Adelaide Partnerships Ltd & Ors v Danison & Ors [2011] EWHC 4090 (Ch)

[2011] EWHC 4090 (Ch)Case No HCO9CO2897
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice,Date Thursday, 24 th February, 2011
The Strand,
London WC2A 2LL
Before
HIS HONOUR JUDGE COOKE(Sitting as a Judge of the High Court)
Between
ADELAIDE PARTNERSHIPS LIMITED & OTHERSClaimantDANISON & OTHERSDefendant
Digital Transcript of Wordwave International, a Merrill Communications Company165 Fleet Street, 8th Floor, London, EC4A 2DYTel No: 020 7422 6131 Fax No: 020 7422 6134Web: www.merrillcorp.com/mls Email: mlstape@merrillcorp.com(Official Shorthand Writers to the Court)
MR J MATHER (instructed by Magarth & Co) appeared for Claimants.MR M FLAVIN (instructed by Balsara & Co) appeared for 5 th Defendant.Mr Holden appeared as McKenzie friend for 7 th Defendant.
JudgmentTHE JUDGE:
[1]This trial concerns issues of liability as accessories of the fifth defendant, Mrs Danison, and the seventh defendant, Mr Herman Horowitz, in relation to a fraud perpetrated principally by the first defendant, Mr Eric Fitzpatrick Danison (the husband of Mrs Danison and known as Patrick). Because the parties are here, and Mr Danison at least is here to listen to this judgment, which will take me quite a while to read out, I think it is right that I should state the conclusion to start with, followed by the reasons.[2]That conclusion will be that the dishonest assistance claim is made out against Mrs Danison and that she should be ordered to compensate the claimants in respect of the monies paid into the Isabella account (as it has been referred to) and those that went via Marvel Pride into her Spanish account, but that the claims against the seventh defendant, Mr Horowitz, are not made out.[3]The fraud of Mr Danison was what is referred to as an “advance fee fraud”. Mr Danison was behind a company called Amkel Holdings SA, incorporated in Panama, purportedly trading as an arranger of finance and manager of investments. Between September 2008 and January 2009 the claimants in this action paid a total of $16.5 million into two accounts controlled by Mr Danison in Switzerland. The first one was at Bank Julius Bär in Geneva. It was in the name of the third defendant, Bluebird Media SA, another Panama corporation, and that account received $16,454,000 (the “Bluebird account”). When that account was opened, the Panama directors of Bluebird Media made a declaration that the sixth defendant, Isabella Danison (Mr Danison’s daughter), was the beneficial owner of the shares in Bluebird Media SA, and they signed an authority authorising Mr Danison and/or Isabella Danison to sign any instruction to the bank in relation to the Bluebird account. There was also a declaration that Miss Danison was the beneficial owner of the assets in the account. The second account, which is referred to as the GRA account, was at a different bank in Switzerland, Banque Pictet & Cie, in the name of the fourth defendant, Goldman Rothschild Assets Incorporated. Nothing is known of that company, as to which jurisdiction it is incorporated in, or who its officers were, or what Mr Danison’s connection with it was, although such a connection is assumed. Despite the fact that it has the names Goldman and Rothschild in the title, I think it is safe to say that it had no connection with the legitimate Goldman Sachs or Rothschild banking businesses. That account received a total of $56,000.[4]The basis of the fraud, as pleaded, was that representations were made to the claimants that, on payment of the amounts that were received from them, a substantial security would be in some way allocated to them. It was indicated that the value of that security would be up to 20 times the value of the amount paid by them, and that that security, in turn, would be used as collateral for trading in other securities referred to as “medium term notes”. Those were said to be securities issued by banks and traded by authorised traders, including Amkel and its various subsidiaries, and the clients were told that massive profits would be earned. There is mention of sums of 15% to 20% return per month. It was said that Bluebird and GRA were subsidiaries of Amkel authorised to carry out this trading. The basis of the claim, and I think it is safe to say that this is correct, is that the whole scheme was entirely fictitious, there was no such system of trading, there were no securities to be allocated to these clients, there were no returns to be made, and there was no genuine trading being carried on by any of these companies.[5]In fact, the clients were asked to pay their money not to Amkel, although supposedly Amkel was organising the trading, but, for the most part, into the two accounts that I have referred to (the Bluebird account and the GRA account). What then happened to the funds in the Bluebird account, at least, is that the majority of them were quickly transferred into a second account, also at Bank Julius Bär in Geneva, in the name of Isabella Danison (the “Isabella account”). There were, it appears, sub accounts in different currencies – one in euros, one in sterling and one in US dollars. Mrs Danison had full authority to sign instructions to the bank under a power of attorney which was executed in her favour by Isabella Danison. Mr Danison was not a signatory, nor named in any of the documents relating to that account as having any connection with it.[6]Certain other amounts paid by the claimants in this action and other people who appear to be victims of Mr Danison’s fraud were separately paid to an account in the United Kingdom in the name of a company called Marvel Pride Limited (“MPL”). Those payments were made by arrangement between Mr Danison and Mr Horowitz (the seventh defendant). Mr Horowitz’s evidence is that he is an Orthodox Jew. He describes his business as cheque cashing, money changing, transmission and lending. He operates (amongst other ways, it appears) through MPL, although that is not his own company. It is controlled by a Mr Goldman. Marvel Pride has an account at HSBC Bank. Mr Goldman allows payments into and out of that account on instructions given to agents such as Mr Horowitz and relayed by those agents to Mr Goldman. Most of the clients, at least most of Mr Horowitz’s clients, he said, were from the Orthodox Jewish community in a small area of North London. Most were personally known to Mr Horowitz, and it is said that the main advantage of dealing through Marvel Pride in this way was the convenience of those clients who could contact Mr Horowitz and, through him, Mr Goldman. At any hour, day or night, they could obtain cash from Mr Horowitz, which would be accounted for through the MPL account, effectively operating a number of sub accounts for individual clients within the MPL account. In some ways what Mr Horowitz was doing for these clients was akin to a private bank function. The claim against Mr Horowitz is for the amounts paid directly into the MPL account of $250,000 and £155,000. (The amount stated in the particulars of claim is $282,000, but it is made clear now that only $250,000 is claimed.)[7]There were other amounts paid into the Marvel Pride account either from the Bluebird account or from other individuals or businesses. There is no evidence as to who those people were, but I think it is a reasonable assumption that they were also victims of Mr Danison’s frauds. Once the money was in the Marvel Pride account, Mr Horowitz, on Mr Danison’s instructions, made various transfers and payments from that account to other accounts in the name of Mr Danison, to Mrs Danison’s account in Spain (to which I will refer in a moment), and also payments to Isabella Danison and amounts of cash given to Mr Danison.[8]It is relevant also to say that there are other claims brought by Mr Gomez against Mr Danison and Mrs Danison. Mr Gomez’s claim is on the basis that he paid amounts totalling €1.1 million into an account of Mr Danison at Caixa Catalunya, a bank incorporated in Barcelona, but into its Marbella branch, having been induced to do so by a similar fraud. Those amounts were transferred from Mr Danison’s account at Caixa Catalunya in February and April 2008 to an account at the same bank in the name of Mrs Danison. From there, the evidence shows that in October 2008 some £700,000 was transferred to a third account in the name of Mr Danison at Credit Suisse in Switzerland. Mr Gomez brought a claim against Mr Danison in October 2008 and obtained a worldwide freezing order in respect of all his assets. There was an order that Mr Danison should disclose his assets worldwide, but he did not comply with that order, and some months later in June 2009 he was sentenced to 15 months’ imprisonment for contempt of court in respect of that refusal. I think it is reasonable to infer from that episode that Mr Danison’s intention throughout was to keep the location of the proceeds that he had obtained by fraud from Mr Gomez secret.[9]Mr Danison was arrested in connection with the matters that this claim is concerned with, and I suspect others, in March 2009. Criminal restraint orders were made against Mr Danison, Mrs Danison and Isabella Danison on 3rd June 2009, and immediately after that a search took place at Mrs Danison’s house on 11th June. She and Isabella were arrested on that day and interviewed in relation to offences of money laundering. All three of the Danisons were charged in July 2009. That led to a trial of Mr Danison in July 2010 at which he pleaded guilty and was sentenced to 12 years for fraud in respect of the matters the subject of this claim and the Gomez claim, and others as I understand it. I am told that the charges of money laundering against Mrs Danison and Isabella have been dropped.[10]Mr Danison and the companies he controlled did not defend this claim, and a default judgment was entered against them. Since then, there have been various orders made on the basis of tracing claims, declaring that the claimants are entitled to a proprietary interest in the Bluebird account, the Isabella account and Mrs Danison’s Spanish and Credit Suisse accounts. Not all of those funds have yet been recovered.[11]Isabella Danison is still formally a party to this claim, but the action against her has been stayed, and there has been no application to lift the stay before this hearing.[12]Against Mrs Danison a personal claim is pursued on two heads only, although more were mentioned in the particulars of claim. These were liability for dishonest assistance in Mr Danison’s frauds and knowing receipt in respect of the monies paid to the Isabella account and those that were paid subsequently to her Spanish account. Her defence was summarised very well in her counsel Mr Flavin’s skeleton argument as follows. Referring to both the fifth and sixth defendants, “Fundamentally their case is that they knew nothing of any frauds, that they believed that Patrick Danison was then a legitimate businessman of very substantial means seeking to provide for his daughter and to a lesser extent his wife, from his own resources, that they have done nothing with the intent of harming [the claimants] (or anyone) and did not even know of [the claimants’] existence at the material time, they have done nothing objectively dishonest, and the state of their knowledge was insufficient for their consciences to be affected so as to give rise to personal liability.”[13]The claimants’ position in relation to Mrs Danison is that she must have known that the monies that flowed into the Isabella account and her account were dishonestly obtained, or, at the minimum, she turned a blind eye to matters obviously raising suspicion of the possibility of dishonesty. On that basis, she herself acted dishonestly, and that is a sufficient degree of knowledge to satisfy both of the heads of the claim against her.[14]As for the test to be considered, I was referred to various authorities. I think it is sufficiently set out in the most recent authority from the Privy Council in Barlow Clowes v Eurotrust International Limited [2006] 1 WLR 1476 at 1479, summarised by Lord Hoffmann in paragraph 10:
“The judge stated the law in terms largely derived from the advice of the Board given by Lord Nicholls of Birkenhead in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378. In summary, she said that liability for dishonest assistance requires a dishonest state of mind on the part of the person who assists in a breach of trust. Such a state of mind may consist in knowledge that the transaction is one in which he cannot honestly participate (for example, a misappropriation of other people's money), or it may consist in suspicion combined with a conscious decision not to make inquiries which might result in knowledge: see Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd [2003] 1 AC 469. Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a defendant's mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards. The Court of Appeal held this to be a correct statement of the law and their Lordships agree.”
[15]There has been a lot of authority on the elements of the required state of mind in relation to dishonest assistance, but it is sufficient, I think, if I say that that statement of the law was approved as representing the state of the English law by the Court of Appeal in Abou-Rahmah v Abacha[2006] EWCA Civ 1492 and both those authorities were subsequently cited as confirming the state of English law by the Court of Appeal in Starglade Properties v Nash [2010] EWCA Civ 1314. The question, therefore, is: by those standards do the claimants establish that the defendant’s state of knowledge was sufficient to make her acts dishonest? The claimants, of course, say that this is the case, based on Mrs Danison’s knowledge of Mr Danison’s past and her involvement in the various transactions that he undertook.[16]The test for knowing receipt is slightly different. It is agreed that that is correctly referred to by Mr Flavin in his skeleton argument in the passage he cites from BCCI Overseas Limited v Akindele [2001] Ch 437 at 455:
“…just as there is now a single test of dishonesty for knowing assistance, so ought there to be a single test of knowledge for knowing receipt. The recipient's state of knowledge must be such as to make it unconscionable for him to retain the benefit of the receipt.”
There are also issues which I will need to deal with as to whether what Mrs Danison did amounted to assistance for the purposes of dishonest assistance, or receipt for the purposes of a knowing receipt claim.[17]Since the claimants rely substantially on the history of Mr Danison and his relationship with Mrs Danison, I think it is appropriate if I go through that in a relatively abbreviated form. Mr and Mrs Danison were married in 1985. Isabella was born in 1988. Mr Danison in 1996 was sentenced to 4 years in prison at the Central Criminal Court on charges of obtaining a valuable security by deception. He served 2 years of that sentence, and following it a criminal confiscation order was made, as a result of which Mr and Mrs Danison’s matrimonial home was confiscated and sold. Mrs Danison’s evidence was that she had no knowledge of his wrongdoing until he pleaded guilty in the course of that trial, and that even then she was only told the bare bones of the allegations against him. She said that she understood it to be something to do with property and contracts not being fulfilled. At a later point in her evidence she mentioned that it may be to do with mortgages. I shall come back to that in due course.[18]Mr Danison was released in 1998. He and Mrs Danison moved from London, when they had to leave the house that was taken under the confiscation order, and bought a small cottage in Suffolk, initially in Mr Danison’s name but transferred in 2000 into Mrs Danison’s name. She remained living there throughout. Mrs Danison’s evidence was that she and Mr Danison separated on a relatively amicable basis in September 2001. Thereafter, according to her witness evidence, she had little contact with him. He moved to London and made occasional visits to her and Isabella in Suffolk. She said that he seemed to be starting afresh and rebuilding his business, and to be successful in doing that. She had little information about what he was involved in. At the end of 2003 contact with him ceased almost entirely when he began a relationship with a Dr Valjit Dada, which produced one son. Mrs Danison’s evidence was that he began living a very luxurious lifestyle with Dr Dada, involving international travel, expensive clothes, staying in expensive hotels, and his driving a Ferrari and a Porsche. That relationship, she said, ended acrimoniously at the end of 2005.[19]Isabella Danison unfortunately suffers from obsessive compulsive disorder, and that illness was very severe in the period between 2003 and 2005, coinciding, it would seem, with Mr Danison’s relationship with Dr Dada. In her witness statement, Mrs Danison said that in 2006 she and Mr Danison began to rebuild their relationship. They were not living permanently together as a couple, but he became a more regular visitor to Suffolk, staying weekends and on other occasions with her. They did things as a couple, went to events, walked and socialised, and went on holiday together in 2006, when Isabella’s OCD had subsided to some extent.[20]In December 2006 a criminal restraint order was made against Mr Danison. A copy of that restraint order is in the bundle. It appears that it must have related to further criminal proceedings in the Birmingham Crown Court against Mr Danison at about that time. I do not, however, unfortunately it seems to me, have any further detail of those proceedings or what the result of them was. The restraint order names three companies in addition to Mr Danison. It does not name or refer to Mrs Danison, and there is no evidence that she was served with it. Her evidence is that she had no knowledge of it whatsoever.[21]In June 2007 Mr Danison was made the subject of a disqualification order under the Company Directors Disqualification Act for a period of 15 years. That is the maximum period of disqualification, and so it is to be inferred that the circumstances were regarded as extremely serious. The order states that it was made by Birmingham Crown Court, but rather oddly states that it was made under section 6 of that Act, which relates to unfit conduct, rather than section 2 of that Act, which relates to a conviction. The disqualification order refers to the same three companies as mentioned in the criminal restraint order and, in addition, a company Amkel Holdings SA, as companies in respect of which the relevant unfit conduct occurred. Mrs Danison’s evidence is that she had no knowledge of the disqualification order at that time, or of any criminal proceedings going on in Birmingham at that time.[22]In June 2007 Mrs Danison opened the Credit Suisse account that I referred to. Various amounts were paid into that account very quickly by what appear to be clients or, more accurately I suspect, victims of Mr Danison. In October of that year the present company, Amkel Holdings SA, was incorporated in Panama. This seems rather odd and it has not been explained or even explored how it came to be that a company with the same name was stated to have existed in June 2007 when the disqualification order was made.[23]On 15th November 2007, according to the documents produced, Mrs Danison’s account at Caixa Catalunya was opened, being initially an account denominated in euro. Mrs Danison said she had no knowledge of the opening of the account on that day. If she is right on that, Mr Danison must have been able to open that account without her presence. There has been no explanation offered as to how, but one must assume that he was at least able to present documents to the bank, including identification documents in Mrs Danison’s name, even if he was able to explain away the fact that she was not present personally. In April 2008, however, Mrs Danison travelled to Marbella with Mr Danison, met a contact of his called Mr McCook, and, as she thought, opened for the first time an account in her name at Caixa Catalunya. The documents show that that is a sterling based account, and it appears to be associated with the euro account which was already open. It appears from the bank statements that have been produced that that account was opened in that same month, on 17th April 2008. Mrs Danison’s evidence was that the intention in opening that account was to assist her in providing some financial security for her and, in particular, in connection with a plan that she had at that time to relocate to Spain, and also to assist Isabella, who at that time was at university but considering having a gap year in Spain. She was aware that Mr Danison caused money to be paid into that account, but said that she regarded it as a straightforward gift from him to her as part of rebuilding a relationship with her. She had no reason, she said, to think that it was not from his own resources. In fact the funds paid into that account initially substantially consisted of the €1.1 million paid by Mr Gomez as a result of the fraud on him. Once that money was in the account there were various currency conversions and short term deposits made. Mrs Danison said that she gave no instructions for such deposits and saw no statements on the account, save that she accepts that she did see some statements recording the fact of the deposits, and possibly the return of the funds from those deposits on their maturity.[24]A few days later, on 23rd April 2008, the Bluebird account was opened in Zurich. There is no evidence that Mrs Danison was present on that occasion, but Mr Danison, it appears, must have gone virtually straight to Zurich from Spain – so straight from opening the Spanish account to opening the Bluebird account. On the opening of that account various documents were presented to the bank signed by the Panamanian directors of Bluebird Media SA dated 2nd November 2007, and so it would appear that those documents must have been requested from the directors in Panama shortly after the incorporation of the company. They name Isabella as the beneficial owner of the account and state that she and Mr Danison are to be authorised signatories on the account. It is presumed that those documents were sent to Panama for signature by those directors. The particular information with Isabella’s name, for instance, is completed in a different hand from the director’s signature. There is no evidence as to whether that was filled in before or after the documents were signed by the directors in Panama. There was also on the bank’s file a certificate dated 6th August 2008 signed by the Panama directors that Isabella Danison is the holder of all the shares and the economic beneficiary of Bluebird Media SA, and a minute authorising the issue of one bearer share. A bearer share certificate appears to have been produced and possibly deposited at Bank Julius Bär. It is possible that there may have been a delay in operating that account after the documents were apparently submitted in April 2008, because there is a note verifying the signature of the Panama directors with a stamp dated 6th August 2008, and it appears that the first credit on the account was made in June of that year. So it may be that the bank was presented with these documents and then sought some verification from Panama before allowing the account to undertake any substantial transactions. Whatever happened, it is apparent that very quickly thereafter substantial amounts were paid into that account, the statements showing that by the end of June 2008 $2.5 million and £1 million had been paid in.[25]In or about July 2008 Isabella Danison met Mr Danison and a Mr Fowler, an official of Bank Julius Bär in London. She said in her witness statement that this may have been the first meeting in relation to opening an account for her, which she refers to as an account “for me to put money in for my future”. She also said in evidence that she recalled another meeting with the bank’s officials. She was unsure of the order of events as between the two of them. It seems likely that at one of those meetings she will have signed a specimen signature form in relation to the Bluebird account, being the form that was presented to the bank apparently in April. She remembered that she was told by Mr Danison that he intended to set up a company for her, and she was asked to suggest a name for it and she suggested Bluebird. So it would appear that that would have taken place at least some time before November 2007, by which time Bluebird had been incorporated.[26]Moving on in time, in August 2008 Mr Danison, Mrs Danison and Isabella all visited Geneva, went to the office of Bank Julius Bär, and there signed all the documents necessary to open the Isabella account. Isabella signed all of those documents herself, including a power of attorney giving full authority to Mrs Danison to give instructions and act in relation to the account. They both say that at that meeting Mr Danison gave all the instructions to the bank officials and had the majority of the conversation with them, little of which they understood, because it was rapid fire business talk. He, however, was not named in any of the documents and has no apparent connection with that account. The bank’s record in relation to the account records contact details for Mrs Danison and Isabella, but contains notes that Isabella’s contact is for use in emergency only, and there is a rather cryptic reference “Be very discreet”. At the same time, Isabella signed an instruction which appears to have been handwritten at the meeting and provided for her to sign (volume 3 page 50). It is headed “Bluebird Media SA”, and so is clearly an instruction given on that account, which she had authority to do as a signatory. It says:
“As soon as my personal account [number given] is opened, please transfer GBP 1 mio into it and place it in a 3 months deposit to be renewed automatically until further notice.”
There is then the date and her signature. The reference to £1 million is written in a slightly shortened form as “GBP 1 mio”. I think it is sufficiently plain that that refers to an amount of £1 million, although Isabella said that she did not recall that that was said at the time.[27]In September and October of the same year payments from the claimants in this action began to be made into the Bluebird account. Thereupon various payment instructions were sent to the bank by Mr Danison, presumably by email. Some required external payments to be made, but for the most part his instructions were to transfer the funds received into the Isabella account. It is not apparent from the documents that Mrs Danison had any involvement with those instructions. On payment into the Isabella account, however, there were a series of investment instructions sent to the bank, also apparently by email, bearing Mrs Danison’s signature. Those are also in the bundle. They were obtained somewhat late in the day before the trial directly from the bank in Switzerland. It appears that requests for them to be produced via Mr Danison had not been successful. Some limited and redacted copies had been obtained from the CPS beforehand. Those letters are all in a typed format on a letter heading giving Mrs Danison’s name and saying that she acts by power of attorney for Isabella Danison. They bear a signature which Mrs Danison accepts corresponds to her signature. She says that what happened in relation to these instructions is that the letters were typed out on computer by Mr Danison, sent to her by email, returned by her to him, he then applied her signature electronically to them, and forwarded them to the bank. It seems likely that the signature is in fact electronically applied. Although there is no handwriting evidence, it seems fairly apparent that the signature is exactly identical in the case of each of the letters.[28]All of those instructions concern placing funds from the Isabella account on various deposits within accounts at Bank Julius Bär. Some of those letters refer to funds recently having been received into the account, and some of those state the amounts of the receipts. Others do not. Some give an indication of the amount presently standing to the credit of the account. In particular, there is a letter dated 16th February 2009 (page 334 in bundle 3) which reads as follows:
“The euro deposit account should now have reached its target position of €5 million with the recent credit of US$10.2 million less the sum of £1,585,000 paid to lawyers acting on behalf of Isabella’s asset management company, Bluebird Universal Incorporated. As a result, a new dollar deposit account, as instructed, should now be enforced in order to create another block of 5 million capital sum to be fixed for a term of one year with no risk. My instruction is that funds recently credited to the account be split with a conversion into euros in order to meet the end limit of €5 million in the existing account. The remaining balance of funds should be held on deposit in a new dollar account until the balance on that account also reaches the desired sum of $5 million.”
So it appears from that letter that the account had €5 million already credited to it, and would have been well on the way, at the very least, to a further amount of $5 million also credited to the account.[29]On 10th October 2008 the transfer that I have referred to of £700,000 from Mrs Danison’s Spanish account to the Credit Suisse account took place. There it was invested in treasury stock. On some date in October of that year Mr Gomez commenced his claim against Mr Danison. There is no evidence that that claim was served on Mrs Danison or that it was known to her.[30]In January and February 2009 funds of just over £1.55 million were paid from the Bluebird account to some solicitors in England in order to fund the purchase of a property called Pattenham Manor House in Northamptonshire. That purchase was to take place in the name of Rosemary Woodward, who is said to have been Mr Danison’s personal assistant. The transfer instruction for that payment is in fact signed by Mr Danison. Mrs Danison denies that she gave any instruction for that transfer, and says that she was not involved in it. There is some other evidence about that which will be relevant in due course.[31]In all of this history, Mrs Danison’s position is that she had little or no understanding of the business that Mr Danison was engaged in. He told her no more about it than various unspecific references to financial services and setting up hedge funds. He projected himself to her as a smooth, confident and successful businessman. Although she knew he had been convicted in 1996, she thought that he was reformed after that, and she had no reason to suspect that he might still be acting dishonestly. As I have said, she said that she knew nothing at all at the time of any subsequent criminal proceedings in Birmingham, still less the criminal restraint order or the disqualification order in 2007. She did not know about the claim by Mr Gomez or the freezing order. She presents herself as a housewife, a retired civil servant, with no interest in money matters and content with a quiet life in her rural cottage. She said that she had no reason to enquire into Mr Danison’s dealings or to question the source of his funds. She was concerned only with financial security for herself and for Isabella. She thought that Mr Danison was setting up that security and paying amounts into it from his own resources in order to make amends to her for his betrayal in the affair with Dr Dada and his absence in a critical period of Isabella’s life.[32]My impression of her as a witness overall was that she was certainly not a financially sophisticated person, but she was and is an intelligent person and quite capable of understanding banking transactions. She seemed to me to have a good understanding of those transactions that she was engaged in. Her answers to some questions were very sure and confident. Where she was on sure ground she gave direct answers to the questions, which on occasions were very forceful. In many other respects, however, she gave answers which were very much vaguer, were disjointed, and seemed to be the product of searching for something to say. She had a tendency on a lot of occasions where the matter she was being asked about might lead to answers that would be adverse to her case to reply in conditional or conjectural terms. She might say, for instance, that “Mr Danison would have told me…” or, “I would have believed that…” My impression was that those answers were given when she was searching for an answer that would fit the case that she sought to present rather than doing her best to recall what had actually happened. On some occasions she gave a string of explanations, each of which was inconsistent with the last. It appeared that on these occasions she gave one answer, realised that it was insufficient or inconsistent with something else that had been said, and sought to replace it with another explanation which was inconsistent with the first. When she was pressed on matters of inconsistency, she on some occasions sought to draw fine distinctions as to the wording of the question, and maintained that the answer that she had given was correct on the basis of the distinction that she had drawn. She was especially vague when asked what she knew about Mr Danison’s activities and what explanation he gave her of those activities. I found it very difficult to believe that she could have been as unconcerned about those activities and as to enquiries that ought to be made about those activities as she attempted to portray. It seemed to me that, even if Mr Danison is the plausible rogue that she portrays him as (and as he no doubt appeared to his other victims), in the domestic context she would have been likely to have wished to know more than she appeared to want to know about his activities, and even if he had given her some explanation as to what those activities were sufficient to satisfy her, she would be able to remember what it was. As it is, she was so vague about these explanations that it appeared that Mr Danison had not told her anything at all, which I found impossible to believe. I am satisfied overall that the account that she has given to the court was substantially incomplete, and I regret to say that I came to the conclusion that this was deliberately so and that she had given evidence which was intentionally misleading.[33]There were a great many matters of inconsistency which came out in the cross-examination. Mr Mather was assisted in that by the late availability of two sets of documents, the first of which were the account statements and internal records from Bank Julius Bär, which were provided by an examining magistrate in criminal proceedings in Switzerland. Those were of substantial assistance in tracing what had happened to the funds, and much more helpful than the heavily redacted copies previously provided by the CPS. The second document was a transcript of the police interviews given by Mrs Danison on her arrest in June 2009. Those arrived while Mrs Danison was in the witness box, but they enabled Mr Mather to ask her some questions at the end of his examination, comparing the answers that she had given in her witness statement and her evidence to this court and her evidence to the police. In the course of preparing this judgment there were some further passages which seemed to me to be relevant, which Mr Mather had not put to Mrs Danison, and so at my invitation she has given evidence again today and been asked about those so that she had the opportunity to comment on them before I gave this judgment. When asked about the contents of that interview, in some respects the police transcript confirmed the answers that Mrs Danison had given to this court, and in others it did not. One example of confirmation of what Mrs Danison told the court was that she was pressed as to whether she had told the police during that interview about the existence of the Credit Suisse account. She was adamant that she had done so, and told them that the balance in it was about £1.5 million. She was, I think, rightly pressed about how it might be that, given that information, when the CPS subsequently drew up the criminal restraint order, they did not refer specifically to the Credit Suisse account. It does seem odd that they did not do so, but nevertheless the fact is that they did not. The transcript shows, however, that Mrs Danison did disclose that account, although she said that only £500,000 had gone through it, rather than the £1.5 million that she refers to presently. It seems from the documents that the balance in May 2009 was about CHF2.5 million in total in various currencies, which would be approximately equal to £1.5 million, so that the figure she gave today appears to have been substantially correct.[34]The reasons I have come to this conclusion about Mrs Danison and her evidence are as follows. Firstly, Mrs Danison went out of her way to present herself to this court during the course of these proceedings as having had little relationship with Mr Danison since 2001. She sent two letters to the court at an early stage in the proceedings, in December 2009, the first of which was in manuscript, addressed to

the judge here in the application to strike out the defence, and in that she said:

“I am the estranged wife of the first defendant, Patrick Danison. We separated (not legally) in 2001. From 2003 to October 2005 he was in a relationship which ended acrimoniously.”
The second letter was sent by email (and so typed), and in that she said substantially the same thing. In these proceedings she has filed two defences. The first was in manuscript, which was struck out by order of the Master and replaced with a typed defence. In the typed defence she said this:
“I am the estranged wife of Eric Danison. We separated in 2001, but not legally. From 2003 to October 2005 he was in a relationship which ended acrimoniously. We hardly had any contact with Eric Danison during this period. My daughter (the Sixth Defendant) and I have lived at South Cottage in Suffolk, the family home, since 1999. Mr Danison has lived at many different addresses since 2000 and has been an irregular visitor.”
All of that seemed to be describing the whole of the period from 2001 up to the time of the writing of those letters. The clear impression given was that she was at that time still estranged. In fact, in her witness statement she presented a different picture. She said in paragraph 1:
“Although I have always been married to Patrick Danison, we separated in 2001, but it was not until 2006 that we decided to rebuild our relationship.”
In paragraph 6 she said:
“In 2002 we separated fairly amicably, and he moved out to stay with his father, who had recently been bereaved. He also had his own accommodation in London. He was not content living the quiet self-sufficient life in rural Suffolk that I enjoyed and he wanted to move to London, whereas I did not. However, he did continue to visit Isabella and provided financial assistance to us and the upkeep of the cottage. However, by the end of 2003 he was in a relationship with Dr Valjit Dada, director of one of his companies, and we no longer saw him as much. In fact we rarely saw him.”
At paragraph 8 she said:
“In 2006 he re-emerged and made it clear that he had made mistakes in his personal life and that he wanted to rebuild his relationships with both Isabella and I. I was glad for him to come back into Isabella’s life, and as far as I was concerned I was prepared to try and rebuild bridges. I wouldn’t say that I ever saw us as a proper couple again, but we did begin to rebuild our relationship and did things together as a couple and as a family. We enjoyed going to concerts, art galleries, the theatre, going for walks in the countryside and the coast in Suffolk. We also started taking part in local village events together too. In 2006 we went on a family holiday to Spain and Morocco.”
[35]The transcript of her evidence to the police also shows that in the period 2001 to 2005 Mr Danison was paying her an ad hoc maintenance allowance, which she said averaged approximately £20,000 per annum, but also during that period, or at least up until 2003 (it is not entirely clear from the transcript), he was asking her to make payments on his behalf to other people, apparently of amounts up to about £25,000 from her own account, which he would later repay to her. She referred to this as making payments through her account. The reason that she gave for this request was said to be that Mr Danison was having difficulty at that time in maintaining his own bank account, and that banks would close down his accounts as they were always going into overdraft. If that is true, it cannot have been the case that he was actually successful in business at that time, although her evidence was that he was, and she must have known it. It also suggests that she was close enough to him, or knew enough about his means, to trust him to repay apparently quite large amounts which he was asking her to pay out on his behalf, despite their apparent separation. It is also, of course, inconsistent with what she at first told the court, which clearly gave the impression at least that she had been separated between 2001 and 2009, whereas there had been a substantial process of rebuilding their relationship starting in 2006. Mrs Danison’s evidence sought to minimise her knowledge of the circumstances of his conviction in 1996. She was extremely vague when asked about this in cross-examination and said only that she had been told the bare bones of the allegations against him, and then only when he had pleaded guilty. She was asked when she had become aware of those circumstances, and her first answer was to say that she had not been aware of them until the matter had arisen in the course of these proceedings, so over 12 years later. She then said that Mr Danison must have said something to her at the time. She was asked whether she knew there was going to be a trial. She hesitated a long time before answering that, and then said that she must have done. She was pressed again about the nature of the charges against Mr Danison, and she was, to my mind, evasive in responding to that, and eventually said only that it was something to do with a property and contracts not being fulfilled. At a later point in her evidence, dealing with another matter, she referred back to the conviction and on that occasion said, apparently inadvertently, that it had something to do with mortgages. In point of fact, the reported appeal of Mr Danison’s conviction (which is referred to in the documents) shows that Mr Danison’s trial at the Old Bailey took place over a period of six weeks, that it related to allegations of mortgage fraud, and that at the end of the six weeks he pleaded guilty when, according to the Court of Appeal judges, overwhelming evidence of his guilt emerged. It is, frankly, impossible to believe that Mrs Danison was so uninterested in her husband’s affairs that she would not have enquired further than she was prepared to admit as to what his trial was about. She admitted that she knew he was going to be on trial. It is not possible to believe that a wife would not want to know more about the circumstances than she appeared to.[36]It was also apparent from the transcript of her interview with the police that in fact she had known more about this at the time than she had admitted. This is one of the passages that she gave evidence on after the conclusion of the main trial when I invited her to make comment about it. At page 11 of the police transcript she is being asked by police officers about the opening of the Credit Suisse account, and she said:
“It’s an account that I opened in 2007.”
She is asked about the monies in that account, and she says:
“That’s a similar scenario with Mr Danison. That was for my long term future because I am wholly dependent on Mr Danison, and due to the scenario in the past, um, I wanted to make sure that my future would be secure.”
She is asked:
“Can you just expand on…you say scenario in the past. What do you mean by that?”
She then says:
“Well, I think from about 94 to 96 he was arrested and charged with fraud, building society fraud.”
When asked about that passage today, Mrs Danison accepted that she had known that Mr Danison had been arrested in 1994.[37]Mrs Danison said that she did not know that Mr Danison had been disqualified as a director in 2007. It was apparent (and she was asked about this in relation to the police transcript) that she had known at the time of the police interview that Mr Danison had been disqualified as a director. She herself brought that up in response to questions from the police. When she was asked about this in cross-examination, she said that the disqualification she was referring to was one which dated from the time of his conviction in 1996. It is not impossible that he was disqualified then, but there is no evidence of it in the papers before me, and no reference to it by the Court of Appeal in hearing his appeal. It appears from the context in the transcript that she was talking of events in about 2003, so if she was in fact referring to a disqualification order other than the 2007 one, it must have been one which happened before that date. It is not impossible that Mr Danison may have been previously disqualified. If he was, that may explain why the maximum term was imposed on him in 2007 – for a second offence, as it were. At all events, however, it seems to me that it was misleading of Mrs Danison not to make reference to the fact that she knew that Mr Danison had been disqualified when she was asked about his previous convictions and about his disqualification order in 2007.[38]Mrs Danison, in my judgment, gave deliberately untruthful and misleading evidence as to her knowledge that monies had come to the Isabella account from the Bluebird account, and also as to the source of monies paid into the Bluebird account. It is now known that there were two separate accounts at Bank Julius Bär, the Bluebird account and the Isabella account. That was not apparent to the claimants when these proceedings were originally issued. The particulars of claim give the specific IBAN number of the Bluebird account itself (or what is now called the Bluebird account). The claimants, of course, were aware of that account, because they had made their transfers into it. The particulars of claim allege that Mrs Danison holds a power of attorney and is an authorised signatory over what is referred to as the Bluebird account, and take care to define the Bluebird account for those purposes as including any other accounts at Bank Julius Bär in the names of either Mrs Danison or Isabella Danison. In the first (manuscript) defence Mrs Danison says:
“I deny I was the signatory on the Bluebird account, or helped to establish the Bluebird account, or helped to operate the Bluebird account.”
Further down:
“I deny any knowledge that I was aware of any money coming into the Bluebird account belonged to the claimants or investors who had been fraudulently deceived.”
[39]In December 2009 there was a hearing before His Honour Judge Raynor, when he asked her about the case that she would be putting. (This was before the typed defence had been submitted). Judge Raynor asked:
“Are you able and willing to tell me whether it is your case that basically you knew nothing about the operation of Amkel nor about the operation of the bank account, the Bluebird bank account, is that going to be your case?”
Mrs Danison said:
“That is our defence, yes, in the criminal proceedings.”

The judge asked:

“And that will be your defence in these proceedings?” and Mrs Danison replied, “Yes.”

The judge asked her again:

“That you were basically in no way party to anything, that will be your defence?”
Mrs Danison responded:
“The defence, yes, defending our position within the case itself, yes.”

The judge said:

“And so what you will be saying is that if in fact it is stated to be that you were in some way instrumental in respect of the offending bank account, that just is not right?” “It is, yes.” “And that you knew nothing about your husband’s business activities.” “That is right, yes.”
[40]By that stage of the proceedings Mrs Danison had not told the claimants of the existence of the Isabella account. Her solicitors had written a letter promising full cooperation in relation to enquiries of the Swiss banks. When asked about that letter, Mrs Danison said that she had been advised by her criminal solicitors not to disclose the existence of the Isabella account. She was pressed about that and became rather more uncertain. She said that they had probably advised her to err on the side of caution, and that the advice was “probably” not to disclose the Isabella account. She then started to say, “In case we incr…”, clearly intending to say “in case we incriminate ourselves”. She then changed that and made a different reference. It seems to me clear that the reason she did not disclose the existence of the Isabella account was that it would be adverse to her case in the civil proceedings, and no doubt the criminal proceedings as well, if it was known that money had gone from the Bluebird account, where she had no apparent connection, to one where she did have a connection.[41]Mrs Danison maintains that her statements were true in relation to what is now called the Bluebird account, that she was a signatory on that account and was not a beneficiary of it. She says that she was confused by the references in the particulars of claim to the two different accounts. In my view, however, the points that she was being asked to deal with in the particulars of claim clearly covered all the relevant accounts, and she must have known from the allegations in relation to an account over which she had power of attorney that it was relevant to respond in relation to the Isabella account as well as the Bluebird account, but she did not do so. The likely implication, it seems to me, is that she was reluctant to reveal the existence of that account, and even that she may have hoped that its existence would not emerge.[42]Its existence began to emerge, however, after the submission of the typed defence. In that defence she made a very brief reference, having said that she had nothing to do with the Bluebird account, saying:
“I have limited power of attorney over my daughter’s account.”
She was then asked for more particulars of what the daughter’s account was she was referring to, as a result of which the details of the Isabella account were eventually provided. In fact, it is not true that her power of attorney over that account is limited, but I accept that she may have regarded her role under that power of attorney as being limited to safeguarding the funds in the account for Isabella’s benefit and not, for instance, to pay out for her own benefit. When the particulars of the account were given in replies to questions, she said this:
“The Fifth Defendant was not present or involved in the opening or setting up of her daughter’s account. The Fifth Defendant did not sign any forms or documents save for the limited power of attorney over her daughter’s account which was presented to her by the Bank’s officers.”
In fact that was not true. Mrs Danison was at the meeting in Geneva at which the account was opened. When asked about that in evidence, Mrs Danison maintained that her answer was true on the basis that the account had already been opened before they went to Geneva. That, from the documents, is clearly not the case. What does appear to have happened is that Isabella had met Mr Danison and Bank Julius Bär officials in London before the visit to Geneva. They no doubt may have discussed at that meeting the opening of such an account, but it is clear that the account was not in fact opened until they all went to Switzerland. All of the forms for that opening were signed and dated at that meeting. Both Isabella and Mrs Danison were present. Even if most of the conversation was conducted by Mr Danison, I simply do not accept that Mrs Danison cannot have appreciated that the account was being opened at that stage. Isabella clearly knew that. I do not accept that Mrs Danison would not have known it. Furthermore, the process was substantially similar to the one that she had been through herself, as she had admitted already, with Credit Suisse and the Spanish account. Even if it had been the case that Mrs Danison was firmly convinced that the account was already open and that signing of the forms was in some way, as she said, merely a formality in Geneva, it was in my view seriously misleading to submit her replies stating that she had not been present when the account was opened when she had gone to the meeting at which those documents were signed.[43]Contrary to what is said in those replies, Mrs Danison also accepts that she signed the various instructions for deposit of amounts and transfer between currencies within the Isabella account, or at least she authorised Mr Danison to apply her signature to those letters. Although the process she describes involves the instructions initiating from Mr Danison and being relayed to the bank by Mr Danison, it is clear that Mrs Danison was involved in that process, and it must be assumed that Mr Danison sent them to her in order that she should be involved and know what was going on. If it had been the case that this account was in fact being administered by Mr Danison, keeping Mrs Danison in the dark, he need not have sent her the letters at all. On her evidence, Mr Danison had her signature in electronic form on his computer. If he drafted the letters, he could simply have applied the signature straight to the letters and sent them off to the bank without telling her. But he did not do that.[44]Mrs Danison made a clear denial in her witness statement of any knowledge of the source of funds paid into the Bluebird account, and of any transfers from the Bluebird account to the Isabella account. At paragraph 16 of the witness statement she said this:
“The Isabella account was simply to provide for Isabella herself, and my impression was that Patrick Danison intended to set her up with a sum of £1.5 million. I should make clear that I have not had any involvement with Patrick Danison’s businesses during all the time that I have known him, so I would not have been aware of how monies were obtained, from whom, under what circumstances, and into which account they were being received before being deposited into the Isabella account. I was certainly not aware that monies being deposited into the Isabella account was emanating from the Bluebird Media account.”
That statement was clearly untrue, and clearly untrue to Mrs Danison’s knowledge. First of all, there is the handwritten instruction that I have referred to previously, signed by Isabella at the Geneva meeting, being an instruction for the transfer of a million pounds from the Bluebird account to the Isabella account as soon as it was set up. Mrs Danison said that she had no recollection of that document and had not seen it. In my view, that is not credible. She must have seen it and she must have known what it referred to. Even if the instructions to the bank at that meeting were given orally by Mr Danison, plainly those instructions resulted in the bank’s officers drawing up the handwritten letter for Isabella to sign. It is not, in my view, remotely credible that they would have done that without ensuring that the young lady in front of them understood the effect of what she was signing. Nor is it, in my view, remotely credible that a young lady being asked to sign a document, under which she would have known that she was expecting imminently to receive a million pounds, would not have regarded that as something exciting, important and memorable, and something that she would have wanted to discuss with her mother, who was there present with her. In my view, the existence of that document shows clearly that both Isabella and Mrs Danison must have known that it was intended to move funds from the Bluebird account, and very substantial funds, starting with a million pounds.[45]It is also apparent from the police statement that Mrs Danison knew all along, or at the very least assumed, that money came into the Bluebird account from Amkel clients, and went from the Bluebird account to the Isabella account. She was asked a number of questions by the police about this, which in my view make her knowledge of that entirely clear. These start at page 2 of the transcript. I am going to read various excerpts, skipping over matters which are not relevant for the present point. Beginning at page 2, she is asked:
“Ok, tell me about your knowledge of the removal or transfer of money to accounts in Switzerland.”
She said:
“Mr Danison may have moved money to an account in Switzerland on my behalf.”
Further down she was asked:
“Tell us how that came about, what the account was and where the account is.” “The account is in the name of Julius Bär.”
She then gave some further details about Bank Julius Bär. On page 3 she is asked:
“Just explain to me how that account was set up, whose idea it was and everything. Tell me everything about that account basically.”
She said:
“The account, obviously I can’t say initially that, the trust part obviously was set up for my daughter, and I imagine that an account is… It’s a business account initially and then funds are sent to a trust account.”
A slightly hesitant reply, but she concludes with the statement:
“It’s a business account initially and then funds are sent to a trust account.”
She is asked about the business account, and she said:
“Bluebird Media, is it? Or Bluebird Universal.”
Over the page:
“I think it’s Bluebird Universal.”
She is asked:
“Whose business is that?” “That would be Mr Danison’s.”
A little later on (page 5) she is asked:
“What was your understanding of how that was being funded?”
Her reply seems to be partly inaudible, but she said:
“From business deals (inaudible) Mr Danison.” “What was the business?” “Financial services.” “Were you involved in the provision of those services?” “No. “And that was with, you say, Amkel?” “I would imagine it was through Amkel, maybe private consultancy work Mr Danison had.”
Further down the page:
“Private consultancy. Right, ok. What was the scope of these business deals and these financial services that you were aware of.” “Well, I wasn’t aware of the actual deals, but you mean the amounts.” “Yes.” “I don’t exactly know. Something like I suppose it could have been up to £500,000 a time or less or dribs and drabs.” “But that could be the value of the deals?” “Could be, yes.”
On page 6:
“Where did that money come from into the account? You say it was paid into this account at Julius Bär.” “It had come from clients at first. Oh, a direct one from Mr Danison.” “Did you get the bank statements?” “No.” “Where would they go?” “I’d imagine they’d lodge with the bank.”
She is asked:
“Are you aware how much was in there, or the activity that took place in that account?” “No.” “So you don’t know how much money would be in there today?” “No.” “You don’t know how much money was in there at any time?” “I think I can maybe have [seen] something like there could be 5 million in euros.”
The police officers then expressed some incredulity at that. On page 7 she is asked:
“That money would come directly from clients you say on occasion.” “On occasion I would think.” “How would you be aware that it was coming direct from clients?” “Maybe I wasn’t directly aware of it. They were just going into the account and Mr Danison might tell me at some point where X amount had gone in or money had gone into.”
She is cautioned by the officers:
“If you’re not aware of something don’t assume.” “Ok, right, I don’t know then.”
Later on (pages 9 and 10) she is asked about the Isabella account:
“It’s an account for Isabella and you’re a signatory on that account.” “Yes.” “Is anyone else a signatory for that account?” “I think Mr Danison had the signatory at first.”
In fact, that is not correct. She is then asked:
“Does he have any control over that?” “I think he has control over the…is it the initial account, Bluebird Universal. That’s his side of it, and then it goes into a trust.” “In Isabella’s name?” “Yes.” “Then that’s in your name?” “I’m the power of attorney over the trust.”
[46]Those exchanges, in my view, show clearly that Mrs Danison understood that the Bluebird account and the Isabella account were linked. She refers to the Bluebird account as the “initial” account. It seems clear from those passages that she understood the intention to be that monies would flow into the Bluebird account and then on into the Isabella account, and that those monies originated from clients of Mr Danison’s business. The reference to the Bluebird account as an “initial” account is not, in my view, a way in which one would normally refer to an ordinary commercial business account of a business from which it would pay its normal business expenses. It gives more of an impression that the account is simply a staging post for the transfer of funds to the Isabella account. What is said in those passages is, in my view, completely contrary to and entirely irreconcilable with what is said in Mrs Danison’s witness statement. She was asked understandably about that in cross-examination. She dissembled in answer to that. She was very reluctant to admit that she knew that funds had come from the Bluebird account despite the clear evidence that she had told the police that she was aware of that. In the end, she fell back on avoiding the question about knowledge of the account the monies had come from, saying only that she did not know the funds had been obtained by fraud.[47]There is a further indication, in my view, that she was aware of the transactions on the Bluebird account in that she was quite clearly aware at the time of the Pattenham Manor transaction and the payments that were made to the solicitors for the purpose of buying that property. In fact, the position from the documents emerges as being that the relevant payment to the solicitors of just over £1.5 million was made out of the Bluebird account on the basis of an instruction bearing Mr Danison’s name. I say “bearing his name”, because those instructions that were sent with Mr Danison’s signature on it also appear to have an absolutely identical signature in every case. So it would appear that that signature was applied also electronically and the document was then faxed or emailed to the bank in Switzerland. One cannot, therefore, tell from the fact that Mr Danison’s signature is on it who was responsible for the transmission to the bank. Mrs Danison knew that this was the case when she filed the defence and said that she had not been responsible for that instruction. She told the police, however, that she had given that instruction and that the payment had been made from the Isabella account rather than the Bluebird account. She was in fact very definite about that in a passage beginning at page 8 of the transcript. She was asked, referring to the Bluebird account:
“Did you ever move money from that account?” “I moved some money for a property.” “Describe that to me.” “It was property but…”
She is interrupted by her solicitor, who says:
“What do you mean? Describe the property or describe the transaction.”
The officer says:
“Both really, the money and when it happened, the whole shooting match really as far as I am concerned.”
She said:
“It happened, I think, at the beginning of this year. It was a business plan that was put forward by a friend of Patrick’s who was hoping to buy this particular property in respect of setting up a retreat and lifestyle converted therapy/spa scenario. I think the plan had fallen through and obviously they were in danger of losing the property. Patrick thought it would be a good idea if we went ahead and helped them with that, and in the light of the banking crisis at the time had something in bricks and mortar that would be tangible for Isabella. These people were going to pay us back, or if they couldn’t pay us back in the long term the property obviously would revert back to Isabella. That’s as much as, I don’t know, the property I know it was quite a large property, but I don’t know.”
She was asked:
“How much was that for?” “I think it was 1.2 million, I think.”
She was then asked:
“Right, ok, so you had to do some signatures for that.” “I had to sign over that amount of money to a solicitor, Julius Bär.” “How did you go about doing that? What were the mechanics?” “It was just a prepared, a letter prepared just to say, ‘Would you please transfer that to, to there.”
The officer then said:
“Right, from one place to another? And that was just, I presume they had a specimen signature over at Julius Bär.” “Yes.”
[48]It is quite plain from that that Mrs Danison was aware of that transaction. She thought that she had had to be involved in giving the instruction to the bank. She must, therefore, have discussed it at the time with Mr Danison. The only explanation I can see for the inconsistency is that she approved the transaction at the time and had forgotten that the mechanics were that payment was taken from the Bluebird account, and the instruction went over the signature of Mr Danison rather than herself. It is a reasonable inference that she knew that that authority was being given and was sufficiently closely connected with it to have thought that she may have given it herself.[49]All of those matters, it seems to me, show that Mrs Danison’s connection with these accounts and her knowledge of the funds going through them was far more extensive than she was prepared to admit. In relation to the origin of the funds and the possibility of a fraudulent source for them, Mrs Danison maintained throughout her evidence in this court, and in the police interview, that she had no reason to suspect that any of these funds were the proceeds of fraud. She thought Mr Danison was conducting legitimate business deals and that the monies represented profits or commissions that he was entitled to. She regarded the funds in her name, she said, as akin to a pension and long-term provision for her security. Funds to Isabella, she said, were for her future security and to make up for Mr Danison’s absence in her teenage years.[50]Mr Mather submits that, on the evidence I have received, I should in fact find that Mrs Danison knew all along about the fraud and knew that the funds were not legitimately obtained by Mr Danison. The matters that he relies on in addition to those I have referred to are, firstly, that he says it was obviously suspicious to set up accounts in Spain and two different Swiss banks into which very large sums were paid over very short periods of time. The explanation that it was intended to set up nest eggs for Mrs Danison and Isabella was not credible, when Mrs Danison was living at the time in a small cottage apparently on an income of about £20,000 a year paid in a very ad hoc and irregular way by Mr Danison. I accept that those transactions would make an ordinary person suspicious. Of course, Mr Danison was presenting himself as having international clients and business around the world, but Mrs Danison knew full well that one of the apparent merits of a Swiss bank account was that it was a secret account. She also said that it was her understanding (I make no comment about this) that monies paid into a Swiss account did not have to be declared for income tax purposes in the UK. What she appears to have known of Mr Danison's business was that, first of all, it had begun from scratch on his release from prison in 1998 and that he does not appear to have been spectacularly successful in the period before they separated. She said that he appeared to be successful between 2001 and 2003, but that in my view cannot be taken at face value since, as I have said, she was being asked to make payments through her account on an ad hoc basis, which were either suspicious or confirmed that he was not being sufficiently financially successful to be able to maintain his own bank account anywhere. He may very well have appeared to be more successful in the period when he was with Mrs Dada, but both Mrs Danison’s evidence and Isabella’s was that when he came back to them in 2006 he was not continuing to live as lavish a lifestyle. He was still well turned out, but he was not conducting a jet-set life, and certainly they were not. It seems to me that for payments of the amount that we are talking about here to have been genuinely and legitimately obtained by Mr Danison, the scale of the business underlying them would have had to have been truly vast. Plainly it was not, and he was showing no signs of having a lifestyle consistent with running a business on that vast scale.[51]Mr Mather also submits that Mrs Danison must have been put on suspicion by knowledge of the amounts going into and between these various accounts. She accepted that she gave some investment instructions in relation to those funds and must, therefore, have known how much the funds were that were being received. She does accept that in relation to the Isabella account, and from the documents that I have referred to, it would have been apparent from documents that she saw that there was of the order of €5 million plus $5 million at least at one point in the Isabella account. I am satisfied that Mrs Danison also gave instructions for investment on the Credit Suisse account, and so must have had a fair idea of what amounts were flowing through it, even if she did not see full statements of the balance at any one time.[52]In relation to the Spanish account, Mrs Danison said that she had not given any investment instructions on that account, and that although various investments had been made when receipts had been paid into that account, she thought that was the bank acting on its own initiative following initial instructions given by Mr Danison at the meeting in Marbella. That seems to me to be unlikely. First of all, the amounts of the investments made are clearly related to the payments in, but they are not the whole amount of the payment in, and it seems unlikely that the bank would have taken its own view as to what amount to invest. Somebody must have been giving that instruction. Mrs Danison accepts that she was the only person authorised to give instructions on that account. It is not impossible, of course, that Mr Danison might have found a way of forging her signature or giving those instructions without involving her, but I think that is relatively unlikely, since he clearly did not do that in relation to the Isabella account in Switzerland. I conclude, therefore, that it is more likely that Mrs Danison was involved in giving those instructions. At all events, she saw the statements relating to the deposits that were made, and even if those were not statements of the whole balance on the account, they will have told her in rough terms what was available in that account. It is also clear, and Mrs Danison accepted this, that she gave investment instructions by telephone both to Credit Suisse and to Bank Julius Bär.[53]Mr Mather submits that Mrs Danison must have known that Amkel was not as substantial a business as was presented by Mr Danison. She accepts that she saw the website of Amkel and was questioned about statements on that website in which Amkel claims to have approximately 500 employees, offices worldwide, and to have been established for 20 years. She must have known that it had been recently established, and went to what was in fact its only office, which was a serviced office on a floor in Canary Wharf shared with numerous other businesses, at which there were very few employees or other people there to be seen. Mrs Danison’s evidence was that she looked at the website, but that she had not looked at the home page with the particular statements on that she was being asked about. She was not able to say with any certainty which other pages she might have looked at. Her evidence was that she was only interested in looking at the layout on some sort of artistic basis, rather than the content of the website. I have to say that I do not accept that as a complete explanation. Mrs Danison told the police that Mr Danison had asked her what she thought about the website, and she had told him that it was impressive. I think it is unlikely that, if she had been asked to look at the website, she would have found her way initially to anything other than the home page. It is not necessarily the case, of course, that she would have seen every word on that home page, but it seemed to me that she was being inordinately defensive and seeking to disavow any previous sight of the page with the relevant material on it. She did go on to say that if she had seen the reference to the business being up and running for 20 years, it would have been possible that the business had been established previously and that Mr Danison might have bought into it in 2007 rather than setting it up in 2007. That seemed to me to be another example of her clutching at straws and seeking to make a statement which fits her case rather than anything which represented a recollection of what in fact Mr Danison had told her. She did make the point, quite fairly, that her visit to the office would not necessarily have told her any more than it appears to have told the various representatives of the claimants, who were professional investors themselves, or professional representatives of investors, several of whom had visited the office in Canary Wharf and had not apparently appreciated that there was anything inconsistent with what they had been told about it. I do not accept, therefore, that, because of her own visit to that office, it is possible to assume that she would necessarily have been aware that what was behind what she saw was not compatible with what she knew about Amkel’s business. There is also, of course, the point that it is inherently suspicious that Mr Danison would have been asking Mrs Danison to make payments to clients and receive money from clients through her personal bank account, as she told the police he had done in the period up to about 2003.[54]Something which Mr Mather did not originally ask Mrs Danison about but seems to me also to be relevant, and another matter which I invited her to comment on today, was that although she said in cross-examination that she had been on two occasions to the Amkel office, both of which had been to meet Mr Danison and Isabella and go on for lunch, she denied that she had ever met any business acquaintance of Mr Danison other than Mr McCook in Spain. She did not mention anything that had occurred on her visit to those offices other than that she had arrived there, asked for Mr Danison, met him, and gone on for lunch elsewhere. In the police interview, however, she said that when she was at the Amkel office a Mr Mathew Gordon Banks had arrived. She described him as a business contact of Mr Danison, that he had met Mr Danison and given him an envelope and that Mr Danison had taken a sum of £2,000 in cash from that envelope and given it to her. She said in answer to questions today that the envelope given to Mr Danison had been a large A4 envelope, and she assumed that it contained greater amounts of money, and she said quite a large amount of money. She also told the police that Mr Gordon Banks and others had paid amounts of up to £20,000 or £30,000 direct into her personal accounts. She told the police it was a Barclay’s account. It appears that there are also some credits from Mr Gordon Banks in the Credit Suisse account. Some of those funds, she said, she passed on to Mr Danison, and others she had kept for her own use. When asked about that visit today, she said that she assumed Mr Banks was a social contact rather than a business contact, and that he had had discussion with Mr Danison about matters such as cars. But that was not the way she described him to the police, and a social contact would have no reason to produce a large envelope full of cash.[55]It seems to me that that transaction at the office and indeed the transactions in which Mr Gordon Banks and others paid amounts direct into her personal accounts must have been suspicious. She cannot, it seems to me, have regarded it as normal that a business contact of Mr Danison, engaged in an apparently respectable business, would arrive with a rather large envelope of cash, and that Mr Danison would take some out of it and give it to her. It is not clear exactly what the date of that meeting was, but it must have been sometime in 2007 or 2008. By that time Mr Danison was, on Mrs Danison’s evidence, an apparently successful businessman, and there would be no reason, on the face of it, why he should not have his own business account, and no reason why he should be receiving cash payments, let along payments being made direct to his wife in connection with legitimate business deals. In my view, the most likely reason why she did not mention that meeting with Mr Banks in her witness statement or her evidence to this court was that she knew that it looked suspicious for that incident to have taken place.[56]Taking all these matters together, in my judgment they do not go so far as to enable me to infer that Mrs Danison actually knew of the nature of the frauds that Mr Danison was committing, or exactly what his dealings were with the various clients that he was defrauding. There is no evidence directly that she knew how they were persuaded to part with their funds. There is, therefore, no evidence that she knew that a fraud was being committed when the clients were invited to part with those funds and pay them into the Bluebird account. But it is, however, clear, in my view, that she knew sufficient of the circumstances in which payments were made into that account and then transferred onto the Isabella account by the time of opening of the Isabella account and the Spanish account, and whilst those accounts remained in operation to have been aware that there was a substantial risk that, however they were obtained, whatever the precise means, the funds were being illegitimately obtained and illegitimately paid by Mr Danison through the Bluebird account into the Isabella account. It seems to me that the circumstances that I have referred to would give rise to suspicion of that kind in any honest person, even a relatively unsophisticated person, as Mrs Danison presents herself to be. Furthermore, I do not accept her evidence that she was not in fact suspicious. Bearing in mind the lies and evasions that I found she gave in her evidence, I think the much more likely inference is that she was in fact aware at the very least of the distinct possibility that these funds were not legitimately available to Mr Danison to pay to her or to Isabella, and that she deliberately closed her eyes to that possibility. That inference emerges sufficiently, I think, from the evidence I have referred to. In fact, I think it was made clear by another passage in the interview with the police – this again being one that she was asked to comment on today. I have read part of this section already (page 11 in tab 1 of the transcript). I will read part of that again and carry on from where I read before. She said in relation to the Credit Suisse account:
“That’s a similar scenario with Mr Danison. That was for my long term future because I am wholly dependent on Mr Danison, and due to the scenario in the past, um, I wanted to make sure that my future would be secure.”
She is then asked by the officer to expand on what she means by “scenario in the past”, and says:
“Well, I think from about 94 to 96 he was arrested and charged with fraud, building society fraud.”
She goes on to say:
“And we had a confiscation order made, and in that confiscation order they took my home away and my monies in my savings, and that was my money, my savings, so basically at the end of the whole scenario 2008 when it was after sort of 2 years of wrangling over how much of the property and how much I would be entitled to, I was left with nothing.”
I think the reference to 2008 must be a mistake. She is referring in fact to the period running up to about 2000.[57]When asked about this today, she said that the concern that she was expressing arose from the fact that Mr Danison had been convicted in 1996, but she denied the inference that she was concerned that he might be the subject of criminal proceedings again. She said that her concern was, for instance, that he had also had an affair, implying, I think, that he might leave her again and that she needed some financial security against that. In her oral evidence to me she said that her concern was that Mr Danison might fall ill, or die suddenly, or have some sort of accident. None of those, however, it seems to me, are the concerns that she was expressing to the police at that time. In my view, the only reasonable meaning of what she said to the police is that she had a concern that what she described as the “scenario in the past”, i.e. his being arrested and charged with fraud, might be something that could recur in the future. She might very well have had that concern without knowing specifically what it was that Mr Danison was doing, but it seems to me very likely in the circumstances that she knew enough about Mr Danison to be concerned that his business might not have transformed itself entirely from the fraudulent to the honest, and she was concerned that he might be the subject of criminal proceedings in the future, that there might again be some moves to confiscate assets as a result of those proceedings, and that she should be protected by having funds that were not liable to be seized in the way that what she regarded as her assets had been seized in the past. That, in my view, is the explanation which is most likely to have been at the back of Mrs Danison’s mind in participating in these matters. In those circumstances, in my view, it is clear that her participation was dishonest according to the standards of ordinary people, which is the relevant test.[58]That, of course, is only one element of the claim against her. It is also necessary to show that there was assistance in the fraudulent breach of trust. Mr Flavin submits that there was not in fact any element of assistance because the frauds were complete at the time money was paid, at the very latest, out of the Bluebird account, and the control of funds into and out of the Bluebird account was by Mr Danison and not Mrs Danison. In my view, that is not a sufficient analysis, however. It is an obvious help to the setting up of a fraudulent scheme such as this that the fraudster should have available destination accounts to which the money can be transferred or through which it can be laundered, which served the purpose of frustrating, or impeding at least, the tracing of those funds from the account to which the victims of the fraud initially pay it. It would be very helpful to such a fraudster to have an account which was not, immediately at least, traceable to his name, but under what he might regard as friendly control. In principle, of course, Mr Danison might simply have set up the account in Isabella’s name and not involved Mrs Danison in that account by her being given power of attorney over it. But I have no doubt that it was of assistance to Mr Danison to have Mrs Danison available as a power of attorney with signing authority over that account. One can well imagine that Mr Danison might not have wanted to involve his young daughter directly in transactions which, even if she did not initially suspect them to be fraudulent, she might eventually come to see as suspicious, or indeed to rely on her in the future to do anything that might be necessary as regards dealing with the funds in that account. It might be expected, for instance, that Mr Danison at some stage would have wanted to get his hands on some of his funds himself. How he was to do that has not been explored, but one must assume, I think, that he was unlikely to be committing these frauds on a wholly benevolent basis with the intention that he would not participate in the gains. He seems to have been a person who enjoyed the fruits of money he was receiving, and one might expect that that would continue to be so. He may have thought – this is no more than conjecture – that it would assist him in the future to be able to approach Mrs Danison to deal with funds in the account rather than to have to do so with Isabella.[59]The same, it seems to me, applies to those funds which were paid into the other account in Mrs Danison’s control, being the account in Spain.[60]It follows, in my view, that the claim against Mrs Danison for dishonest assistance is made out. As to the extent of the order that should be made against her, Mr Mather submits that she should be liable for all the sums paid by the claimants, irrespective of whether they went into the Bluebird account or the GRA account, and irrespective of whether they went from the Bluebird account to the Isabella account, or to any other source. That submission I do not accept. It seems to me that, given Mrs Danison’s assistance was in relation to the establishment and operation of the destination accounts, and not, as I have found, with knowledge of the nature of the fraud committed when the funds were paid into the Bluebird account in the first place, that her responsibility should be limited to that amount of the fraudulent proceeds that were paid through the accounts that she was instrumental in setting up. It seems to me that it was only at that point that the assistance that she gave contributed to the fraud that Mr Danison was perpetrating. It would not, for instance, it seems to me, have been just to impose liability on Mrs Danison if the circumstances had hypothetically been that she had set up an account which Mr Danison had intended to launder funds through but he had not in fact used that account at all. It might have been said, in the same way, that her assistance was in general helpful to the general scheme, but it would not, in my view, be fair in those circumstances to make her responsible for payments which had not gone through the route that she had been involved in setting up.[61]So the order I propose to make against Mrs Danison is that she should be obliged to account for all the sums that were paid into the Isabella account, and for that part of the claimants’ money which was paid through the Bluebird account and the Marvel Pride account into the Spanish account at Caixa Catalunya.[62]There is a further point which Mr Flavin raises on the relief available. He submits that, since the liability of the accessory is assimilated to that of a trustee and said to be a liability to account as if trustee for the monies paid away in breach of trust, an account has been given and relief has been obtained by the claimants in the form of the proprietary orders that they have tracing funds into the Isabella account and others. He submits that the beneficiary should be put to an election either to affirm those transactions, although they were initially a breach of trust, and take the proceeds; or to proceed with the personal claim. He does not say that that election has already been made, but submits that it should be made now before any relief should be ordered against Mrs Danison. He did not cite any authority in relation to that, but argued it as a point of principle.[63]The answer to that point is the one that Mr Mather unearthed in Director of the Serious Fraud Office v Lexi [2008] EWCA Crim 1443. The Court of Appeal there was dealing with a somewhat similar contention and made it clear that there may be an election where what the claimant seeks are, in truth, alternative remedies which are inconsistent with each other. But they held that, where the claimant seeks a remedy in tracing into a mixed fund and also seeks a personal remedy against the defaulting trustee, those remedies are cumulative and not alternatives, and there is therefore no question of election arising between them. That, it seems to me, is the position here. The funds of these claimants were mixed with others in the Bluebird account and then passed on in that mixed form to the Isabella account, or indeed to other destinations such as the Marvel Pride account, where they were further mixed. The claimants accept that there is no question of double recovery. To the extent that they do in fact recover from the tracing claims, they will have to give credit against the personal claims that I found they have against Mrs Danison. It seems to me that that order of events would be straightforward. There would be some theoretical complexities, it seems to me, if Mrs Danison were to satisfy the personal judgment against her before the proprietary claims had been fully worked out. I suspect that is a relatively unlikely scenario, and I do not intend to express an opinion on it now. If those difficulties arise, then no doubt they can be dealt with later.[64]I move on to the position of Mr Horowitz. The claim against Mr Horowitz is also put in dishonest assistance and knowing receipt. The amount of it is limited to $250,000 and £155,000, paid by the claimants direct into the Marvel Pride account. It is clear that there were other amounts paid into that account by other people. Mr Horowitz’s estimate was that a total of some £700,000 might have been paid into and out of that account over the period he did business with Mr Danison. It is not suggested that there is any evidence that Mr Horowitz actually knew of the commission of a fraud by Mr Danison, nor, I should say, is it conceded that he did not. The case against him is put that he deliberately turned a blind eye to circumstances which were obviously suspicious. Mr Horowitz, as I have said, is not a director of MPL. He is an agent through whom monies are permitted to be paid into and out of Marvel Pride’s account at HSBC. His evidence was that this was a convenience to Marvel Pride’s clients, and his own clients at least – it may be true in respect of other people – he said were mostly from the Orthodox Jewish community living close to his own office in North London. He said that part of the convenience was that funds could be arranged to be transferred much more quickly than through an ordinary bank account, but I have to say that he did not give a coherent explanation as to why he or Mr Goldman were able to arrange for HSBC to move funds more quickly than any other client with an account at HSBC could do. No doubt it is the case that clients might contact Mr Horowitz or Mr Goldman at any hour, day or night, and no doubt it is the case that one of them might be able to give electronic banking instructions to HSBC. Mr Horowitz said that he did not use a computer himself, but Mr Goldman perhaps does. No doubt it is the case that one way or another those instructions could be passed on to the bank as soon as the bank was available to receive them, but it is hard to see how the bank could make a transfer outside normal banking hours in response to those instructions, whenever they were conveyed. There would, of course, be convenience to the clients in being able to deal with the person that they knew (Mr Horowitz in this case) and have him make all the arrangements thereafter. Other services he provides are cashing of cheques, currency conversion and short-term loans, he explained, as providing for the needs of his clients on an informal and trusted basis. They would approach him with a cheque they required to cash, in circumstances where they might not have a bank account of their own. He would provide conversion from one currency to another at rates which were better, he said, than obtainable from the bank. If a client wished to have funds to complete such transaction but had not yet received the funds that were intended to support it, they might ask him for a short-term loan which could be made from the Marvel Pride account, and the client would then pay money back into that account. All of those services, it seems to me, have a potentially legitimate use. It is no doubt obviously the case that a service on that basis could also be abused by people who wished to conceal the origin of their own funds or their connection with particular transactions. The basis of use of that account amongst a closely connected community may be something of a tradition, and it does not necessarily, it seems to me, indicate that all the transactions that go through that account must be regarded as suspicious. Mr Horowitz said that a commission of, he said, between 2% and 3% – in fact on all of these transactions it seems to have been 3% – is charged, which he divides equally between himself and MPL. That, he accepted, was more than a conventional bank would charge, but he said that he was able, in some instances at least, to give better exchange rates than the bank, so that a client dealing with him for exchange transactions might benefit in that way. Whether his conversion rates were better or worse than the bank is not a matter which I can make any finding on. There is no evidence about it.[65]He provided a partial statement of transactions on the Marvel Pride account on the instructions of Mr Danison beginning in January 2008. He said that he had been introduced to Mr Danison in 2004 by his friend Mr Frankel. Mr Frankel was somebody he had known since childhood who he trusted implicitly and who vouched for Mr Danison as an honest businessman. Mr Danison had not placed any business immediately. He had after a period, I think sometime in 2005, bought a small amount of euros, but there had then been a period, it seems, of a couple of years in which Mr Horowitz had not heard from Mr Danison, but he was contacted again, it seems, in 2007, and started to receive payments. From the statements that have been seen, the first receipt shown is in January 2008 – two payments totalling £15,000 from a company called Dime Rose Investments. There is no evidence as to any connection with the claimants here. In July of that year €119,000 was paid in from Bluebird. All of that amount was paid out in various bank transfers and cash payments to Mr Danison, Isabella Danison and Mr McCook. The balance was down to zero in August 2008, when a series of receipts began to come in, mostly but not exclusively from the claimants in this action, and those amounts were again paid out in various transfers, including £175,000 to Mrs Danison’s Spanish account. Other amounts went to Isabella, and substantial amounts went out in cash to Mr Danison. There were also some payments to the solicitors involved in the Pattenham Manor purchase, presumably for the deposit. I did notice that the sum of $92,000 was paid back to Mr Winkler, one of the original claimants in this action. Other amounts were paid to names that have not cropped up in this claim – apparently the names of businesses.[66]As to what Mr Horowitz was told by Mr Danison, Mr Horowitz’s evidence was that he was told that from time to time Mr Danison would receive amounts paid by a bank transfer and that he wanted, in particular, the convenience of access to cash 24 hours a day. He provided explanations for his need for cash. He said it was partly for foreign travel and partly because Mr Danison himself lent on cash amounts to other people at high rates of interest as one of his many business interests. Mr Horowitz said that he did all the required money laundering checks. He saw Mr Danison’s passport and also, for some reason, that of Isabella Danison. He was provided with a memorandum and articles of a company, Corporate Marketing UK Limited, which Mr Danison said was one of his businesses. At a later stage when he was told by Mr Danison that he would become entitled to commission payments for business placed through what he described as “my company Amkel”, or for the introduction of mortgages, he was given a business card for Amkel and an agreement between Amkel and one of the claimants in this action, referred to as an “Asset Management Agreement”. It seems that none of the payments was specifically linked to those documents, but he was provided with them as evidence of the genuine existence of the companies that Mr Danison said he was dealing with. Mr Danison produced some other evidence of his personal wealth. He showed Mr Horowitz some documents relating to a diamond which he wanted to sell for a figure of $2.9 million. Mr Horowitz showed those to a contact of his in the diamond trade who might have been interested in purchasing it. He said that that contact considered the documents to be genuine and discussed a sale with Mr Danison, but could not agree on a price. Mr Horowitz took a lot of comfort from that, that Mr Danison was indeed a privately wealthy man, as he purported to be.[67]I have no reason to think from the evidence before me that Mr Horowitz is not, in general, providing an honest business service, even if it is one of a slightly unconventional nature. There is no evidence that he knew of Mr Danison’s dishonest background. The suggestion that he ought to be suspicious is based primarily on the facts that it was unusual for somebody like Mr Danison to deal through Mr Horowitz, he was outside the circle of Mr Horowitz’s normal clients, that Mr Horowitz had taken, at best, limited steps to investigate the bona fides of Amkel and all the other companies mentioned. The documents that were provided to him might have suggested that Amkel was doing business and entitled to receive payment, but did not themselves suggest a good reason why payments should be made to Mr Danison personally rather than to Amkel. In my view, it is certainly the case that Mr Horowitz might have had his suspicions aroused by those facts. It seems to me that this is the very subject matter which the Money Laundering Regulations seek to deal with. There are requirements imposed on businesses – Mr Horowitz accepted that he was subject to them himself – to make investigations to satisfy businesses that they are dealing with clients who are who they say they are and are legitimately entitled to the funds that they are receiving and dealing with. Mr Horowitz’s evidence, as I say, was that he had complied with all of those requirements. I have no separate evidence or submissions as to what those requirements were, and therefore nothing to contradict Mr Horowitz’s evidence that he had in fact complied with them.[68]In those circumstances, it seems to me that it would be placing too much burden on somebody carrying out an ostensibly genuine business such as Mr Horowitz’s to require him to go further than the money laundering requirements, unless a particular reason to suspect a lack of bona fides became apparent. The circumstances in this case, it seems to me, may be close to the margin. They are, in my view, circumstances which might have caused him to be suspicious. But they are not, in my view, so strong as to make it inevitable that he should have been suspicious; still less, it seems to me, to lead to the conclusion that, in carrying on dealing with Mr Danison without raising further enquiries, Mr Horowitz was acting dishonestly, and it is dishonesty that is the test here, not anything short of it, and, in particular, not a failure to be sufficiently suspicious.[69]For those reasons, in my view, the claim against Mr Horowitz in dishonest assistance is not made out.[70]As far as the claim in knowing receipt is concerned, the mental standard is less. But it still, in my view, requires knowledge of the commission of a breach of trust, and it is, I think, accepted that Mr Horowitz had no direct knowledge of a breach of trust, and whilst it might be the case that if he had shut his eyes to circumstances of obvious suspicion he might be found to have the requisite degree of knowledge, in my view, for the same reason I gave before, that cannot be said about the circumstances of this case. In any event, had I been prepared to find that he had the necessary mental element required for the claim in knowing receipt, the only amounts received for his benefit were those which he took by way of commission, which on his estimate was about £10,000, which would be very minor in the context of this whole matter.[71]So for those reasons I dismiss the claim against Mr Horowitz. __________

Cited in 1 later judgment