he could not be sure that the money was clean. It was then put to him that receiving money from an unidentified Swiss bank account would put any solicitor on his guard as to the possibility of money-laundering. His answer was that he was receiving it on behalf of a client whom he trusted and respected at the time and accepted his explanation that the money was coming in for his credit, though he had to accept the judge’s next point, that this only told him what was happening, not why it was, nor what was the source of the funds. The evidence suggested that the revised Law Society Guidance went out to every solicitor during 2000. Mr Meer said in his witness statement (paragraph 96) that if it was sent out it is likely that he read it, although he was not sure that it would have added anything much to the Blue Card warning that he had already seen. Previously he had been asked about a series of eight receipts from two different Swiss banks and one bank in Luxemburg, in quick succession during December 1999 and January 2000, the source being identified in each case by words such as “by order of one of our clients”: see paragraph [74] above. In none of these cases had Mr Meer asked any question of anyone as to the identity of the payer or the source of the funds.

The judge asked him:

“Judge: If you read it, you must have known that these transactions cause you difficulties with that guidance, don’t they? Mr Meer: If I read it, yes, yes, my Lord, it would have caused difficulties. Judge: Let me just look at the witness statement again. So either you didn’t get it, didn’t read it, or didn’t act on it. That is the position isn’t it? Mr Meer: That is correct, my Lord.”
[134]Mr Sullivan pressed him further with the guidance, to the effect that even if the client was long-established and highly esteemed, that did not dispense with the need to ask the source of the payments, which he accepted somewhat hesitantly (“I suppose I do”). Mr Sullivan pursued the questioning, which was later taken up by the judge, in the following passage:
“Mr Sullivan: In other words, it is no answer to say: “I received instructions from the clients and while I was providing no underlying legal services, did not know the origin of monies in some cases, did not know the purpose of the receipt, did not know the beneficiary of the disbursement, did not know the purpose, I trusted the client.”
That argument, simply in the light of these regulations and guidelines, is no answer, as his Lordship suggested about three or four minutes ago? Mr Meer: My Lord, I felt I was performing a service for my client. Judge: Every solicitor who money launders money provides a service to the client, but it is not a proper service. You have not identified any service that you have done apart from allowing money to go through your client account, have you? Mr Meer: My Lord, I felt I was assisting ZSIS, my Lord, in its work. Judge: Do you believe the fact that you are assisting ZSIS enables you to disregard this guidance? Mr Meer: No, it does not, my Lord. Judge: Absolutely. Why do you think that is? Mr Meer: Why do you think….? Judge: Why do you think the guidance and regulations apply even to secret transactions? Mr Meer: To safeguard the profession, my Lord Judge: Well, it is not the profession, is it? It’s to safeguard the victims who are defrauded? Mr Meer: That is also true, my Lord. Judge: And you will know from your experience, I would expect, that one of the easiest ways of people defrauding people is to suggest that matters are all sort of secret and have to be shrouded in mystery and cannot be talked of in public, aren’t they? Mr Meer: That is correct. Judge: That is why the regulations and guidance would override somebody telling you it was ZSIS, because the people telling you might themselves be stealing from ZSIS, might they not? Mr Meer: It, it, it could happen that was, my Lord.”

Mr Meer: To safeguard the profession, my Lord

[135]Later in the cross-examination he again accepted that he was in breach of the guidelines by not asking as to the source of moneys received.[136]Turning back to the general sequence of disbursements, Mr Sullivan came to the payment on 24 November 2000 of Dr Chiluba’s daughter’s school fees (see paragraph [74] above). Mr Meer accepted that he knew F Chiluba to be the President of Zambia, and that money from the Harptree account was being used for this purpose, though he understood Harptree to be owned beneficially by ZSIS. He said that he did not consider it to be an improper disbursement of public funds.[137]Then Mr Sullivan came to the BK payments. He asked Mr Meer about the first, on 22 December 2000, credited to the Harptree ledger, in relation to which the credit entry says:
“Katumbi Betti – KBC Bank”
. He said he did not know who Katumbi Betti was, and he assumed that the reason for the receipt was that she was a client of AFSL, but he was given no information as to the purpose of the receipt of the funds by Harptree. Later he moved to the second and later payments. The two largest of the BK payments were credited to an AFSL ledger, and the other two to a Harptree ledger. As in relation to other matters, he asked no questions, and could not say why except that he trusted Mr Kabwe at the time.[138]We can move on, as Mr Sullivan did at the end of his cross-examination, to the payments made after the publication of the articles in the Zambia Post in June and July 2002 which brought to the public eye the allegations of corruption and the involvement of MCD, and which led to the creation of the Task Force on Corruption. There were two payments, both in November 2002: $7,500 to Mr Robert Simeza, Mr Kabwe’s lawyer, and $75,000 on the instructions of AFSL to Cave Malik on behalf of Harptree: see paragraph [79] above. As to the first, Mr Meer said he thought it was a legitimate payment to make out of money which he said he held to the credit of AFSL on the 2535/1 ledger, even though he had said that he ceased to act for AFSL immediately after the publication of the articles, despite the fact that Mr Kabwe and Mr X F Chungu had both been arrested in Zambia, and despite the enquiries with the firm by the SFO on behalf of the Zambian authorities earlier in 2002, and the start of an inspection by the OSS in July 2002. His ultimate position on this was “It is difficult to explain now, my Lord, but I did accede to the request.”[139]As for the $75,000 payment, he made this payment on the instructions of Mr Kabwe, despite all the matters we have mentioned in the last paragraph. He said he was “in a quandary and pondered over the matter” at the stage of the original request from Cave Malik, but that Mr Kabwe continued to be the person authorised to give instructions on behalf of Harptree, and that accordingly the request should be implemented. He said he thought it was permissible for him to act on Mr Kabwe’s instructions because it was Harptree and had nothing to do with AFSL, though he accepted that he was becoming disappointed with Mr Kabwe and was finding it difficult to trust him.[140]In the course of his cross-examination by Mr Veen on behalf of Mr Desai, Mr Meer said that the service that he made available to Mr Kabwe and AFSL following the discussion at the Churchill Hotel was one that the firm did not offer to any other client, and he accepted that it was an unusual service for solicitors to provide. It would be one thing for a solicitor, on his client’s request, to discharge a liability on behalf of the client out of money held for the client which had been derived from a transaction undertaken by way of legal work on behalf of the client, but in the absence of legal work, Mr Meer accepted that this was not something that solicitors would usually do.[141]One issue that arose was whether Mr Meer had told Mr Desai about the discussion at the Churchill Hotel. In cross-examination by Mr Veen he said that he did not recall whether he had discussed with him either the meeting or the unique service provided to AFSL and Mr Kabwe as a result of the meeting, but he was not prepared to accept that he had definitely not told him about it. In re-examination, he said this:
“Mr Head: Did you talk to him [Mr Desai] with the meeting in 1995 with Mr Kabwe and Mr Chungu? Mr Meer: I must have, my Lord. I must have also spoken to him before I went to that meeting.”
[142]He went on to elaborate on what he must have told him. The judge then took the point up, this being the first time Mr Meer had suggested that Mr Desai had known about the meeting. Mr Meer said he could not definitely recollect telling Mr Desai, but he believed that he would have told him. He said he could not be certain that he did tell him, but it was an important meeting, and he believed he would have told him. Asked why this was not in his witness statement he said that this was because he had not been asked. Plainly, and justifiably, the judge took a dim view of that answer from a professional lawyer. He was also unimpressed by Mr Meer’s evidence that he had told Mr Desai before or after the meeting with Mr Chungu in 1995, while he was unable to recall any discussion with Mr Desai about a notice received by Mr Desai from the SFO in 2002 which referred to payments between the US company Systems and Mr X F Chungu, which he accepted that Mr Desai had passed on to him. He could not recall whether Mr Desai had asked him anything about Mr Chungu, or anything about any discussion they had had about the notice. The judge was very critical of Mr Meer in his judgment about this evidence of having spoken to Mr Desai about the 1995 meeting, and mentioned that the suggestion that he had done so was withdrawn by Counsel on instructions the next day: see paragraphs 549-550.[143]That is a sufficient review of the evidence relevant to the question of Mr Meer’s liability. It is evident from what we have summarised and quoted that Mr Meer was, as the judge said, an unsatisfactory witness. On several points he was unable to explain himself clearly or coherently. No doubt it was a strain to have to give evidence over all or parts of six days, but equally it may well have been a strain for Mr Meer to find that he could not provide an explanation of what he had done which was consistent with what he admitted was his duty as a solicitor in the light of material of which he accepted he was aware.

The judgment

[144]In view of Mr Onslow’s sustained and well-focussed submission to the effect that, despite having set himself the correct test, the judge failed to apply it correctly, made serious errors in his references to the evidence, failed to deal in his judgment with matters which pointed in Mr Meer’s favour, and in one respect applied the wrong burden of proof, we will next turn to the judgment, and refer to the more important passages relevant to these challenges. It is to be remembered that in his judgment the judge was dealing not only with the claims against Mr Meer and Mr Desai but also with the claims against the various primary conspirators and also with others alleged to be liable as assisters in one way or another, in particular Mr Shansonga and the firm of Cave Malik. It is, necessarily, a very long judgment and it is understandable that the judge should have dealt with some issues more briefly than he might have done if he had had a less complex history to consider, and fewer separate claims on which to adjudicate.[145]Mr Onslow accepted that, at a number of points in the judgment, the judge had set himself the correct test as regards dishonest assistance. The judge also made a number of other important comments about the task facing him in determining the liability of the various different defendants. For example at paragraph 83 he noted the importance of distinguishing between what material proved in evidence was known to which defendant, in order to assess the liability of each defendant correctly in the light of what that party knew. He noted, correctly, at paragraph 90 that the burden of proof was the balance of probability, but that strong and cogent evidence was required for a finding of fraud or dishonesty. In the same paragraph he said that if a defendant (especially one accused of dishonest assistance) provided an explanation, a finding of liability would have to involve rejecting any such explanation as inherently improbable. At paragraph 91 he said that where a defendant is a professional of good standing, a finding of dishonesty is one which, because of its seriousness, must be based on a careful assessment of the evidence. Then at paragraph 92 he said this:
“Against that the civil standard still remains the requisite standard and I bear in mind that primary fraudsters are only successful in activities like this if secondary people are willing to assist them. Of course the assistance may be honest; but negligent or misguided; it is not inconceivable that particular individuals are chosen because they may be of an unquestioning (but honest) nature or in some other way may be reluctant to ask questions and thereby be incompetent and failing in their professional duties but not be dishonest. It is a question of degree. In respect of the UK based Defendants who are all alleged to be assisters it will be necessary to view the evidence against them and their evidence and come to the appropriate conclusion after that review of the extent of their role in assisting the primary fraudsters or being fellow conspirators with them.”
[146]With respect, we would question the comment that the difference between negligence and dishonesty is a question of degree. Either the person in question does know (or clearly suspect) the facts which show that the relevant conduct is dishonest, or he does not. It may not be easy to tell on which side of the line a particular defendant stands as a matter of fact, but the dividing line is clear. To anticipate something the judge said later, it is one thing to throw caution to the winds; that is likely to lead to negligent conduct. But even to do that to the nth degree does not involve crossing the dividing line and passing over to dishonesty.[147]The judge said that the legal burden of proof rested with Zambia throughout to show that Government money had been stolen and misapplied. However, if Zambia proved that payments made through the Zamtrop account had, on the face of it, been applied for non-Government purposes, it was then for a relevant defendant, at any rate one of those primarily liable, to show what had become of those misappropriated moneys, if he wished to reduce the liability arising: paragraph207. Correspondingly, for those liable in dishonest assistance, the judge said that Zambia had limited its claim to money passing through the hands of the particular defendant, and therefore the claim was confined to sums which had apparently been misappropriated. It would then be up to that defendant, by way of an evidential burden of proof, if he wished to reduce his liability, to show that the sum in question had not been misapplied: paragraph208. The judge made much the same point in relation to Mr Meer in particular at paragraph 603. He said that because Mr Meer acknowledged that he knew he was receiving Government money, it was up to him to prove that it was applied lawfully, and that the only lawful application would be a disbursement under the Churchill Hotel agreement, that is to say one which is for the purposes of ZSIS. Mr Onslow submitted, rightly in our view, that this is correct if the liability of the defendant to account for the particular sum has been established, but that it is always for Zambia to prove that the defendant had the necessary knowledge both that the money belonged to the Government and that its application was not proper.[148]That point is relevant to the question whether Mr Meer realised that payments out of his client account were not for ZSIS purposes. As mentioned above, Mr Meer understood that secrecy was an important feature of the arrangements discussed at the Churchill Hotel. The judge noted, consistently with this, that on several points Zambia’s witnesses were obsessed, even to quite ludicrous degrees, with secrecy. Examples of these comments are to be found at paragraphs 243 (about Brigadier General Muchopa) and 244 (about Mr Regis Phiri, successor to Mr X F Chungu as Director-General of ZSIS). Perhaps the clearest and most succinct comment is at paragraph 140:
“I could not understand the reluctance of AGZ to produce the document. The only explanation that seemed to me to have any kind of credibility was the “traditional” view of secret service organisations that everything they do (down to the ordering of the light bulbs) is a secret.”

The judge made similar points also at paragraphs 145 and 148.

[149]Mr Onslow submitted that, despite the judge’s awareness of the point in this context, he did not take it into account when considering whether Mr Meer did appreciate, or should have appreciated, that a particular payment to a third party was not, or might not be, for the purposes of ZSIS.[150]The judge came back to the question of secrecy at paragraph 639. He said it was accepted that “having a spy client” would not absolve Mr Meer from complying with his professional obligations as a solicitor, and that in reality the arrangement would not have supported secrecy on the part of ZSIS. He said that Mr Meer provided no credible explanation as to why the transactions put through his client account needed any cloak of secrecy. He rejected Mr Meer’s explanations based on a supposed honest need for secrecy, and described the assumptions that Mr Meer said he had made as not being understandable. In terms that would not of itself go to show dishonesty, but in the context of the judgment as a whole, and that section of it in particular, it was clearly part of the judge’s reasons for holding that Mr Meer’s evidence was not credible, and that the true explanation was that his conduct was dishonest.[151]Next, the judge undertook a review of some of the legal issues, including as to liability in conspiracy and for dishonest assistance. As already noted, much of the debate before him, though raised in the grounds of appeal, became irrelevant to the appeal before the hearing began. It is also unnecessary to discuss the liability in conspiracy, which the judge regarded as co-extensive, as regards the secondary parties, with that in dishonest assistance. He noted that, on authority, a conspirator can join a conspiracy at a later stage, even tacitly, so long as he is aware of all the essential facts and shares the same object. He commented (paragraph 328) that this is very similar to the test for dishonest assistance where a party, such as Mr Meer, becomes aware of things that he ought to question but dishonestly fails to question them.[152]As for the test of dishonesty, in relation to dishonest assistance, the judge said (at paragraph 334) that it “is essentially a question of fact whereby the state of mind of the defendant had to be judged in the light of his subjective knowledge but by reference to an objective standard of honesty”. Then at paragraph 340 he said this:
“The test is clearly an objective test but the breach involves a subjective assessment of the person in question in the light of what he knew at the time as distinct from what a reasonable person would have known or appreciated. As the passage stresses carelessness is not dishonesty and dishonesty is to be equated with conscious impropriety. However self evidently a person is not allowed to set his own standard of honesty in particular circumstances. I observe that if he were there would never be any liability because the cases only come to trial if the person denies he is dishonest and did not believe he was dishonest. All that is said in my view is another way of posing the jury question. Merely because a person says he did not believe what he did was dishonest does not mean the court has to accept that. If the court is of the opinion that with his knowledge he consciously departed from the objective standards of propriety he is dishonest. The text equally establishes that honest people do not deliberately close eyes and ears or deliberately do not ask questions lest he learns something he would rather not know and then proceed regardless.”
[153]He also referred, at paragraph 371, to Lord Scott’s observations about Nelsonian knowledge referred to at paragraph [21] above. He added the comment that it was necessary to establish on which side of the line between dishonesty and incompetence the relevant conduct lay, particularly because Mr Meer acknowledged that he had been “extremely negligent” in the way he conducted matters.[154]In a later section of his judgment, dealing specifically with Mr Meer, the judge quoted, at paragraph 585, this passage from the judgment of Mance J in Grupo Torras v Al-Sabah (No 5), [1999] CLC 1469, at 1618:
“In my judgment no honest lawyer would have implemented the instructions which Mr Folchi recounts in this transaction unquestioningly and uncomprehendingly in the manner which Mr Folchi did. There can be no question about Mr Folchi’s competence. An honest lawyer in his position would, to safeguard himself and his clients, have insisted on obtaining a proper understanding and assurances regarding the situation (quite possibly in writing despite the supposed confidentiality of what was occurring). If his clients would not give him this, he would have refused to become involved. I do not on the material before me conclude that Mr Folchi became knowingly party to the scheme to injure GT or THL. But I do conclude that Mr Folchi received and complied with instructions which conflicted, on their face and in the most obvious way, with the most fundamental of fiduciary duties, to keep private and corporate affairs and moneys separate. Despite any confidence Mr Folchi may have had in his clients and the distinction of the officers whose accounts were in question and despite the prevalence of the complementary payments, I cannot view it as honest conduct for any lawyer to facilitate indirect payments from one’s client company’s accounts to unknown accounts in the names of the client company’s directors, without any clear understanding as to why this should be necessary or appropriate. Any other conclusion would be an invitation to fraud. Directors of previously impeccable reputation can succumb to the temptations of their stewardship. Any lawyer in Mr Folchi’s position must be taken to be aware of this risk, and I have no doubt Mr Folchi was as aware of it.”
[155]The judge said that Mr Meer was in exactly the same position as Mr Folchi in that case, from the very first instructions to disburse money. Mr Onslow submitted, with some force, that the judge was strongly influenced by the example of Mance J’s approach. He showed us, however, that this passage in Mance J’s judgment was criticised in the Court of Appeal: see [2001] Lloyd’s Banking Rep. 36 at 60. Counsel for Mr Folchi made a submission to the Court of Appeal similar to that which Mr Onslow made to us, namely that the judge had applied an objective test, and had not made any finding of conscious impropriety against Mr Folchi, not even that, suspecting the propriety of the transactions in question, he deliberately closed his eyes and ears or deliberately did not ask questions about them. Rather, the judge expressed his conclusions in terms of what an honest lawyer would do rather than what Mr Folchi actually did, which cannot give rise to a finding of dishonesty. The Court of Appeal was concerned at this, and recognised that there was “obvious scope for argument as to what the judge really meant”. Nevertheless, on a fair consideration of all the judge had said about Mr Folchi, the court came to the conclusion, expressed at paragraph 112, that the judge had decided that Mr Folchi was guilty of “blind eye” dishonesty. “… the Judge is saying that the failure to ask questions was dishonest not because it was negligent not to ask them, but because any honest Spanish lawyer would have done so. Put another way, he is saying that this failure on the part of Mr Folchi was deliberately dishonest.” “If his account is to be believed he was unquestioning and uncomprehending. That is not consistent with the Judge's assessment of him as a highly intelligent business lawyer. It must follow that the Judge cannot have accepted that he did fail to understand. He understood well enough, but thought it wisest to probe no further.”[156]For those reasons the Court of Appeal in Grupo Torras rejected the submission on behalf of Mr Folchi that the judge had applied the wrong test, despite the language in which the judge had expressed himself in the passage quoted above. The court went on, at paragraph 115, to observe that in these cases, as with any case of dishonesty, the judge should make crystal clear the basis of his finding so that, for example, if the finding is of blind eye dishonesty, that “the defendant is dishonest by lending assistance after deliberately closing his eyes and ears and/or deliberately not asking questions for fear of learning something he would rather not know”. It cannot be said that Mr Justice Peter Smith failed to make clear that this was the basis of his finding. The only area of uncertainty which he left open, as regards the basis of his finding, was whether Mr Meer actually knew, rather than suspecting and turning his blind eye to the facts. He said that he did not need to decide which was the case (paragraph 587) and that is correct. At the lowest, he found Nelsonian knowledge proved. The question is whether his finding stands up to scrutiny in the light of Mr Onslow’s challenge.

The individual Defendants

[157]Having reviewed the various issues of law, the judge turned to deal with each individual defendant, starting with Mr X F Chungu and Dr Chiluba. It is right to refer to some of his opening remarks in this part of his judgment, at paragraph 423:
“I do not propose to deal individually with every point made in all the submissions but rather will distil those submissions in the light of the evidence I have seen. To do otherwise would mean a judgment of hugely disproportionate length. My findings will be based primarily on documents and the evidence of witnesses especially in the light of cross examination. All witnesses had failings; it is necessary for me to evaluate the failings in the light of their evidence as a whole and to conclude whether they were truthful or untruthful and why they were untruthful (see the EPIcase referred to above). I also regard it as essential to evaluate the case against each Defendant in the light of their knowledge. I have to be particularly cautious because AGZ has on occasions tended to blend all the evidence against all the Defendants.”
[158]His earlier reference, alluded to there, was as follows (paragraph 249):
“I remind myself of the need to assess each individual witness’s performance as a whole. Of course if it is established that a witness lies one takes that into account. How that is taken into account involves an evaluation of the witness’s performance as a whole see my decision in EPI Environmental Technologies Inc v Symphony Plastic Technologies Inc[2004] EWHC 2945 (Ch), [2005] 1 WLR 3456.”
As he said, the comments in that judgment (at paragraph 74) were very much in point in the present case. His judgment in the EPI case was affirmed in the Court of Appeal, [2006] EWCA Civ 3, without comment on the judge’s observations about witnesses or any other comment requiring report: see [2006] 1 W.L.R. 495.[159]At paragraphs 486 to 502 the judge considered the evidence in relation to Mr Kabwe. Earlier, he had described AFSL at paragraphs 294 to 313. On the basis of that material he concluded that Mr Kabwe had been a participant in the Zamtrop conspiracy from the first, and was liable accordingly both in conspiracy and in dishonest assistance, in the latter case for payments made both through MCD and through Cave Malik.

Mr Meer

[160]At paragraph 541 the judge came to the liability of Mr Meer, which he discussed over the following paragraphs, up to paragraph 643, turning then to Mr Desai. We must examine this part of the judgment closely. The way it is arranged is as follows. He considered first various matters of general importance and background, including the Churchill Hotel meeting. He then dealt with the first three payments into the MCD client account, and with payments out of it up to the first payment out after the first Zamtrop receipt. That enabled him to reach a finding as to Mr Meer’s liability, but it was one which he said was supported by other matters. These he dealt with in the following sections of the judgment: first Harptree Holdings Ltd, secondly matters arising after June 2002, and lastly the Blue Card warnings, before returning to some more general comments about Mr Meer. All of these are relevant to the judge’s finding that Mr Meer had dishonestly assisted, so we will look at his reasoning on each of them before assessing finally his decision as to liability.[161]The judge referred to Mr Meer’s professional history in summary at paragraph 542, to his assertion that he maintained especially high ethical standards, to his being intelligent and experienced, and to his acting for Mr Mandela and the latter’s character reference, at paragraph 543. Having then summarised the Churchill Hotel agreement, as we have quoted at paragraph [31] above, the judge then said this:
“545. As I have set out above this was a key part of the conspiracy. It led to the disbursement of $9,260,000 through MCD’s client account of which $7,021,020.17 have been traced by GT into the Zamtrop account from MOF. This is actually no surprise for IM as he knew of the Zamtrop account and he knew that the monies coming from it were Government monies. His case is that he was acting for ZSIS in this secret operation. During the course of his evidence he attempted to put forward a case that he was acting for AFSL to justify disbursements made at the behest of FK. However his primary case arising out of the Churchill Hotel Agreement was that the whole operation was for the benefit of ZSIS’s operations. 546. He agreed to this willingly. The following matters are surprising:- (1) He kept no record of the meeting despite its importance and despite the obvious need to protect himself. (2) There was no correspondence or letter of instruction from XFC or FK. It could be said that that was because of the secrecy but I do not accept that. There is no reason why there cannot be written communications without going into the detail but which confirm the position. (3) IM concealed the Churchill Hotel Agreement from ND. (4) He never questioned FK’s instructions as to how the money was disbursed and does not assert that any of the disbursements had any underlying legal purpose (save the Jarban acquisitions) and even then the acquisition was suspicious in the manner it was carried out. (5) He never asked why any particular transfer was being effected. (6) He never explained with any specificity when ND was asked to sign authorisations what the purpose of the transactions were.”
[162]Mr Onslow submitted that these paragraphs demonstrate a number of errors on the judge’s part, and that a particularly serious one is his reference to Mr Meer as acting for ZSIS. This appears from these two sentences in paragraph 545:
“His case is that he was acting for ZSIS in this secret operation. During the course of his evidence he attempted to put forward a case that he was acting for AFSL to justify disbursements made at the behest of FK.”
[163]The natural and proper reading of the statement “he was acting for ZSIS” is that that organisation was his client. But Mr Meer never said that his client was anyone other than AFSL (leaving aside acting for Mr Kabwe personally on some matters and later for Harptree). Perhaps the judge meant to say that he was acting for the benefit of ZSIS, but that would be difficult to reconcile with the comment “he attempted to put forward a case that he was acting for AFSL”, which suggests that the judge did not accept that AFSL was his client. Nor would it fit with the judge’s apparent acceptance of Mr Meer’s account of the Churchill Hotel discussion, as summarised at his paragraph 544, which does not suggest that he was to act for anyone other than AFSL as client, and his finding that Mr Meer took that proposition at face value, and did so honestly. If the judge thought that Mr Meer did contend or believe that ZSIS was his client, that would have been a serious misapprehension as to Mr Meer’s evidence.

Mr Meer not having told Mr Desai about the Churchill Hotel meeting

[164]The judge also regarded it as a particularly serious failure that Mr Meer had not told Mr Desai about the arrangement. Mr Onslow submitted that this was an unfair comment, given that the judge accepted that Mr Meer was not acting dishonestly at this stage. It seems to us that the force of this submission is somewhat reduced when one realises that, even though acting honestly, Mr Meer had agreed that the firm would provide a service which it offered to no other client, namely receiving and disbursing payments unrelated to any underlying legal work, for which no, or no significant, remuneration would be earned, which was motivated by Mr Meer’s gratitude to Zambia (which Mr Desai had no particular reason to share), and (whether or not Mr Meer realised it) was incompatible with the Blue Card warnings already issued.[165]The judge’s criticism of Mr Meer for his attempt to suggest that Mr Desai had known about the meeting, in paragraphs 549 and 550, does seem to be an over-reaction. Moreover it appears to be inconsistent with one of his clear findings about Mr Meer, namely that he was not dishonest at the stage of the Churchill Hotel meeting. Since the judge found that Mr Meer was not at that stage a party to any conspiracy, it could not have implicated Mr Desai into a conspiracy if he had known in advance, or immediately afterwards, of the meeting and what was said in the course of it. The judge’s comment that it was a calculated attempt to implicate Mr Desai (paragraph 550) is therefore illogical. In this respect, the judge’s highly critical attitude to Mr Meer is undermined by his own findings. The importance that the judge attached to this is apparent from his identification of it as one of the six points summarised at paragraph 546, at the outset of his assessment of Mr Meer’s part in the story, as well as from the terms of what he said at paragraphs 547 (“the failure to tell his co partner is a very serious failure”), 549 and, in particular, 550. What is plain, however, is that it was one of a number of aspects of Mr Meer’s evidence which showed that, despite his being “a careful and measured answerer of questions”, he was an unreliable witness.[166]The judge then made the point that he would not entertain a submission that witness was not to be relied on based on matters which had not been put to the witness in cross-examination, because the witness must have the opportunity by his answers to show by his answers and his demeanour that he is honest and to be believed. He also referred to Mr Meer’s lengthy ordeal in the witness box, and to the fact that he had on several occasions required a question to be put to Mr Meer a second time in order to be sure that he had answered it with a proper understanding of its import (see paragraph [103] above).[167]At paragraph 555 the judge referred to the inadequacy of some of Mr Meer’s answers, particularly his conduct in relation to the Blue Card warnings and what the judge said was his repeated statement that “he did not feel it appropriate to question his client’s instructions”. Mr Onslow pointed out, correctly, that this was not what Mr Meer had said, not even once let alone repeatedly. Rather, what he said, repeatedly (some of the instances being quoted above), was that he did not feel it necessary to query an instruction. The difference of meaning between necessary and appropriate in this context could be significant. The word “appropriate” suggests an implication that Mr Meer wanted to, or thought he should, question Mr Kabwe, but did not do so because it would not be the appropriate thing to do. What appears consistently from Mr Meer’s evidence, however, is that he never thought of questioning Mr Kabwe, because he did not need to do so, or in other words because there was no reason for him to do so. The difference of meaning may not in all cases be significant, but it suggests an attitude on the part of the judge to Mr Meer which found expression in criticisms of Mr Meer which were not justified by the evidence. There were plenty of criticisms that could properly be made of Mr Meer’s evidence, and the judge made many. But his additional unjustified comments raise a question as to whether his assessment of Mr Meer as a witness was based on a proper and fair evaluation of his evidence, of which the judge had a transcript, as he did of the entire proceedings.[168]The judge identified correctly the question at the heart of the case, which he posed to himself at paragraph 556: was Mr Meer incompetent or dishonest, fool or knave?

Factors relevant to probability

[169]He referred to a number of points which are plainly relevant to his assessment. One is that Mr Meer is an experienced solicitor, in practice for a long time, which might suggest that it is unlikely that he would act dishonestly. Mr Onslow elaborated on this, by reference to Mr Meer’s standing, in particular his connection with Mr Mandela, and asked whether it was probable that Mr Meer would jeopardise that. As against that, the judge commented that Mr Meer’s experience showed that he would be aware of the traps of international fraud. He said at paragraph 559:
“His experience therefore makes it more difficult for me to accept that where I find he has behaved inappropriately that was negligence as opposed to dishonesty.”
[170]Mr Onslow challenged that comment, but it seems to us that what the judge meant was that, because of his experience, it was not probable that he would fail to recognise indications of money-laundering or other fraudulent activity, in the way that a person without such experience might. On that basis the comment fits with what the judge said at paragraph 565, that Mr Meer was not a young naïve person. We will consider later whether that was a fair evaluation of Mr Meer, particularly as regards money-laundering.[171]The judge’s third point, at paragraph 560, was that Mr Meer made little or no money out of his involvement. He asked:
“Why should such an experienced solicitor at the pinnacle of his career become involved in a dishonest conspiracy with no apparent financial benefit accruing to him?”
[172]That recognises, in succinct form, the points made by Mr Onslow about improbability both as regards lack of motive and as to what he would have been jeopardising, for no apparent motive. Mr Onslow also made the point that, given Mr Meer’s evidence, not challenged in cross-examination, of his gratitude to Zambia, it was all the more unlikely that he would participate in an operation involving defrauding the State of Zambia of millions of dollars. Mr Sullivan said that the point had not been made in those terms to the judge, so that it was not surprising that he did not refer to it.

The judge touched on this point again at paragraph 631, where he said:

“It is no good IM submitting that he made little direct financial money out of the transactions. That often occurs and I have no means of assessing whether he perceived he had indirect benefits from being associated with those in power in Zambia. His conduct is clear in my view.”
[174]Mr Onslow fairly submitted that, since the judge had no basis for supposing that Mr Meer thought he would gain indirect benefits of this kind, the judge’s reasoning had to proceed on the basis that he did not have any such motivation. Even so, if the evidence was clear enough, the judge was entitled to proceed without being satisfied as to what Mr Meer’s motive may have been. The relevance of motive as part of the exercise of testing the evidence, as also of the inherent probabilities, was plain, even without express reference to the well-known words of Robert Goff LJ in The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 57. The judge did consider this aspect of the matter, and did so on the basis that no motive for dishonesty on Mr Meer’s part had been demonstrated.[175]He also mentioned (at paragraph 631) another point relied on by Mr Onslow, namely that MCD had maintained its books and records in proper form, so as to record all relevant transactions in a proper way. He did not overlook that; he rejected, on the facts, the submission that it was a pointer towards innocence.[176]The judge then made some comments in paragraph 561 as to possible motives, including the observation that professionals have “in many cases” become embroiled in fraud for little or no personal benefit. He did not apply these comments directly to Mr Meer, so that they appear as no more than comments in passing, so to speak. The fact that the judge made the comments, however, in this part of the judgment, suggests that he must have regarded them as being of some relevance to his assessment of Mr Meer. They are not linked to anything in the evidence in this case, and the judge did not at any stage expressly weigh up the probabilities in the case by reference to this factor.

The Churchill Hotel meeting

[177]His next comments were directly relevant, namely that the Churchill Hotel agreement was very unusual, and that out of self-protection Mr Meer ought to have taken some precautions and agreed on or set out precise parameters as to what he was to do (paragraph 562). The judge then referred to what he called the dilemma that Mr Meer found himself in. Having accepted and asserted that money paid from the Zamtrop account was only applicable for ZSIS purposes, he could not explain the application of some of this money for what was plainly the personal benefit of Mr Kabwe and his family. The judge observed that, in order to account for this, Mr Meer developed the possibility that AFSL was entitled to some of the money as payment for services rendered to ZSIS, but that this theory had not stood up to cross-examination. The same is true of Mr Meer’s later comments that it might have been paid to AFSL either in reimbursement for past services or in advance to be spent in the course of acting on behalf of ZSIS.[178]An important passage in the judgment is that in which the judge held that Mr Meer was not part of the conspiracy at the stage of the Churchill Hotel agreement (paragraphs 566 to 569):
“566. I do not believe IM agreed expressly or by implication to enter into a conspiracy to defraud Zambia at the time of the Churchill Hotel Agreement. I do believe however that when he was asked to do what he says he was asked to do at that meeting he should have been cautious and suspicious. He should have been active in ensuring everything was legal and above board. He did none of the things that one would have expected him to have done to ensure that he was not being used as an engine of fraud. 567. That does not mean he was dishonest at the outset. However as an experienced professional he knows he must apply an independent mind to every transaction he becomes involved in. By definition the unusual nature of the proposal required him to be especially cautious. He threw caution to the wind almost immediately and simply did not question anything. 568. AGZ says the lack of questioning was because he was in the conspiracy from the start. I do not accept that. IM’s background of honesty and integrity leads me to the conclusion that he did not join the conspiracy at the Churchill Hotel Agreement. 569. However his need to question does not end with the Churchill Hotel Agreement. The very nature of the supposed arrangement required him to be careful and questioning. He must apply his professional mind to the transactions that he was subsequently asked to effect. It is plain from his evidence that he never questioned anything FK asked him to do.”
[179]The primary importance of that passage lies, first, in the acceptance that Mr Meer was not then dishonest. He did not actually enter into a conspiracy to defraud Zambia at that stage, nor was he alerted to suspicions as to what was being planned or arranged, such that his failure to question Mr Chungu or Mr Kabwe shows that he was applying the telescope to his blind eye so as not to see the signal. Equally, it follows that what was put to him was capable of being taken honestly at face value. The judge recognised that Mr Meer had a history of professional integrity and honesty such that it was not to be believed that he was recruited at this meeting to a conspiracy of which he had known nothing in advance, and from which he derived no benefit.[180]That being so, Mr Onslow submitted that it was against all probability that Mr Meer would abandon his whole professional background of honesty and integrity as soon as he was asked to make a remittance out of money received pursuant to the arrangements. It is to be noted that the judge’s finding and order against Mr Meer are based on the proposition that he was assisting dishonestly from the moment of the first remittance out of his client account of money which had come in from Zamtrop. The judge therefore had to find that Mr Meer was on notice that this first payment was an improper application of the funds. The finding does not depend on the cumulative effect of the sequence of disbursements; if that had been relevant, the judge would have had to have found that his liability started later, he would not have been liable for the whole amount claimed, and the judge would have had to have decided by when it was that he was aware of the dishonesty.[181]Mr Onslow further submitted that this passage reveals why it was that the judge did find Mr Meer liable from the first, and that it was an incorrect finding. He argued that those paragraphs, with their references to caution and professional duty, and “should have been”, are couched in language relevant to duty of care and professional standards, or in other words negligence, not that of honesty or dishonesty. Mr Onslow’s submission was that, although the judge had posed the test correctly, as mentioned above, when the time came to apply it to Mr Meer, he slipped back into applying a test of negligence, possibly because he was so taken aback by what he saw as the enormity of Mr Meer’s failings.[182]Leading up to this passage, in paragraph 562,

the judge criticised Mr Meer for negligence:

“IM … ought plainly to have taken some protective measures … and should clearly have set out the precise parameters to what should be done”
. That theme was repeated in some of the paragraphs quoted above, in such passages as (in 566) “he should have been cautious and suspicious … he should have been active”; and (in 567) “the unusual nature of the proposal required him to be especially cautious. He threw caution to the wind”, and in the whole of paragraph 569.[183]He made a similar point at paragraph 633, where he said:
“I reject the suggestion that IM should not have been suspicious of FK in 1995. The Churchill Hotel Agreement is so unusual its implementation should be considered cautiously by a professional man. The lack of documentation, the lack of informing of ND and the unusual disbursement requests that arrived almost immediately all required an honest solicitor to question what was going on. IM was dishonest because he did not act as an honest solicitor; he never questioned anything. He cannot have been under any illusions that the monies were Government monies. There can be no commercial transactions that AFSL could have had with ZSIS that could have generated a fee income that ran to at least $7,400,000. An honest solicitor would have questioned this.”
[184]As to that, the judge’s acceptance that Mr Meer did not join any conspiracy at the Churchill Hotel meeting means that Mr Meer did not have to be so suspicious that he could not properly agree to the request which was put to him. The lack of documentation and Mr Meer’s failure to inform Mr Desai were acts (or rather omissions) on his part, so they were not part of what should have put him on his guard. The requests for disbursements are another matter, and we will come to those next. The fact of payments of over $7 million to AFSL, however, cannot show that Mr Meer should have been suspicious of Mr Kabwe at the start, since it depends on the cumulative effect of what happened over time.

The first payments into and out of the client account

[185]Moving on to another of Mr Onslow’s major points, he focussed on an important part of the judge’s reasoning, namely that which was based on his examination of the circumstances of the first payment into the MCD client account, in November 1995, and of the payments out of it. The judge described the credit in paragraph 573. “573. On 30th November 1995 $249,998.51 was received into the MCD $ account. FK had sent a letter dated 24th November 1995 to MCD advising them that he has instructed ZANACO to remit the sum of $250,000 and he requests MCD to hold it to his instructions. MCD’s bankers Nat West notified them of the receipt via swift transfer and it is to be noted that the money came from ZANACO and was by order of “XFC/DN”.IM in his witness statement says that he was not sure whether he was conscious at the time of the identity of the bank sending the monies. I do not accept that. First the letter of 24th November 1995 made the position clear and his Nat West bank instruction make the position clear. IM (in contrast to BT) does not say that he did not review his bank statements. Equally I reject his statement in paragraph 40 that he was not sure that the reference XFC (on the first remittance) was to Xavier Chungu. It is plain it was and he would recall in the light of FK’s fax and letter that reference. This was the first payment I find that he was receiving under the Churchill Hotel Agreement and he knew it. It was therefore received by him on the understanding that it would be Government money used by ZSIS for secret Government purposes and for no other purpose.”[186]As to that, Mr Onslow had both minor and major criticisms. A minor point is that Mr Kabwe’s fax and letter did not include the reference XFC/DN, and it was not clear that Mr Meer saw the bank remittance advice which included those initials. The letter did, however, show that the funds would come from Zanaco, as they did, and the judge was perfectly entitled to hold that Mr Meer knew that at the time. The more substantial criticism is this. There might be a case for saying that, because the money came from a Government owned bank, it was to be inferred either that it was Government money, or at least that it was believed by the recipient to be Government money. However, in the penultimate sentence of the paragraph the judge seems to have overlooked the fact that this payment was not one of those alleged by Zambia to have been of Government money. It was therefore not to be regarded as money in fact received under the Churchill Hotel agreement, but rather as part of the large amount of money not derived from the Government of Zambia which was credited to one or other of the relevant ledgers in MCD’s client account during the material period. At most, the evidential case against Mr Meer could have been that, albeit that this was not in fact Government money, he believed that it was, and the way he acted in relation to it is therefore revealing of his attitude to what could or should be done with Government money.[187]We have mentioned the evidence as regards Mr Meer’s understanding as to the first payment at paragraph [116] above. The judge’s finding in paragraph 573, quoted above, that it “was the first payment I find that he was receiving under the Churchill Hotel Agreement and he knew it” is undermined by the fact that it is not Zambia’s case that he did receive it under the arrangements made at the Churchill Hotel meeting, because it is not alleged to have been Government money. The judge might have found that, although in fact it was not Government money (despite having come from an account at Zanaco), Mr Meer believed that it was Government money paid under the Churchill Hotel arrangement. In order to reach that finding, the judge would have had to have rejected Mr Meer’s denials in his oral evidence that he did not think the money was the first payment under the Churchill Hotel arrangements, to which we have referred at paragraph [116] above, and his explanation in cross-examination of the words “this work” in paragraph 42 of his witness statement, which certainly carry an implication, in the context, that the work referred to was what he was to do as a result of the Churchill Hotel discussions. The judge’s words in paragraph 573 “and he knew it” show that he did reject that evidence. It seems to us to follow that, although the judge appears to have overlooked the fact that this money is not alleged to have been Government money, so that his finding that it was cannot stand, nevertheless his rejection of Mr Meer’s evidence as to his understanding amounted, in effect, to a finding that Mr Meer believed the payment to be Government money, and to be the first payment under the Churchill Hotel arrangements.[188]The evidential basis for such a finding would be, first, the fact that the payment came from the Government-owned bank, Zanaco, secondly the fact that the payment was received shortly after the Churchill Hotel meeting, and thirdly Mr Meer’s evidence in paragraph 42 of his witness statement about the opening of the new ledger, and in particular the reference to “this work”, which as a matter of language can only refer back to the work to be done under the Churchill Hotel arrangements. It would have been open to the judge to prefer those indications and to reject, as untrue or unreliable, Mr Meer’s evidence to the contrary. It is fair to say that his denial of such a belief was not very strong or clear, as already noted at paragraph [116] above.[189]The point has wider significance because of the ensuing payments into and out of this ledger in the client account. Mr Meer credited to this ledger not only the first payment, as to which, though it was not in fact Government money, there were objective indications that it was, but also the second payment, from Paine Webber. As to this, there seems to be no basis on which it could be said that he was on notice that it was Government money. The judge’s criticism in this respect was that it ought have been credited to a ledger in Mr Kabwe’s name, not to one which, despite its ostensible name, was for the benefit of AFSL, and in particular one which had been opened to receive Government money. The new account, 2535/1, could not be said to have been opened for Government money unless the first payment was, or was believed to be, Government money. If it was not, then the only criticism is as to the mixing of what was AFSL money (the first payment) with what the judge said was Mr Kabwe’s own personal money (the second payment). Mr Onslow submitted, with some reason, that the second payment, even if representing the proceeds of shares, could have been properly for the credit of AFSL, as a financial services company, and also that since AFSL was owned by the Kabwe family, there would not be any obvious reason why Mr Kabwe should not cause the proceeds of his shares (if that is what they were) to be paid to the company.[190]At paragraph 579 the judge expressed strong criticism of Mr Meer, as regards the second payment, for having credited Government money to an account in the name of Mr Kabwe. He went on:
“He accepted unquestioningly instructions from FK to disburse money from that account. It is plain that all of the disbursements in respect of the very first payment in are plainly not for Government purposes. An honest person would know that those payments are not being utilised for secret service commitments. IM must have realised that; it is self evident from the nature of the disbursements. It must be appreciated that on IM’s case FK had no beneficial entitlement to the monies. Simply following FK’s instructions as to disbursement would lead to the possibility that IM must be alert to that FK might actually be defrauding the Government. In fact IM asked nothing about the disbursements or why Paine Webber were sending monies which he credited to this particular FK ledger. Equally in addition to the clearly questionable payments to FK’s wife IM really should question why monies coming from Zamtrop account allegedly for the benefit of AFSL are then partially remitted back to AFSL Zambia. By 8th May 1996 virtually all of the monies had gone.”
[191]In saying that, the judge overlooked that fact that neither the first nor the second payment was alleged to be of Government money, and even if Mr Meer believed that the first payment was Government money, there was no basis for saying that he believed the second payment to be so. There was therefore no reason why, so far as payments out were attributable to that second payment, they should not have been made on Mr Kabwe’s instructions, without question, including to Mrs Kabwe. The first payment into the client account which is alleged (and proved) to be of Government money was that received from the Zamtrop account on 21 May 1996. The judge’s comments are apposite for payments out after that date, but in applying them to previous payments out the judge would have had to have proceeded on the basis that, whatever the true position as to ownership of the funds, Mr Meer believed them to be of Government money, applicable only for ZSIS purposes. It seems to us that there is no basis for this in relation to the Paine Webber payment, though there is, as we have said, as regards the first payment, received from Zanaco.

Disbursements

[192]A separate point arising from paragraph 579 which requires attention is the judge’s comments about the nature of the disbursements, which we repeat here for convenience:
“It is plain that all of the disbursements in respect of the very first payment in are plainly not for Government purposes. An honest person would know that those payments are not being utilised for secret service commitments. IM must have realised that; it is self evident from the nature of the disbursements.”
A similar point is also made at paragraphs 580 and 590.[193]Mr Onslow challenged that, particularly by reference to the Government’s own obsession with secrecy, to which we have referred already, at paragraph [148] above. Mr Meer knew that certain payments were made to Mr Kabwe himself (in cash) and some to his wife or, later, for the benefit of other family members. He knew that some payments were made to AFSL itself. As regards other payments, by and large he had no idea who the payee was or what was the reason for the payment, and thus no material from which he could judge, if he had to, whether the payment was or might be a proper one under the arrangements between ZSIS and AFSL of which he had been told in general terms. There was evidence, to which we will refer shortly (see paragraph [202] below), that ZSIS might properly have wished to make large payments to a wide variety of individual or corporate payees, anywhere in the world, whose connection with the security service it might well be desirable to conceal. The judge overlooked this in saying that it would have been manifest that the recipients of payments from the client account were nothing to do with ZSIS or its activities. If it was for Mr Meer to satisfy himself, before he complied with an instruction, that the payment was for ZSIS’ purposes, he would therefore have had to have obtained some kind of verification either from Mr Kabwe or from some other source. Since, on this assumption, he would not have been entitled to act on Mr Kabwe’s instruction alone, it seems difficult to suppose that a confirmation from Mr Kabwe himself would have been regarded as sufficient. If it was not, however, from whom was the confirmation to come? Mr Meer had no contact with Mr X F Chungu after the Churchill Hotel meeting (except for one social occasion some years later) and was not provided with any other means of communication with ZSIS – no doubt for reasons which, with hindsight, are obvious, but at the time would have been consistent with the secrecy and discretion which led to Mr Chungu putting forward the proposition of using both AFSL and, in turn, MCD’s client account for the purposes of “activities” on behalf of ZSIS with which, Mr Meer was led to believe, ZSIS did not wish to be openly associated.[194]If the judge had held that the very proposition put to Mr Meer at the Churchill Hotel should have put him on notice that it was not something that he could properly associate himself with, or give assistance to, then this issue would have to be considered differently. However, given that Mr Meer was acting honestly at that stage, it follows that he took what was said to him on that occasion at face value, and was entitled to do so. It is difficult to see how he can be regarded as dishonest in implementing that which was inherent in the arrangements discussed at the meeting, if he was not dishonest in agreeing to the request put to him at that stage.[195]It seems to us that it was a fair comment on the part of Mr Onslow that the proposition put at the Churchill Hotel was that MCD was to provide a “no questions asked” service to AFSL. It was inherent in what was put to Mr Meer that Mr Chungu, on behalf of ZSIS, wanted secrecy and discretion. That was why (on the face of it) he was proposing to use both AFSL and, in turn, MCD. He represented to Mr Meer that ZSIS trusted Mr Kabwe and AFSL. If Mr Meer was (as the judge held) entitled to proceed on the basis that this was a genuine proposition, then it seems to us to follow that Mr Meer was to be entitled to accept what Mr Kabwe said as well, and to leave it to ZSIS and AFSL, by Mr Chungu and Mr Kabwe, to agree on what should happen to the funds, and to deal with any accounting for what had happened to them, without Mr Meer becoming involved or being required to monitor or check whether payments authorised by Mr Kabwe were or were not proper.[196]A position in which Mr Meer was entitled and bound to act on Mr Kabwe’s instructions without question would avoid the need for him to obtain any kind of verification from anyone other than Mr Kabwe as to whether a particular payment was proper, and would also obviate the need for ZSIS, directly or indirectly, to make a representation to Mr Meer as to whether a payment was proper, something which would not readily fit with the apparent desire for secrecy and the innate desire of such a service for secrecy, of which the judge was well aware (see paragraph [148] above).[197]The judge was strongly influenced in his critical view of Mr Meer by the latter’s attempts to explain on what basis AFSL might have been entitled to dispose of some of the money which had come from Zamtrop for its own purposes, or those of Mr or Mrs Kabwe for example, rather than for ZSIS. However, there was no evidence on which it could be suggested that Mr Meer had any idea of the terms on which ZSIS and AFSL were dealing with each other. Nothing of that was disclosed to Mr Meer at the Churchill Hotel, nor at any later time. He therefore had no basis for anything other than pure speculation as to any entitlement of AFSL as against ZSIS. It was perhaps foolish for Mr Meer to enter into any such speculation but it seems to us that his attempts to offer an explanation on this point should not have been regarded as other than retrospective speculation. What is plain is that AFSL was his client, and that he did not ask any question as to what was happening or why, when Mr Kabwe gave him an instruction on behalf of AFSL to pay money out in a particular way.[198]Mr Sullivan submitted that the judge rightly saw an impossible conflict in Mr Meer’s position, which could only be resolved by a finding that in one respect or another he was not telling the truth. The basis of this conflict was put in this way. On one view, the relevant money was ZSIS money, applicable only for ZSIS purposes, in which case it might be understandable that secrecy was of the essence, and perhaps it was excusable to undertake the operation without any underlying legal work. In that case, however, all disbursements would have to have been for ZSIS purposes, and Mr Meer could not show that to be the case. Alternatively, the money belonged to AFSL and was applicable for its purposes, but in that case there was no justification for secrecy, and no excuse for stretching the ambit of a solicitor’s proper professional activities to providing a banking service.[199]We do not regard that as a true antithesis, or a fair rendering of Mr Meer’s case. His case was that he was to receive money to be held on behalf of AFSL as his client, in connection with operations or activities undertaken by AFSL on behalf of ZSIS. The nature of the operations and the connection with ZSIS required secrecy, but it was for AFSL, and in particular Mr Kabwe, to determine, on the basis of whatever discussions he had had with Mr X F Chungu, what was to be done with the money. The judge’s understanding, during the trial, that this was his position is apparent from the passage of cross-examination which we have quoted at paragraph [115] above. Mr Sullivan made a submission that Mr Meer’s evidence was not that he thought the payments were for ZSIS purposes, but that he thought (in many cases at least) that they were for clients of AFSL. He did say in cross-examination, in relation to some payments, that he assumed the payees were clients of AFSL (there is an example in the exchange quoted at paragraph [120] above) but this was in the context of his position that he did not need to concern himself with why a payment was to be made to a particular person. That, therefore, does not, in our view, place Mr Meer on the horns of a dilemma as the judge said at paragraph 562.[200]Mr Onslow made a separate point to which we have referred at paragraph [147] above, namely that it was for Zambia to prove not only that Mr Meer knew that the relevant money paid into his account was Government money (which was accepted as regards payments from the Zamtrop account) but also that he knew that any given disbursement out of it was not for ZSIS purposes. It was not for Mr Meer to prove that the disbursement was proper. If Mr Meer was entitled to act on Mr Kabwe’s instructions without question, the point does not arise. But if Mr Kabwe’s instructions were not a complete discharge to Mr Meer in respect of the money which he held on account of AFSL (or as the case may be, Harptree), we agree with Mr Onslow that it would be an essential part of Zambia’s case in dishonest assistance to show that Mr Meer knew (actually or with his blind eye) that a disbursement was not proper. Given the secrecy of the security service’s operation, it does not follow that because a payment was, in fact, to a tailor in Geneva, actually or apparently in payment for suits and shirts for Dr Chiluba, Mr Meer should be regarded as knowing that this payment, of which all he knew was the amount and the name of the payee, was not for ZSIS’ purposes.[201]At paragraph 636 the judge recognised that money paid out might have had a “legal purpose”, just as, at paragraph 285, dealing with the purpose for which money paid into the Zamtrop account was used generally, he had recognised that some legitimate payments had been made to third parties out of the account. Going back to the judge’s paragraph 636, he said that no evidence had been adduced to show that any of the relevant payments out of the MCD client account had been for a proper purpose. Leaving aside questions arising from payments to Mr Kabwe or his wife, for example, it was not for Mr Meer to adduce evidence to show that payments out were proper, but for Zambia to show that they were not, and that Mr Meer knew that they were not.[202]In this context, Mr Onslow referred us to passages in the evidence of Mr Regis Phiri, successor to Mr X F Chungu as Director General of ZSIS, in which he accepted that ZSIS did make large payments, which could be into hundreds of thousands of dollars, to individuals or companies, in Zambia or anywhere overseas, including payments which might be characterised by some as bribes, that ZSIS might use a company abroad if it did not want it to be apparent that it was itself involved, and that ZSIS operated on a “need to know” basis as regards the supply of information about itself and its operations. He submitted that this supported that which one might readily infer as to the extent and nature of possible operations of, and payments on behalf of, a national security and intelligence service. That is plainly relevant to the question whether it would have been possible for someone such as Mr Meer to tell, without inside information which he would not have, whether a given payment of any kind was or was not proper for the purposes of ZSIS’ operations.

Payments out after Zamtrop payments in

[203]The judge next came to deal with the first receipt from the Zamtrop account, and to the first disbursement after that, which was of $60,000 to Ib Thoger Daell. Given the importance of the judge’s conclusions as to the position at this stage, we will quote several paragraphs from the judgment. When he refers to “all these disbursements” at the beginning of this passage, he means the disbursements out of the first two payments, together with the payment to Ib Thoger Daell; those are the only disbursements that he has mentioned up to that time. “581. … All of these disbursements take place even though IM’s initial evidence (paragraph 48 of his witness statement) was “so far as I was concerned, however all payments received into Meer Care’s client account (whether from the Zamtrop account or from other sources) were the property of AFSL or, as appropriate Harptree Holdings”. They could then he suggested be mixed with receipts from other sources as directed by FK and could be disbursed according to his instructions. This is despite the fact that from May 1996 onwards monies were received mostly from the Zamtrop account at ZANACO in London.582. He was unable to explain how AFSL had an entitlement to these very large sums of money (in a Zambian context). He was supposedly receiving ZSIS money.583. All of this in my view is impossible. The account ledger 2535 (although in the name of FK) was allegedly opened to show that that was for the ZSIS operations when the disbursements plainly were not. The separate AFSL account was opened 2 years later but as will be seen further in this judgment IM still posted Zamtrop funds on occasion to the original account. His evidence also was that the account had sums mixed in it allegedly from private activities of FK/AFSL or in respect of entitlement on the part of AFSL to receive Zamtrop monies for services rendered. All of this mixing took place without any question by him. It means that he could never be sure whether any payment was properly payable because on his own case he did not know the beneficial ownership of the funds he received. He did not ask so he never knew on his evidence who owned the funds.584. That this was impossible should have been blindingly obvious to the most inexperienced of solicitor. To someone of IM’s skill and experience in my judgment it is impossible for him to act merely on the instructions of FK in the way he did. [In paragraph 585, he quoted from the judgment of Mance J in Grupo Torras, which we have already examined at paragraph [154] above.] 586. In my view IM was in exactly the same position right from the start of the first instructions to disburse monies. He further compounded the situation by the manner of the accounts he operated and the supposed mixing of funds. I reject his evidence that it was AFSL money. He plainly believed that all the monies were to be received in respect of the Churchill Hotel Agreement and were to be disbursed under that regime. If a disbursement was not to be under that regime it ought to have been clarified and justified. IM should have requested that clarification and justification especially in respect of requests by FK to remit money (for example) to his wife and to make payments back to AFSL in Zambia. In my view any honest and competent solicitor would have sought immediate clarification. Given the nature of the supposed transactions IM was particularly vulnerable and he ought to have enquired if only to protect himself and the various potential clients. FK as I have said could have been defrauding AFSL.”[204]The judge may have been entitled to criticise Mr Meer for not keeping separate money payable under the Churchill Hotel arrangement, on the one hand, and money paid to AFSL from other sources on the other. Whatever the position might be as to beneficial ownership of the money, it would have been more prudent to have maintained separate ledgers. However, the fact is that Mr Meer did not do so, and that, on any footing, money was paid into the same ledger from the Zamtrop account and from non-Government sources. There is no reason to suppose that the latter money was not owned by AFSL. The judge’s comments in paragraph 586, that there should have been clarification of the position so that Mr Meer knew exactly on what basis he was to deal with which sums in his client account, are justified. Mr Meer ought, as the judge said, to have enquired in order to protect himself. However, failure to take such a step, which a competent solicitor ought to have taken, is not by itself evidence of dishonesty rather than of incompetence.[205]Later in the judgment the judge reverted to the question of mixing funds, at paragraph 635. At the end of that paragraph he said this:
“He is attempting to mislead the court and in effect submit he did not need to make enquiries because it was all AFSL’s i.e. his client’s money. This is plainly dishonest. No honest solicitor in my view in IM’s position could allow this mixing. I acknowledge he probably had no idea to whom the funds belonged but that was a question that he did not ask because he was simply implementing whatever FK told him. He suggested he was satisfied that he could do that and mix but there is in my view no honest justification that could entitle him to treat monies as belonging to FK/AFSL/ZSIS.”
[206]Likewise at the end of paragraph 636 and in paragraph 637 he said this:
“636. … Although IM suggested that he had no reason to distinguish ZSIS funds from AFSL funds that is an incredible observation to make by a solicitor. 637. A solicitor’s client account does not consist of a separate independent numbered account for each client. What a solicitor does is have one account in which all client monies are mixed together. It is essentialfor a proper understanding of the beneficial entitlement of client account monies to exist that the ledgers which represent each client’s contribution to that global account figure is clearly identified. IM whilst his accounts correctly recorded the incoming and outgoings failed utterly to identify the beneficial owner of the various incoming and outgoings. Normally one would expect a relevant ledger with the name of the client and the funds credited to that to belong to that client. IM fails this logical requirement from the first. He opened account 2535 in the name of Faustin Kabwe. This he did despite the fact that he understood that the remittances were to come from ZSIS via the Zamtrop account. His evidence was that it ought to be monies which belonged to AFSL yet he allowed FK to disburse AFSL monies for clear non AFSL purposes. For the account to be properly operated it should have been designated in the name of ZSIS and the monies attributed to it.”
[207]On the same theme, in paragraph 638 he commented on the mixing of funds in the Harptree ledger as well, with receipts from Zamtrop and from another source, Zarkam, some from unidentified sources or clients, and two of the BK payments. He said:
“These are serious failings. They are in my view an attempt to disguise where the monies are coming from and where they are going to. IM has a role in that because either he knows the dishonesty is going on or he suspects it and dishonestly failed to make any enquiries which would lead an honest solicitor to seek to understand the activities. I agree it is not surprising that IM received $9,000,000 of Zamtrop funds and mixed them in the ledgers as he suggests in his closing (paragraph 74) but not for the reasons he gives. In my view they are part of the cover up and he did it dishonestly and thereby facilitated the unlawful stealing of the monies that were run through his firm. I do not accept having seen him in evidence and cross examination that there is any other credible honest explanation for the enormity of the failings on his part.”
[208]On behalf of Mr Meer, Mr Onslow challenged the judge’s conclusion that Mr Meer mixed funds in the same ledger which ought to have been kept separate, and also, more importantly, the conclusion that, in doing so, Mr Meer was dishonest rather than, at worst, negligent. We will consider this submission later.[209]Going back a little, the judge moved on, after his observations in paragraph 586, to hold that Mr Meer was dishonest, either because he actually knew at that stage what was going on, or because he had a clear suspicion of it, and did not enquire in order not to be told that what he suspected was true. Since, however, the judge said that this conclusion was supported by other material which he set out thereafter and, having dealt with those matters, he himself returned to consider some matters of more general relevance to Mr Meer’s credibility, we will examine that part of his judgment before coming back to the finding of dishonesty.

Harptree Holdings Ltd

[210]The first source of supporting material was the story of Harptree Holdings Ltd. The judge dealt with this at paragraphs 593 to 601. Harptree was a BVI company, acquired, or incorporated, by Mr Meer in January 1997, according to him on the instructions of Mr Kabwe. It has bearer shares which were held by a Channel Islands firm and later by another Channel Islands nominee. Mr Meer said that Mr Kabwe had told him that he would be the beneficial owner of the shares, but that he would hold them as nominee for ZSIS. As the judge said, that is inherently contradictory. It may be that it meant no more than that, as regards the actual holders of the bearer shares, he was the beneficial owner but that, unknown to them, he himself held this interest on behalf of ZSIS. At all events, Mr Meer said that he regarded Harptree as a ZSIS asset.[211]Harptree acquired the shares in the Luxemburg company Jarban SA which, in turn, directly or indirectly owned two properties in Brussels. As Mr Meer knew, money from the Zamtrop account was used to make this purchase. He regarded Harptree as a client and Mr Kabwe as the person entitled to give him instructions on behalf of that client.[212]The judge was extremely critical of Mr Meer in relation to Harptree, on a number of points, including what he called the labyrinthine routing of the ownership of the properties. He said that Mr Meer’s evidence in respect of Harptree was “ambiguous and misleading and deliberately so” (paragraph 596). He said that Mr Meer had not revealed who gave him instructions to set up Harptree, nor any of the documentation, nor how Mr Kabwe was able to exercise control over Harptree. He also criticised Mr Meer (paragraph 597) about his evidence in relation to the completion of a form called a Mandat required under Luxemburg law in relation to the incorporation of Jarban. The form as actually completed was not available, but Mr Meer was cross-examined about what he would have put in the form. It required statements as to the beneficial owner and as to the source of the relevant funds. Mr Meer said that he could not recall, but that he believed he would have identified Mr Kabwe as beneficial owner, rather than Zambia or ZSIS, and would have stated that the source of the funds was Harptree.[213]Next the judge said that some of Mr Meer’s answers in the OSS interview about Harptree had been deceptive, and amounted to lies. He had said that there was a loan between AFSL and Harptree when the judge said he knew that there was no such loan. He failed to reveal who was behind Harptree, and gave a misleading answer as to who was holding the bearer shares.[214]The judge also referred to a report made by Mr Meer to the National Criminal Intelligence Service in 2004 about funds in the firm’s client account held on behalf of Harptree. In this report he identified Mr Kabwe as “the ultimate beneficial majority shareholder” in Harptree, rather than Zambia or ZSIS.

The judge’s conclusion on Harptree is in paragraph 601:

“In my view it is obvious. The Jarban purchase was FK’s pay off for his role in the conspiracy. IM whilst he did not know the over arching conspiracy details took instructions from FK on behalf of Harptree because he believed it belonged to him beneficially. Yet he knew that the purchase was funded by Government monies via the Zamtrop account but did not question FK’s entitlement to them. That failure, (even if his case is to be believed, that it was a ZSIS purchase), and the failure to record that in any document are actions again which an honest solicitor would not do. Such a large purchase of a block of flats and an apartment hotel cannot conceivably have been regarded as a purchase for ZSIS operations. Equally the labyrinthine routing of the ownership of the properties via a BVI holding company with nominee directors and bearer shares and a Luxemburg company interposed show that the whole operation was to hide things. I do not accept that the purpose was to hide ZSIS involvement; it was to hide the fact that Government monies were stolen and used to acquire assets which apparently belonged beneficially to FK and IM dishonestly knew it.”

The judge reverted to this theme at paragraph 635 when he said:

“The most graphic example of this is in fact the Jarban acquisition where all the paperwork showed that the properties ultimately belonged to FK beneficially. Yet IM knew the monies came from the Zamtrop account and the bulk of them have been traced back to MOF. I do not accept that there was any genuine confusion. It is not after the event rationalisation in my judgment it is after the event justification. The justification however is false. There is no serious possibility that IM even on his own case could have seriously believed these large sums of money belonged beneficially to AFSL.”
[217]Mr Onslow submitted that the judge’s criticisms of Mr Meer about Harptree were not justified. We agree that not all of those criticisms were merited. Thus, Mr Meer made it clear that it was on Mr Kabwe’s instructions that he set Harptree up, and as for documents, Mr Meer was not cross-examined on the basis that he had relevant documentation which he had withheld or concealed.[218]The judge’s comment in paragraph 596 that, although all Mr Meer’s instructions came from Mr Kabwe, “he did not consider the Zambian Government or ZSIS to be his client” despite the fact that he knew that Harptree had been funded from the Zamtrop account, is puzzling. Like the judge’s comment at paragraph 545, noted at paragraph [163] above, it seems to show a serious misunderstanding of Mr Meer’s case. Mr Meer was consistent throughout his evidence that ZSIS was not his client, nor had it ever been suggested that it should or would be. Initially AFSL was his client, and he took instructions from Mr Kabwe. Harptree was set up on Mr Kabwe’s instructions, using money derived from Zamtrop, so that it was, in a sense, an offshoot of the service provided by Mr Meer for AFSL as client. Mr Kabwe having instructed him to set up Harptree, and having told him that he was the beneficial owner of the bearer shares (even if he held his rights on behalf of ZSIS), it is not surprising that he should have accepted instructions from Mr Kabwe in relation to Harptree. It appears from the documents mentioned at paragraph [65] above that he had an authority to act for Harptree and for Belsquare.[219]Mr Meer’s answers in the OSS interview do not appear to have been untruthful and, if at times he did not answer every question that was asked, it was open to the OSS officers to pursue any point on which they were anxious to have an answer. His evidence as to the Mandat for the purchase of Jarban was, necessarily and explicitly, an attempt to reconstruct what would have been in the document. To say that these aspects of his evidence were ambiguous, misleading and deliberately so seems to be an unwarranted criticism. Equally, we do not understand the basis on which the judge held that he had lied in the OSS interview on this topic. The judge mentions that he had said there was a loan between Harptree and AFSL “when he knew there was no loan”. It is true that he said to the OSS that he had been told there was a loan, but he was not cross-examined as to whether he believed that there was such a loan, still less to the effect that he knew there was not.

Mr Meer’s conduct after June 2002

[220]Next the judge dealt with Mr Meer’s actions after June 2002, when the Matrix of Plunder articles were published in the Zambian press. Mr Meer accepted that he was aware of these articles, and said that he ceased acting for AFSL after their publication. The judge regarded that statement sceptically, particularly by reason of the payments of $7,500 and $75,000 in November 2002 already mentioned. He also mentioned the payment of $12,500 to Mrs Kabwe on 26 June, but as mentioned above the instructions for that were given to the firm’s bank on 25 June, and it was not established that Mr Meer already knew of the article when he gave those instructions. Leaving that aside, there were the two later payments, and the fact that a substantial balance remained in MCD’s client account for the credit of Harptree, in relation to which Mr Meer took no action, other than making the report to NCIS mentioned at paragraph [214] above. Eventually the judge ordered its transfer to the credit of Zambia at the beginning of the trial.[221]The Press reports identified MCD as being involved in the process of the payments, though without any imputation that it was itself part of the conspiracy. The judge expressed the view that, on reading the articles, if Mr Meer were an honest solicitor: “he would have been bound to question the inter relationship that he perceived between ZSIS and AFSL. He would be bound to question the validity of the payments which had been run through his client account in the previous 6 years. He would want to know answers from FK and XFC.” (paragraph 606) He also said that he would have expected him, if he was an honest solicitor: “bearing in mind the fact that his firm was named in the Article to have contacted the authorities first to protest his innocence and second to assist in any investigation. In fact he did none of these.” (paragraph 607)

He also said that he would have expected him, if he was an honest solicitor:

[222]It does not seem to us that the failure of Mr Meer to contact “the authorities” can fairly be said to be an indication of dishonesty. He had already been approached by the SFO, with whom he had co-operated fully. Soon afterwards the OSS started their inspection. Whatever view one takes of some of the answers given in the interview in 2003, there is no suggestion that Mr Meer was other than fully co-operative with the inspection in all other respects. As for reviewing the prior transactions, and wanting answers from Mr Kabwe and Mr X F Chungu, Mr Meer had only met Mr Chungu twice, and was not in contact with him, nor does it seem likely that he would have obtained any useful comment from Mr Chungu if he had asked him any questions at that stage. As regards Mr Kabwe, he too was directly in the firing line in the light of the Matrix of Plunder articles, and unlikely to offer any helpful comment if Mr Meer had posed any questions to him. On the whole, it seems to us that the decision to cease acting for AFSL which Mr Meer said he took was a prudent and sufficient response, together with waiting for any approach from any investigatory authority, and responding constructively and co-operatively to any such approach. Whether Mr Meer really did cease acting for AFSL is a different question, in the light of the payments made later in the year, and his failure to inform Mr Kabwe that the firm was no longer acting.[223]On that point it seems to us that the judge was justified in his comment that in making this statement, Mr Meer was “being extremely economical with the truth” (paragraph 608). Leaving aside his instruction on 25 June to remit $12,500 to Mrs Kabwe, which may have been given before he knew of the first Matrix of Plunder article, there is no indication on his file that he had ceased acting for AFSL thereafter during 2002. Mr Meer did not have any hesitation in complying with the instruction to pay $7,500 to Mr Kabwe’s lawyer, once he knew the details of the account to which the money was to be transferred, even though this was out of money which he held in the ledger nominally for “FM Kabwe Commercial”, but understood always to be for AFSL. Nor did he have much hesitation in acceding to Mr Kabwe’s request to pay $75,000 out of money he held on a Harptree ledger to Cave Malik. He explained himself as feeling able to act for Harptree on Mr Kabwe’s instructions, even though he would not (he said in his witness statement) act on behalf of AFSL, despite the fact that Harptree had been funded out of the Zamtrop money which was also the source of the principal payments to AFSL, and the very subject of the Matrix of Plunder articles. Mr Aaron Chungu wrote to Mr Meer on 1 November 2002 as a director of AFSL confirming that Mr Kabwe had full authority to instruct MCD on behalf of AFSL; Mr Meer did not reply to say that the firm was not accepting instructions from AFSL. Mr Meer made a note at the time, in relation to the $75,000 payment, (a manuscript note dated 11 November 2002 written on Cave Malik’s fax of 8 November 2002) that he accepted Mr Kabwe’s instructions on behalf of Harptree, which was the client, rather than AFSL. This was unusual, since Mr Meer was otherwise conspicuous by his failure to make notes of telephone or other attendances. The money was to come from Harptree’s ledger, so it was correct that Harptree was the relevant client. However, there seems to be no logical or plausible basis on which Mr Meer could have been prepared to accept Mr Kabwe’s instructions for Harptree though not for AFSL. It may be that the judge was not justified in suggesting that Mr Meer should have taken the initiative of contacting ZSIS (paragraph 618) but it seems to us that, for the most part, the judge’s trenchant criticisms of Mr Meer in respect of these two payments, at paragraphs 609 to 615, are warranted by Mr Meer’s conduct.[224]Mr Onslow submitted that there was nothing about the circumstances of the transactions which suggested that Mr Meer was trying to conceal anything, and that at worst Mr Meer was foolish to make the payments, but that dishonesty was not a fair inference as his motive for acting as he did in these respects. So far as that is concerned, it is certainly difficult to understand how Mr Meer could have felt able to make the payments, rather than just hold on to the money, possibly seeking guidance from the Law Society. His willingness to make the payment to Mr Simeza out of money held for AFSL, together with the absence of any other objective indication that he did, in fact, cease acting for AFSL, provides support for the judge’s statement that, when he said in his witness statement that he had ceased acting for AFSL, this was an invention. It seems to us that these transactions can only be explained honestly on the basis that Mr Meer was being very foolish indeed.[225]Later in the judgment, at paragraphs 641 and 642, the judge dealt with Mr Meer’s response to the order made by Pitchford J. His criticism is that Mr Meer disclosed only the three files which were actually labelled with AFSL as client, and not the 2535/1 ledger which was labelled with Mr Kabwe as client, but which Mr Meer had said in evidence he regarded as an AFSL ledger. The judge noted the submission that this was not an attempt to conceal because the ledgers remained intact in his office, and were referred to frequently in the material that was disclosed, so that their existence and potential relevance would have been immediately apparent, and they remained available for inspection. The judge dismissed this submission as follows:
“I have been provided with no explanation as to this glaring failure. In my view it is another example of IM acting dishonestly. By this stage he becomes more actively dishonest because he is concerned to cover up his involvement in the arrangements.”
[226]It is possible that Mr Meer’s failure to mention the 2535/1 ledger and file was attributable to failure to think properly about the scope of the order. It could be regarded as consistent with this that the affidavit need not, strictly, have specified which files were held, only where they were held. We think that this particular comment on the judge’s part goes well beyond what was justified, but it is a minor point in the overall context.

The Blue Card warnings

[227]The other area in which the judge found that Mr Meer’s conduct supported his conclusion on the main claim was the Blue Card warnings (see paragraphs 619 to 630). He set out the background to and history of the successive warnings and guidance notes issued to solicitors. Mr Meer had accepted that he received at least the original Blue Card warning in 1994 and had read it then. We have set out the points from that warning which were primarily relevant to this case at paragraph [84] above. The judge said, at paragraph 622, that failure to comply with the guidance was not determinative of dishonesty, but that it could be of persuasive value, and that it would:
“expose a professional to allegations at the lowest of gross incompetence and at the highest that failure may be added to the evidence in deciding that the professional in question has been dishonest.”
[228]In relation to Mr Meer he said that his expertise and experience counted against him in this context, because his background and experience suggested that he would be well aware of these matters, and it would be more difficult for him to persuade a court that his failure to pay heed to the guidance was attributable to negligence.[229]The judge noted Mr Meer’s evidence that he did not consider that the Blue Card warnings applied to what he did on behalf of AFSL because he had known Mr Kabwe for a long time, but commented that nothing in the warnings said that they did not apply to existing clients. He said that, if Mr Meer had thought about the warnings properly, he would not have been able to act on the assumption that because he had known Mr Kabwe for a long time, he could therefore trust him.[230]Looking at the case objectively, two of the Blue Card points were of particular relevance: be suspicious of the client who has no discernible reason for using the firm’s services, and be cautious if you are asked to hold large amounts of cash in your client account pending further instruction from the client or for no other purposes than onward transmission to a third party. The example given under the first of those is the client who uses a solicitor a long way away and could get the same service nearer home. The burden of the point in this case would not have been that AFSL had no good reason for using MCD for legal work, but rather that it had no good reason for using MCD’s client account as if it were a current account (albeit always in credit) when it could have used a bank account instead. Really, therefore the point is the same as the second of those mentioned (the third on the Blue Card itself), which is that solicitors should not allow their client accounts to be used for the receipt and disbursement of funds not associated with legal work.[231]As noted above, at paragraph [105], Mr Meer said he read the relevant Blue Card warning as relating to “cash” in the sense of bank notes. That does not seem to be a remotely tenable construction, since the warning speaks of “cash held in client account”, which must therefore refer to a credit balance on the relevant bank account at which the firm holds its client account. However, Mr Meer was not challenged in cross-examination to the effect that he could not have held this belief, so it must be assumed that this was what he thought, however unwarrantedly.[232]That in itself suggests a rather limited view of what is or may be involved in money-laundering. The case made on behalf of Mr Meer at trial, in Closing Submissions, on which Mr Onslow relied before us as well, was that Mr Meer should not be regarded as knowledgeable or experienced as regards money-laundering, but rather that his evidence showed that he had little understanding of what was involved. In particular, on several occasions in cross-examination his answers revealed, it is said, that he did not realise the value for a money-launderer of passing money through a solicitor’s client account, and he did not think that the passage of money through his client account would involve concealment because his books and records were transparent. The point arose first quite early in his cross-examination:
“Judge: So does that mean, then, that your service is to hide where the money is coming from and where the money is going? Mr Meer: No that is not right, my Lord. I was not hiding anything because my books were absolutely transparent. I recorded faithfully where the money came from and where it went.”
[233]Later on the same day of cross-examination the judge put to him that one consequence of the money going through his firm’s ledger was that the identity of the source of the money was lost, to which he said no, because the identity of the source of money coming to him was fully recorded. At the end of the same day Mr Sullivan asked whether it occurred to him that his account might be being used for money-laundering, to which he said that it did not occur to him, and that if he had thought it was, his records would not have been as open as they were. By implication, that answer also assumes, for the alternative hypothesis, that Mr Meer not only knew that it was being used for money-laundering but that he was co-operating in the money-laundering, since otherwise his knowledge would not have affected the record-keeping. Nevertheless, it is submitted, these answers do show that Mr Meer did not realise that, however full and accurate the solicitors’ records may be, it is useful for a money-launderer to be able to show a receipt from a firm of solicitors, as an apparently genuine and honest source. Much later in his cross-examination he also appeared to have no idea that there might be anything suspicious about an unknown offshore third party remitting money to his client account for the credit of a client, and for the same amount to be returned on the instructions of the client 6 months later.[234]The story of what MCD did for AFSL and Mr Kabwe between November 1995 and November 2002 is extraordinary, in the light of the third of the warnings in the original 1994 Blue Card. Although Mr Meer did not accept that this is what he was doing, it is plain that he was providing the service of a bank account, albeit only in credit, or, as it was put in a graphic phrase in Mr Sullivan and Miss Brown’s skeleton argument for the appeals, a “short-term money park”, with almost none of the payments through the client account being related to any legal work done by the firm. It is equally plain that this was not a proper thing for a firm of solicitors to do. As we have said above, the case has to proceed on the basis that Mr Meer did not in fact realise that this operation was incompatible with the third point in the original Blue Card warning. The question is whether he did realise that what was in fact happening (as it certainly was) through the use of his client account was money-laundering on the part of Mr Kabwe. In a sense that is the whole point in the case, though he could, at least in theory, be liable in dishonest assistance without having realised that money-laundering was a correct description for what he was doing and allowing to be done.[235]It was submitted on behalf of Mr Meer that, far from being aware of money-laundering through his international experience in the course of his career in the law and in business, he had no real understanding of what was or might be involved in practice. The point came up very early in Mr Sullivan’s cross-examination, in the context of questions about the Blue Card guidance:
“Mr Sullivan: Being an experienced practitioner, you are probably very familiar with the concept of money-laundering and what is involved? Mr Meer: I am, my Lord.”
[236]His response to that very generally phrased question from Mr Sullivan does not carry a lot of weight as compared with other evidence when he was asked points of detail about money-laundering. Later passages in cross-examination to which we have referred, if taken at face value, cast a good deal of doubt on the reliability of that acceptance.[237]The judge relied in his judgment (paragraph 628) on the 2000 guidance from the Law Society, to which we have referred at paragraph [133] above. In the absence of evidence from which the judge could properly conclude that Mr Meer had read the passages quoted, and if so how he had understood them, it seems to us that this was irrelevant to a case based on dishonesty, however incompetent it might show Mr Meer to be in the conduct of his practice. It is true that the judge went on at paragraph 629 to say that, even on the original Blue Card warnings, if they had been properly considered by him, Mr Meer could not have relied only on the fact that he had known Mr Kabwe for a long time as a basis for trusting him. Again, as noted at paragraph [231] above, we have to say that, in the absence of cross-examination of Mr Meer as to his actual understanding of the original Blue Card warnings, it was not open to the judge to proceed on the basis that Mr Meer did realise that, for example, what he was doing was inconsistent with the third of those original warnings.

The judge’s conclusion on this aspect of the case was expressed at paragraph 630 as follows:

“These are serious failures. They are in my view supportive of the other evidence set out above which shows that IM was dishonest. An honest solicitor would have had heeded the warnings looming large in respect of the large number of transactions over the years and would have realised almost as soon as he was requested to make the first transactions that matters required considerable further investigation.”
[239]We agree with the first sentence of that paragraph; Mr Meer’s conduct showed serious failings in terms of professional conduct. We do not agree that his misunderstanding of the original Blue Card warnings, and his failure to take on board the significance of them or of later versions of the same guidance, are supportive of a finding of dishonesty. While, therefore, there is much to criticise in what Mr Meer did, from the point of view of professional conduct, it adds nothing to the case for showing that Mr Meer was dishonest. To that extent we disagree with the judge’s observations at paragraph 630.[240]Having dealt with the subject of the Blue Card warnings, the judge proceeded to make a number of points, in paragraphs 631 to 639, which are of more general reference to Mr Meer’s honesty or otherwise. We have mentioned these already. The judge’s conclusion on the Zamtrop conspiracy[241]His conclusion as regards Mr Meer’s responsibility for payments attributable to the Zamtrop conspiracy is set out at paragraphs 587 to 589. Those paragraphs need to be seen in full:
“587. This is classic blind eye dishonesty. There are two possibilities. IM did not ask because he knew precisely what was going on namely that there was a conspiracy to defraud and he participated in it willingly. The other possibility is that he did not ask because he did not want to know the answer. 588. In my view it is not necessary to decide which of the two is the more likely scenario. I am quite satisfied however that no honest solicitor in his position would have done what he did namely nothing whatsoever beyond implementing the instructions without question. His conduct therefore was dishonest as soon as he failed to question the very first instructions to disburse funds. This grew and grew and of course it must be appreciated that he received at least $7,000,000 over the period of time. Not one direction to dispose of these funds was ever questioned by him. 589. I am therefore satisfied on this evidence alone that he provided dishonest assistance. However this conclusion is supported by other evidence which I shall set out below. He was not in my view a conspirator in the over arching conspiracy to defraud with XFC, FJT, FK and SC. He was however in a sub conspiracy to steal the monies that were routed through his client account. Once again I do not know whether he became actively a conspirator i.e. knew that there was a conspiracy and agreed to join it or whether he was aware of such material that if he participated in the activity he became a conspirator. It is not necessary for me to decide that potential difference. I am satisfied that he became at least a conspirator because he was aware that money was being improperly applied and chose not to question that activity. Further he facilitated the theft. To avoid becoming a conspirator he should have refused to act unless satisfied that the transactions had a genuine honest purpose. He failed so to act and was accordingly dishonest.”
[242]The reasoning in these paragraphs relies heavily on a comparison of Mr Meer’s conduct with that of the honest solicitor. It does not depend, to any extent, on an analysis of how matters in fact appeared to Mr Meer at any one or more of the different relevant stages of the history. The judge’s finding was that Mr Meer was liable for dishonest assistance, and for conspiracy, from the moment of the first relevant disbursement. He therefore held that, at the time of Mr Kabwe’s instructions to make that disbursement, Mr Meer was aware that this would amount to an improper application of the money, or at any rate that he had a clear suspicion that it would, and chose not to ask any question about it, in order not to be told the truth. That is not a finding which depends, or could depend, on the scale or continuity of the operation.[243]Before we discuss the judge’s findings on the Zamtrop conspiracy, we will deal with the BK conspiracy as well. Although the two were quite different in a number of relevant respects, it would not make sense to consider them entirely separately on these appeals.

The BK conspiracy

[244]We have described the BK conspiracy in outline, and have referred to the four payments into MCD’s client account which were derived from this conspiracy: see paragraph [76] above for the details of the payments. The two largest of these sums were paid into a Harptree ledger, and the other two into the general AFSL ledger. Two payments were made out of this money to Cave Malik, of $200,000 and $75,000, the latter being one of the payments in November 2002 (see paragraph [79] above).[245]The issues in relation to these receipts were whether Mr Meer knew that they were Government money, and if so whether, to the extent that he paid them away, he knew that they were misapplied.[246]The judge dealt with this aspect of the claim against Mr Meer at paragraphs 1108 to 1111 of his judgment. His reasoning is in paragraphs 1109 and 1110, as follows:
“1109. IM’s fatal difficulty in my view is his failure to question why Katumbi Betti was remitting these large amounts and why they could be disbursed on the instructions of FK. He never asked. 1110. For the reasons that I have set out in respect of the position against him under the Zamtrop conspiracy his failures are just as dishonest in this claim. He has therefore in my view dishonestly assisted FJT, XFC and SC in stealing Government monies. He has also participated in a lesser conspiracy which is the same as the conspiracy that I have found him liable under the Zamtrop claim.”
[247]It is understandable that, at the end of his extremely long judgment, the judge should have dealt with this aspect of the claim briefly. It is of much less financial significance than the Zamtrop conspiracy, in particular as regards Mr Meer and Mr Desai: the principal amount of the claim, after bringing recoveries into account, is $456,118 as against over $8.6 million for the Zamtrop liability.[248]However, the judge’s reasoning deals only with the question of Mr Meer’s awareness of misapplication of the funds, assuming them to be Government money. He made no finding as to whether, and if so on what basis, Mr Meer knew that these four payments were of money which did belong, or had belonged, to the Government. That issue did not arise for the Zamtrop payments, since Mr Meer admitted that he understood payments from the Zamtrop account to be of Government money, made under the Churchill Hotel arrangements. Absent a finding that Mr Meer knew or clearly suspected that they were of Government money, the judge’s finding that Mr Meer was liable in conspiracy and in dishonest assistance in respect of the BK payments cannot stand.[249]There was nothing on the face of the BK payments to show that they came from a Government source. Immediately, they did not come from a Government source, but from an account to which they had been paid by the Government for the credit of Mr Soriano, purportedly under the facility agreement.[250]The fact that they came into MCD’s client account by arrangement on the part of Mr Kabwe is not sufficient by itself to show that they were Government money, because that is also true of some $3 million of other money paid in during this period. Mr Sullivan did not rely on any feature of the payments themselves, before they reached MCD’s client account, as showing that they were of Government money. We will deal later with the question whether there is a basis on which it would be right to hold that Mr Meer did believe them to be of Government money.

Dishonesty: discussion

[251]The example of Mance J’s decision as regards Mr Folchi in Grupo Torras, upheld by the Court of Appeal, showed the judge that it could be legitimate to compare the conduct of the solicitor in question with that of the hypothetical honest solicitor. If a judge can be satisfied that the conduct of the party in question cannot be explained in a way that is consistent with honesty, then it is legitimate to conclude that the conduct was not honest. But as Mr Onslow submitted, when the judge said at paragraph 587 that there were only two possibilities, namely actual knowledge or Nelsonian knowledge, he did not allow for a third possibility, that of innocence through failure to suspect the dishonesty of Mr Kabwe and of Mr Chungu. Now, the judge may not have intended to set out at paragraph 587 the full range of possible situations, because he had already posed to himself the question whether Mr Meer was honest but stupid or incompetent (see paragraph 556: fool or knave). It seems likely that, by that stage in his judgment, the judge had come to the conclusion that Mr Meer was not stupid or foolish, and that it followed that he was dishonest. The judge was therefore setting out the two different varieties of dishonesty, either of which, as he said, was sufficient to establish liability.[252]Just as the judge placed reliance on the Grupo Torras case, as regards the way in which Mr Folchi was held liable, so Mr Onslow based a submission on the point on which the Court of Appeal allowed an appeal against Mance J’s order on behalf of one of the other defendants, Sheikh Khaled. The judge had rejected his evidence on the basis that his story was inherently improbable, not on the basis that his evidence had been destroyed by cross-examination. The Court of Appeal did not agree that the story was inherently improbable or far-fetched, though it was undoubtedly strange. The judge should have considered and evaluated the defendant’s possible or probable explanation against what in that case was the only other possible or probable explanation. Since the Court of Appeal disagreed with his assessment of the witness’ account, it had to do that exercise itself, which did not depend, in the particular circumstances, on how the witness had given evidence before the court. In order to uphold the judgment against him, the court had to be satisfied, on the balance of probability, bearing in mind that the charge was one of dishonesty, that his account was untrue, but they were not satisfied of that.[253]So, Mr Onslow submitted, in the present case the judge should have weighed in the balance Mr Meer’s innocent explanation, namely that, naïve or foolish as it might have been, he trusted Mr Kabwe and did not consider it necessary to query any of the disbursements, even those which were plainly for the personal advantage of Mr Kabwe or his family or, for example, Dr Chiluba, against the contrary explanation namely that, on a Nelsonian basis or otherwise, he knew that the money paid to his client account from the Zamtrop account was being stolen from the Zambian Government for the benefit of Dr Chiluba, Mr Chungu, Mr Kabwe and others. Unless satisfied on the balance of probabilities, bearing in mind the seriousness of the charge, that Mr Meer was dishonest, the claim against Mr Meer could not be upheld. In turn, he argued that there were serious errors in the judge’s assessment of the facts such as to vitiate the judge’s conclusion, and that this court could and should conduct the exercise on the correct basis. No party invited us to remit the case for retrial if we found that the judge’s reasoning was seriously flawed.[254]The judge did not set out in terms the reasoning which led him to conclude that Mr Meer was dishonest, and not merely foolish or incompetent but honest. It is possible to identify some important elements in the process that led him to that conclusion. One is that Mr Meer did not do what he ought to have done. That is apparent from the sequence of references to “caution” and similar words, particularly at paragraphs 566 to 569 which we have noted and discussed at paragraphs [178] and [181] above, but also elsewhere in the judgment. Another is the judge’s view that Mr Meer was duty bound to verify that payments to be made out of money derived from the Zamtrop account were being applied for proper ZSIS purposes. He rejected the contrary view at paragraph 564. Being of the view that it was necessary for Mr Meer to be satisfied that the payments which he was instructed to make were proper, he held that it was for Mr Meer to show that they were proper, and he said that this could not be shown of any of the payments, and that it would have been plain to any honest person that the payments were not being used for ZSIS purposes. His apparent belief, suggested by his references at paragraphs 545 and 596, that Mr Meer’s case was that he was acting for ZSIS in the secret operation, so that ZSIS was his client, may have supported him in that view. A further factor was Mr Meer’s willingness to mix funds derived from Zamtrop with other funds not emanating from the Government.[255]It seems to us that the judge was also influenced by his view that the payments for which Mr Meer was liable started with the payments out of the first credit to the client account, shortly after the Churchill Hotel meeting, on 30 November 1995.[256]In our judgment, the judge’s conclusion that Mr Meer was liable on the basis of dishonest assistance and of conspiracy is undermined by several misdirections and errors as regards the evidence, the contentions and in one respect also the law. The misdirection of law is as to the burden of proof in relation to the propriety of disbursements. As we have said at paragraph [147] above, where a defendant’s liability depends (as here) on showing that he knew that a disbursement was for an improper purpose, it is not for that party to disprove the impropriety, but for the Claimant to prove both the fact, and also the defendant’s knowledge, of the impropriety.[257]The judge’s decision about the first receipt into the client account, expressed in paragraph 573, cannot stand with the fact that Zambia did not allege that this receipt was of Government money. The judge may have been entitled to rely on the disbursements made at that stage, but he could not properly do so without having regard to the fact that these moneys were not Government money, and they had therefore to be treated as money which AFSL was entitled to direct Mr Meer to deal with, without regard to any involvement of ZSIS.[258]The judge was also in error in treating the second receipt as Government money, there being no objective indication that it was, and Zambia not alleging that it was.[259]Some criticism of Mr Meer in respect of his failure to tell Mr Desai about the Churchill Hotel meeting, either in advance or after the event, may have been merited (see paragraph [164] above), but the severity and terms of the judge’s observations at paragraphs 547 to 550 cannot be reconciled with his finding that Mr Meer was at that stage acting honestly, was not part of any conspiracy and, by necessary implication, was entitled to accept and act on what was put to him by Mr Chungu and Mr Kabwe. We have dealt with this at paragraph [179] above.[260]Some points relied on by Mr Onslow were less substantial in themselves, but support his contention that the judge’s assessment of Mr Meer’s evidence was not altogether fair or accurate. We have in mind here his comment that Mr Meer was wary of meeting Mr Chungu, and, more significantly, his statement that Mr Meer said repeatedly that he did not think it appropriate to question Mr Kabwe (see paragraphs [36] and [167] above).[261]As regards the disbursements, while some of them would have appeared plainly to be for the personal benefit of the Kabwe family, or for other individuals, it seems to us that the judge took inadequate account of the secrecy and the potential variety of secret service operations, as to which Mr Regis Phiri’s evidence was supportive of what Mr Meer said he assumed, in concluding that it would have been obvious to anyone that the payments were not for secret service commitments.[262]More fundamentally, however, it seems to us that the judge rejected without giving it serious thought the case advanced on behalf of Mr Meer, namely that the relevant money paid into his client account was held to the order of AFSL, and that it was for Mr Kabwe on behalf of AFSL (or, later, Harptree) to give him instructions as to how to deal with this money, and it was not expected of him that he should query any such instructions, the application of the money being a matter for agreement and resolution as necessary between Mr X F Chungu and Mr Kabwe, presumably in Lusaka where they were both based. The judge addressed what he saw as the two possible positions on behalf of Mr Meer at paragraph 562, but he did not in terms consider that which was advanced on Mr Meer’s behalf. It seems to us that he was diverted by Mr Meer’s answers in cross-examination (in many instances questioning by the judge), which were necessarily and avowedly speculative, as to possible bases on which AFSL might have been entitled to the money beneficially as against ZSIS. The judge referred at paragraph 563 to Mr Meer’s evidence in this respect falling apart under cross-examination; in the cross-examination referred to all the questions were asked by the judge (some are quoted in part above at paragraphs [109] and [125] above). We do not mean to suggest that the judge was not entitled to ask Mr Meer questions, and if he did then he was entitled to take into account Mr Meer’s answers. It does seem to us, however, that from time to time the judge, in his endeavour to understand the true purport of Mr Meer’s evidence, may have given the appearance that he was joining in the process of cross-examination.[263]The judge was of course entitled to have regard to the fact that Mr Meer was an experienced lawyer with an international practice. It was for him to assess whether he was intelligent. But it seems to us that in deciding, impliedly, that his failure to ask questions cannot have been attributable to a failure to realise what was going on, the judge should have taken account of a number of features of the evidence which suggested that Mr Meer was less knowledgeable and experienced than he may have seemed, or have thought himself to be. A significant element in this is his failure to recognise, in the course of cross-examination, a number of factors relevant to money-laundering (paragraph [232] above), and his apparent belief (not challenged as to the truth of the evidence) that “cash” in the third of the Blue Card factors meant notes and coin, not bank balances (paragraph [105] above). The judge might have considered these and rejected some or all of the answers as disingenuous, but he did not do so in terms, and it therefore does not appear that the judge gave thought to this point. The judge said at paragraph 565 that Mr Meer was not a young naïve person, but he does not seem to have considered the possibility that he was a middle-aged naïve person, at least in this respect.[264]It seems to us, in addition, that the judge failed to consider and apply properly the implications of his own finding that Mr Meer was acting honestly at the stage of the Churchill Hotel meeting. He did not enter into the Zamtrop conspiracy at that stage, nor any sub-conspiracy. The judge’s reason for making that finding was Mr Meer’s background of honesty and integrity. According to the judge’s finding, by 7 December 1995, when he was given the first instruction as to a relevant payment out of his client account, Mr Meer had not merely thrown caution to the wind (paragraph 567) but had come to know, or at least to have a clear suspicion, that the disbursements which Mr Kabwe instructed him to make were improper and showed that Mr Kabwe (together with Mr Chungu) was in the process of stealing money from Zambia. That would involve a dramatic and sudden change of position from honesty to dishonesty, which was unexplained. As the judge accepted, no motive for Mr Meer to act dishonestly was proved, and he had to proceed on the basis that there was no such motive. That being so, a sudden conversion of Mr Meer from his established background of honesty and integrity to a position of unmotivated dishonesty seems to defy probability.[265]The judge did consider the question of Mr Meer’s motive, and dealt with the principal points relevant to this. His comments at paragraph 551, which were prompted by a consideration of the motives for which professional people may act dishonestly, do not appear to be directed to Mr Meer, and are not justified by anything in the evidence as to Mr Meer. The fact that the judge made these comments suggests that he had them in mind when assessing the probability that Mr Meer was dishonest, despite there being no perceptible motive for him to do so. If he did, then it seems to us that this was not a legitimate consideration for him to take into account (see paragraph [176] above).[266]As we have said above (paragraph [217] and following) it seems to us that some, though by no means all, of the judge’s criticisms of Mr Meer in respect of his conduct in relation to the Harptree aspect of the history are unjustified. Equally, as noted at paragraph [222], we find that some of the judge’s comments as to what Mr Meer ought to have done after the publication of the Matrix of Plunder articles in the Zambian Press are not justified, though we agree that it is quite extraordinary that Mr Meer should have allowed the two payments out of his firm’s client account which Mr Kabwe asked him to make in November 2002, and we agree that Mr Meer’s evidence that he ceased to act for AFSL after the publication of those articles is suspect. We do not agree with all of the judge’s criticisms of Mr Meer’s affidavit made in order to comply with the order made by Mr Justice Pitchford (see paragraph [226] above).[267]As we have already shown, the judge relied heavily on the test of what an honest solicitor would have done, or, to put the test more accurately (as the judge did at some points), whether an honest solicitor could have done that which Mr Meer did, given the knowledge of the facts that he had. At some points, however, the judge used the benchmark of the honest and competent solicitor, for example at paragraph 586, which is an important passage, since it leads straight into the judge’s conclusion as to dishonesty at paragraphs 587 to 589. That hypothetical comparator is not appropriate, because it assumes that Mr Meer was competent. Of course Mr Meer would have wished to be thought competent, but there were many indications to the judge that, in relevant respects, he was not. It seems to us that the judge failed to give adequate consideration to the possibility that Mr Meer was honest but not competent, and was not in truth knowledgeable or experienced in relation to the sort of transaction with which he was faced, and in particular did not really understand what was involved in money-laundering.[268]Mr Sullivan showed us the guidance given by the House of Lords as to the proper attitude of a first appellate court to an attack on a judge’s findings of fact, in the speech of Lord Steyn in Smith New Court Ltd v Scrimgeour Vickers[1997] AC 254 at 274-5:
“The principle is well settled that where there has been no misdirection on an issue of fact by the trial judge the presumption is that his conclusion on issues of fact is correct. The Court of Appeal will only reverse the trial judge on an issue of fact when it is convinced that his view is wrong. In such a case, if the Court of Appeal is left in doubt as to the correctness of the conclusion it will not disturb it.”
[269]It seems to us that the judge’s finding that Mr Meer was dishonest is vitiated by the errors and misdirections to which we have referred, and cannot stand. Likewise, so far as the BK conspiracy is concerned, the judge did not make a finding at all on the first essential point (which did not arise as regards the Zamtrop conspiracy), namely whether Mr Meer knew or suspected that these receipts were of money stolen from the Government. It follows that his decision that Mr Meer was liable in respect of the BK conspiracy cannot stand, and this court has to consider whether the evidence justifies a finding of liability for this conspiracy as well as for the Zamtrop conspiracy.[270]Given that no party sought an order for a retrial, for obvious reasons, it is therefore necessary for this court to assess the evidence and to come to its own conclusion. Mr Sullivan stressed, understandably, the importance, above all in a fraud trial, of seeing the witnesses; the judge made the same point at paragraph 552. There are some respects in which the judge made a finding about Mr Meer’s conduct which is not affected by any of the errors or misdirections to which we have referred. Those should stand. But in other respects we must examine the transcript of Mr Meer’s evidence in the light of the documents and the submissions made, and come to our own conclusion on the various issues, and ultimately on the crucial question which the judge posed at paragraph 556: was Mr Meer a fool or a knave? Did he, at the stage of the first instruction to pay money out of the client account (or at some later stage), know or clearly suspect that what was happening was the stealing of Government money, or did he not?

The Zamtrop conspiracy: discussion

[271]We start with the major issue, that relating to the Zamtrop payments. The judge’s finding that Mr Meer was honest at the stage of the Churchill Hotel meeting, and did not join either the Zamtrop conspiracy or a sub-conspiracy at that stage, was not challenged by Zambia and must stand. It carries the acceptance that Mr Meer’s background was one of honesty and integrity.[272]One of the critical issues in the case is as to what Mr Meer understood to be the position as regards money paid to his client account from the Zamtrop account, in terms of how it was to be applied. Mr Sullivan’s submission is that he knew that it was ZSIS money which was to be applied only for ZSIS purposes, and he knew, from the nature of some of the payees, that at any rate some of the disbursements could not be for ZSIS purposes. Mr Sullivan submitted that the judge found as a fact that Mr Meer knew both these things, and that this finding was soundly based and should stand.[273]In our judgment these are among the findings made by the judge which are vitiated by his errors to which we have referred, and it is therefore necessary to start again from Mr Meer’s evidence, in particular his evidence about the Churchill Hotel meeting.[274]Mr Meer was asked at that meeting to assist AFSL, by dealing with the receipt and disbursement of money in connection with activities which AFSL was to undertake for ZSIS. He understood that the involvement of AFSL and of his firm had to do with the desire of a secret service for secrecy, a desire of which the judge had ample evidence. It was not proposed that he should do anything other than act on the instructions of AFSL, which was his client, and in effect of Mr Kabwe. Nor was there any practical method by which he could have checked on the propriety of any given payment; his only contact was with Mr Kabwe, and if he could not trust Mr Kabwe’s instructions themselves, he had no independent way of checking on them. He had no information as to the nature of the services to be undertaken by AFSL for ZSIS, nor as to the terms which would apply as between them.[275]In the course of his cross-examination, Mr Meer was drawn into speculation as to the basis on which AFSL might have become entitled to money, as against ZSIS, so as to be entitled to dispose of it for its own benefit. To some extent this had already been anticipated at the OSS interview. It is clear that his answers on this topic were speculation, and not based on knowledge or even information. Correctly, Mr Meer could and should have said that it was no business of his to enquire or even to think whether AFSL was giving him instructions in relation to money which it was entitled to free from any claim by ZSIS, or not. That was the essence of his account of the position, when he said, more than once, that he was not privy to the position as between ZSIS and AFSL: see paragraphs [120] and [137] above. His different versions of how AFSL might be entitled to money from ZSIS on one basis or another showed evident confusion and uncertainty, but it seems to us that this can properly be accounted for by the fact that, as he said, he did not know the position, and there was no reason why he should have known it.[276]As part of the context of what was done under the arrangements discussed at the Churchill Hotel meeting, it is relevant that Mr Meer said he was willing to help Zambia because he was grateful to that country for giving him the chance to start on his legal career, when he could not go back to South Africa. He also said that he would have been horrified at the idea that what he was doing involved stealing money from the country to which he was intending to assist: see paragraph [106] above. He was not cross-examined on that evidence.[277]The first payment into the MCD client account, at the end of November 1995, is not alleged by Zambia to have been of Government money. Accordingly, the disbursements out of it are strictly irrelevant to the claim, except as background. There is an issue as to whether Mr Meer believed it to be of Government money. If he did, then what he did in relation to those disbursements could be of relevance to the claim as regards what he did later. It is not in dispute that his conduct was consistent as regards the whole sequence of payments from 1995 to 2001, whether or not the particular disbursement was of Government money or of money which on any footing AFSL could dispose of as it chose. He asked no questions of Mr Kabwe as to the basis of any payments he was asked to make. He contended that the proposition put to him at the Churchill Hotel meeting, to which he agreed, did not require him to give any thought to that, and that it was not for him to do more than comply with whatever instructions Mr Kabwe gave him. It was for Mr X F Chungu and Mr Kabwe to agree as to what those payments should be.[278]Mr Meer did not tell Mr Desai about the meeting, before or afterwards. He can properly be criticised for that, because it undoubtedly involved the firm in providing a service to this client which it did not to any other client, namely of allowing the client account to be used as a bank account. He should have made his partner aware of this, but the fact that he did not does not reveal a guilty conscience, because the judge found that there was nothing for him to feel guilty about at that stage.[279]More fundamentally, he ought not to have agreed to provide the service, because it was plainly contrary to at least one of the Blue Card warnings. However, as regards that, Mr Meer said that he did not understand the warning to relate to bank balances, but rather to cash in a literal sense. We do not find that reading to be tenable but, as he was not cross-examined on the point, it has to be assumed that he honestly held that view. That is revealing as to his state of mind, and also as to his standard of competence and understanding in relation to the issue of money-laundering. He never accepted in cross-examination that what he was doing was providing a banking service. He said in evidence that he saw nothing wrong about it, and he failed to recognise that any feature of what was happening was indicative of money-laundering. In our judgment, surprising though this evidence is on the part of a solicitor with years of international experience, it does not appear, from the transcript, to be disingenuous or other than genuine. The judge did not deal with this aspect of his evidence in terms, so we do not have the benefit of his assessment of the credibility of those passages in the evidence.[280]The judge was clearly right to say that the course that Mr Meer set out upon required caution, of which Mr Meer seemed to be wholly unaware, and that Mr Meer did not apply proper professional standards of caution in relation to the process. That is not sufficient to establish liability, and of itself might point away from dishonesty and towards incompetence. Mr Meer’s evidence about the Blue Card warnings and some of the other issues relevant to money-laundering itself suggests to us that he was inexperienced in the relevant area, and naïve or foolish or both.[281]The other main features of his conduct which the judge found damning was the sheer scale of the payments through his account, the fact that there was, with almost no exception, no underlying legal work, and the nature of some of the payments which the judge said were plainly not for the benefit of ZSIS. To take the first point, since the judge held that Mr Meer was liable from the first payment, his decision could not proceed on the basis that Mr Meer knew of the dishonesty of the exercise because of the large number and volume of the relevant payments. In order to be found liable on that basis, Mr Meer had to have realised what was going on from the very start of the instructions, although he did not realise it at the time of the Churchill Hotel meeting.[282]Mr Sullivan submitted that Mr Meer should be found to have been aware of the dishonesty of the exercise from the start. The difficulty in that argument is the suddenness of the transformation which it postulates in Mr Meer’s state of mind. At the Churchill Hotel meeting, he acted honestly and took at face value the proposition put to him. He did so because he was grateful to Zambia and wished to help that country. On this hypothesis, shortly thereafter, as soon as he was given the first instruction to pay money out, he knew or clearly suspected that Mr X F Chungu and Mr Kabwe were stealing money from Zambia, and yet he lent his assistance, although by so doing he was betraying Zambia and demonstrating the very opposite of gratitude to the country.[283]If there were a demonstrable motive for such a volte-face, particularly if it were a financial motive, then this might be understandable and plausible. But no motive was shown. Zambia sought to prove a financial motive but the judge rightly rejected that. The judge’s speculation at paragraph 561 has no basis in relation to Mr Meer and his comment at paragraph 631 recognises that there was no basis for any other suggestion of a motive. Moreover Mr Meer would have been putting in jeopardy a high reputation gained, in particular, by his acting on behalf of Mr Mandela, and doing so for no reason at all. There is, in our judgment, no plausible answer to the question which the judge posed at paragraph 560, and the judge did not propose one:
“Why should such an experienced solicitor at the pinnacle of his career become involved in a dishonest conspiracy with no apparent financial benefit accruing to him?”
The word “apparent” should be disregarded since it suggests there may be a financial benefit which is not apparent; there is no evidence of any financial benefit, and the possibility of such a benefit must therefore be excluded from consideration.[284]Of course, sometimes people do things for which no motive can be identified, but it is at least a very important question in a case of this kind, as part of the balancing of probabilities.[285]Given the importance attached by both parties to the course of events as regards the first two receipts into the client account, we must deal with this part of the history, doing so on the basis that they were not Government money, and that there was no basis for saying that Mr Meer could have thought that the second of them was Government money. The position could be different as regards the first payment. We have referred at paragraphs [187] and [188] above to the relevant evidence. In the light of that evidence we think it right to take the judge’s comment “and he knew it” as a rejection of Mr Meer’s denial in cross-examination that he understood this $250,000 to be Government money received under the Churchill Hotel arrangements, and we accept the consequent finding that he did think that he was dealing with Government money at that stage.[286]On that footing, Mr Sullivan is entitled to rely on what Mr Meer did with the instructions for disbursements out of the account at that stage, in support of his contention that Mr Meer was guilty of dishonest assistance. Moreover, since the first payment out of the client account for which Mr Meer is sought to be made liable did not occur until the end of May 1996, Mr Sullivan is also entitled to submit that, in judging Mr Meer’s state of mind at that moment, what had happened in the meantime, and its cumulative effect, and the fact of mixing the first payment (believed to be of Government money) and the second (not so believed) in the same ledger, are to be taken into account.[287]During the period from the first receipt on 30 November 1995 to the first Zamtrop payment on 21 May 1996, there were 18 payments out of the relevant ledger, 2535/1. We have set out the details of these at paragraphs [50], [52] and [54] to [56] above. In each case Mr Meer acted in exactly the same way as he did with instructions for payment out of Mr Kabwe’s personal sterling ledger, 2535/2, namely by implementing Mr Kabwe’s instructions without question. As he received instructions thereafter to make payments out of funds which had derived from Zamtrop payments, he proceeded in the same way, all the way through from 1996 to June 2002.[288]The critical question, therefore, is whether, in so doing, he acted in blithe or blinkered ignorance and innocence, taking the instructions as no more than Mr Kabwe was entitled to tell him to do on behalf of AFSL, or whether he knew, or at least clearly suspected, that by requiring the money to be paid out in the given way, Mr Kabwe was, in effect, stealing Zambian Government money and applying it for his own or other private benefit.[289]The judge’s view that he was aware of the theft was based, above all, on his assessment that anything else was simply not possible, and that even an inexperienced lawyer, let alone one as experienced and intelligent as he considered Mr Meer to be, must have realised what was going on (see paragraph 584 of the judgment, quoted at paragraph [203] above).[290]Where do the probabilities lie on this? On the one hand, large sums of money were passing through Mr Meer’s client account, much of it emanating from the Zambian Government and, according to Mr Meer’s instructions, to be applied in connection with activities undertaken by AFSL on behalf of ZSIS. Mr Meer knew nothing about many or most of the payees, but he did know that some payments were either to Mr Kabwe himself or to or for the benefit of his family. His client account was being used as, in effect, a bank. That was not a proper thing for Mr Meer to have allowed. It conflicted plainly with the Blue Card warnings and, to anyone with half an idea about money-laundering, it would have sounded warning bells of the loudest kind.[291]A few of the instructions for payments gave rise to particular issues which could be taken to indicate that Mr Meer’s state of mind was other than innocent. We have in mind the payment of $64,450 to Daewoo in South Africa on behalf of Mr Kabwe in November 1997, which was paid out of the AFSL ledger because there was not enough money on Mr Kabwe’s personal ledger to cover the payment: see paragraph [66] above. Another is the instruction in 1998 which referred to “various client affairs handled through” MCD when there were none: see paragraph [67] above. The two payments made in November 2002 also call for an explanation, as to which Mr Meer’s evidence was far from impressive.[292]On the other hand, Mr Meer was a man of integrity and honesty, at least up to and including the time of the Churchill Hotel meeting. He did not enter into a conspiracy at that stage, nor did he perceive anything at that time which put him on his guard. The judge’s finding on that carries with it a necessary implication that he was entitled to take the proposition at face value, and that he did so. He had no motive for assisting the fraud that was being practised by Mr Kabwe and Mr X F Chungu on Zambia. Not only did he not get anything out of it, tangible or intangible, beyond a modest amount of professional fees altogether insufficient as a motive for dishonesty, but he would have jeopardised a successful international career, and the notable status of being the trusted lawyer of one of the most prominent and respected of all Africans at the time, Mr Mandela. Moreover, it would have been flatly inconsistent with the motivation which he said had led him to agree to provide the help that was sought of him at the Churchill Hotel meeting, namely to help Zambia out of gratitude for the opportunities that the country had given him earlier in his career.[293]How can these conflicting considerations be reconciled? It seems to us that the answer lies in the fact that Mr Meer was much less knowledgeable and experienced, in relevant matters, than he may have thought himself to be, or held himself out as being. This is supported, in particular, by his incomprehensible interpretation, honestly held, of the third Blue Card point as relating only to cash, in the sense of notes and coin, by his inability to recognise that he was providing in effect a banking service to AFSL, and by his failure to understand a number of characteristics of typical money-laundering situations when put to him in cross-examination.[294]The question, was he dishonest or not, is to be answered in favour of honesty unless fraud is proved on the balance of probabilities, bearing in mind the need for cogent evidence for an allegation as serious as fraud. In our judgment, on the material that was before the judge, the more probable explanation for Mr Meer’s conduct is that he was honest, albeit foolish, sometimes very foolish, and far from competent in his understanding, as well as in his application and observance, of relevant professional duties, above all the need to comply with the warnings about money-laundering. We agree with the judge that Mr Meer should have acted differently, more cautiously and with a more suspicious mind. We do not agree with him that Mr Meer’s failure to do so shows that he knew or suspected what was going on, and chose not to ask questions in order not to be told the truth.[295]It seems to us that the judge identified the position accurately in a passage during his questioning of Mr Meer, part of the exchange quoted at paragraph [115] above, when he put this to Mr Meer:
“Isn’t the reality, Mr Meer, you did not look at it any way? You just had Mr Kabwe who you knew and Mr Chungu who you knew was the ZSIS man and that was enough for you? You did nothing else. What they said went. Isn’t that the position?”
[296]Mr Meer was dealing with Mr Kabwe, whom he knew of old and believed to be honest and respectable, and with Mr Chungu, who was one of the most senior representatives of the Zambian Government. ZSIS, through Mr Chungu, appeared to place trust in Mr Kabwe, and Mr Meer believed that he had no reason to doubt that trust, or to doubt the instructions given to him by Mr Kabwe over time under the arrangements set up at that meeting. He did not recognise telltale signs of money-laundering, nor did he realise that what he was doing was contrary to the Blue Card warnings. He did not ask Mr Kabwe any questions, but the reason for that was that he did not ask himself any questions either. It did not occur to him that anything was or might be wrong or suspicious. By the time of the instructions in 1997 and 1998 which we have mentioned as possibly calling for an explanation, it seems likely that he was dealing with Mr Kabwe’s instructions as a routine matter, which called for nothing other than administrative handling. The payments out in 2002, and his suspect evidence about having ceased to act for AFSL in 2002, are not sufficient by themselves to show that he had been dishonest in 1995 or 1996, at the start of the process.[297]To revert to the analogy which influenced the judge, the finding that Mr Folchi was dishonest in the Grupo Torras case, upheld by the Court of Appeal as quoted at paragraph [155] above, the crucial distinction is that in that case the judge assessed the person in question as a highly intelligent business lawyer, and there was clearly every justification for that. He had been actively and extensively involved as a lawyer in several operations which the judge had to examine in that case. In the present case, by contrast, however much Mr Meer might have liked to be thought to be a highly intelligent business lawyer, the judge’s assessment of him as “clearly intelligent and very experienced” is not, in our judgment, borne out or justified, in relation to the subject matter of the proceedings, by the evidence that Mr Meer gave at the trial. It is therefore plausible, as it was not in the case of Mr Folchi, that Mr Meer was unquestioning and uncomprehending.[298]On that footing, whatever view one might take of his professional competence, he was not dishonest, he did not know of or suspect dishonesty on the part of Mr X F Chungu or Mr Kabwe, and he should not be held liable for dishonest assistance or for conspiracy.

The BK conspiracy: discussion

[299]In those circumstances, there is no basis for holding him liable in respect of the BK conspiracy either. As the judge said, Mr Meer behaved in exactly the same way as regards the four BK payments as he did with the Zamtrop payments. For the reasons we have given, he did not know or suspect dishonesty in relation to any of the relevant payments.[300]It is not, therefore, necessary to address the prior question whether he knew or suspected that the BK payments were of Government money, or rather, of money already stolen from the Government.

Other matters

[301]If Mr Meer was not liable in dishonest assistance or in conspiracy then the relatively minor issues as regards limitation and credit for recoveries do not arise, and there was no liability to be attributed vicariously to Mr Desai. The points were fully argued before us (though the limitation point was argued on a narrower basis than before the judge, because of the agreed effect of an intervening decision of this court), but because they are of no importance beyond this case we need not lengthen this judgment still further by saying anything more than that, if they had arisen for decision, we would have dismissed Mr Meer’s appeal on the two minor points, and we would also have dismissed Mr Desai’s appeal. In our judgment the judge’s decision was right on those points.[302]In the circumstances Mr Desai’s costs appeal does not arise and we say no more about it either.[303]For the reasons given, we allow Mr Meer’s appeal against the judge’s finding that he was liable to Zambia in conspiracy and on the basis of dishonest assistance. We will set aside the judge’s orders against Mr Meer and therefore also against Mr Desai and the firm, in both his orders dated 4 May 2007 and 29 June 2007, and we dismiss the claim against Mr Meer, Mr Desai and the firm. Appendix The major payments into the MCD client account Date

Cited in 15 later judgments

and 6 more of the most senior