“The above companies, and their subsidiaries, appear to control a substantial part of the Orb Assets [those to which proprietary claims were brought in the 2012 Proceedings] although … the Claimants are presently carrying out due diligence …. to ascertain the full extent of the Orb Assets now within their control. Once this exercise is completed, the Claimants will give appropriate credit in the English Proceedings for the value of the assets recovered. For the avoidance of doubt the English Proceedings will continue against Mr Ruhan as there remain Orb Assets outside of the ‘Arena Settlement’”
“the Minardi SpA” and “the Minardi Deed of Release”
“Mr Stevens is believed to act as nominee for Mr Ruhan and on29 April 2016 the legal proceedings were settled against Mr Ruhan on the basis that a loan note for£73,750,000 was issued to Phoenix … It appears that this payment is a sham and has been structured by Mr Ruhan so that he will evade liabilities he may have to HMRC and others. Since the primary claim was against Mr Ruhan the payment to Phoenix … appears to have been directed by Mr Ruhan ..”
“A beneficiary of a trust is entitled to a continuing beneficial interest not merely in the trust property but in its traceable proceeds also, and his interest binds every one who takes the property or its traceable proceeds except a bona fide purchaser for value without notice. … Tracing is thus neither a claim nor a remedy. It is merely the process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property. Tracing is also distinct from claiming. It identifies the traceable proceeds of the claimant's property. It enables the claimant to substitute the traceable proceeds for the original asset as the subject matter of his claim. But it does not affect or establish his claim. That will depend on a number of factors including the nature of his interest in the original asset. He will normally be able to maintain the same claim to the substituted asset as he could have maintained to the original asset. If he held only a security interest in the original asset, he cannot claim more than a security interest in its proceeds. But his claim may also be exposed to potential defences as a result of intervening transactions. Even if the plaintiffs could demonstrate what the bank had done with their money, for example, and could thus identify its traceable proceeds in the hands of the bank, any claim by them to assert ownership of those proceeds would be defeated by the bona fide purchaser defence.”
“There is a mixed substitution when the sum standing to the credit of the bank account is not wholly attributable to payments into it from one source. That will be so if that sum is attributable in part to payments into the account of the account holder’s own beneficial money and in part to money held by him in trust, or where that sum is attributable to payments into the account from different trusts.”
“In principle, there are three techniques which could be applied in order to determine how the shortfall in the notional blended fund should be borne by the ultimate recipients, all of whom are equally blameless for the mismanagement of the Dove Trust which has led to the shortfall. The first technique is to apply the rule in Devaynes v Noble ; Clayton's Case (1816) 1 Mer 572 whereby payments out of an account are attributed to payments into the account in the order in which the payments in were made, or in other words on a “first in, first out” basis. The second technique is to divide the remaining money between the recipients in proportion to the amounts which they are owed. This solution, where distribution is made on a rateable, or pari passu, basis, has frequently been adopted in recent years where the claimants on the fund are all the victims of a common misfortune. It also has the great advantage of being simple and inexpensive to implement. The third technique, which has been considered in a number of English authorities but never yet applied in practice in this jurisdiction, is to apply the ‘rolling charge’ or ‘North American’ methodology, which combines the pari passu approach with the lowest intermediate balance principle. Its effect is that the position has to be analysed whenever a payment is made out of the fund, and no contributor can be paid more than his rateable share of the lowest intermediate balance while his money remained in the fund.”
“There is no doubt that Lord Wilberforce contemplated that the investigation of the question of ‘good faith’ in its context in the definition of ‘purchaser’ in section 205(1)(xxi) of theLaw of Property Act 1925 might involve an investigation of motive. In Midland Bank Trust Co Ltd v Green was no doubt that the purchaser had knowledge of the interest the defeating of which was the whole purpose of the transaction, and the passage in Lord Wilberforce's speech is intended to point up the difference between the definition of ‘purchaser’ in theLand Charges Act 1925 (where the crucial words do not appear) and that in the Law of Property Act. There are no cases where such an investigation has been carried out, and the natural meaning of the words certainly suggests that the principal matter affecting ‘good faith’ is notice, as it was in Pilcher v Rawlins (1872) LR 7 Ch App 259 itself. But in any event, it seems to me that it is relevant to ask, good faith vis-a-vis whom? What makes this case unusual is that the lack of good faith has nothing to do with the Corbetts, but has only to do with the Halifax, whose internal rules were dishonestly broken by Mr Deakin. The lack of good faith is thus immaterial to the Corbett's interests, and did not affect those interests. I do not consider that Lord Wilberforce meant that a purchaser for value who has neither actual nor constructive notice of an impropriety connected with the exercise of the power of sale is nonetheless affected by that impropriety merely because of a lack of good faith that has no connection with the impropriety.”
“It is not necessary that the purchaser should obtain the legal estate and have the same vested in himself. It is sufficient if he has the legal estate transferred to a trustee or nominee for him. Provided that neither he nor his nominee has notice of the prior equitable interest, he will take free from it, for he has the better right to the legal estate.”
“A transferor who delivers to a transferee a share certificate together with an executed transfer may still retain the legal estate for the time being, but he has done everything in his power to vest it in the transferee, while the transferee for his part has it within his own power to vest the legal estate in himself without further recourse to the transferor. As between the transferee who has given value on the one hand and the transferor and those claiming under him on the other, this rather than the time when the transferee actually obtains the legal title is to my mind the appropriate time for the question of notice to be tested.”
“The question whether the recipient of the legal title had notice is to be determined at the time of acquisition of that title, at the latest. The cases in which an earlier date may be relevant do not matter for present purposes and I will ignore that possibility. I am not aware of any circumstances in which the question whether the recipient had notice could be affected by anything that happened later. That is because it is a question of fact.”
“[N]otice in the commercial context will [not] necessarily be equated with actual knowledge, but the purchaser may be fixed with notice, in the absence of actual knowledge, only where in the particular commercial context involved he has failed to draw inferences which ought reasonably to have been drawn in that context or has been put upon inquiry by knowledge of suspicious circumstances indicative of wrongdoing on the part of the transferor, but has failed to make inquiries that are reasonable in the circumstances. The defendant will have notice where the inferences to be drawn from his knowledge are such that he should have appreciated that a proprietary right (as distinct from mere claim) probably existed, or where the facts known to the defendant, including facts as to the commercial purpose of the transaction as well as the source of the relevant funds or property, would have given a reasonable person in the position of the defendant serious cause to question the propriety of the transaction and thereby put the defendant on inquiry, but none or none sufficient in the circumstances was made.”
“should either have appreciated that a proprietary claim probably existed or should have made inquiries or sought advice, which would have revealed the probable existence of such a claim ”
“[w]e are in the realm of property rights, and are not concerned with an actionable duty to investigate.”
“Has the appellant, the present vendor, shewn – as the burden is upon him to shew – that, having bought this land for value, he bought without notice of this incumbrance?”
“On the authority of Lord Browne-Wilkinson’s speech in the O’Brien case[1994] 1 AC 180 and on well-established equitable principles, the burden is not on Mrs Boulter to plead and prove that the bank had constructive notice: it is on the bank to plead and prove that it did not have constructive notice … It is well-established at this level of decision that the doctrine of bona fide purchaser for value without actual or constructive notice is a defence which can be raised to defeat a claim of an equitable right or interest and that the burden is on the person raising that defence to plead and prove all its elements: it is a ‘single defence’…”
“A man can contract to assign property which is to come into existence in the future, and when it has come into existence, equity, treating as done that which ought to be done, fastens upon that property, and the contract to assign thus becomes a complete assignment. If a person contract for value, e.g., in his marriage settlement, to settle all such real estate as his father shall leave him by will, or purports actually to convey by the deed all such real estate, the effect is the same. It is a contract for value which will bind the property if the father leaves any property to his son.”
“But if a vendor or mortgagor agrees to sell or mortgage property, real or personal, of which he is not possessed at the time, and he receives the consideration for the contract, and afterwards becomes possessed of property answering the description in the contract, there is no doubt that a Court of Equity would compel him to perform the contract, and that the contract would, in equity, transfer the beneficial interest to the mortgagee or purchaser immediately on the property being acquired.”
“As soon as they [the future choses in action] come into existence, assignees who have given valuable consideration will, if the new chose in action is in the disposal of their assignor, take precisely the same right and interest as if it had actually belonged to him, or had been within his disposition and control at the time when the assignment was made.”
“… merely provides at clause 1 that the Settlement Consideration would be treated as ‘Proceeds received as a result of Success in the Proceedings’ as referred to in clause 9.1 of the [Harbour IA] such that they should be applied in accordance with clauses 9.1(a) [to] (f) of the [Harbour IA]. The Harbour Deed … does not provide that the Settlement Consideration would be held on trust pursuant to clause 8.1 of the [Harbour IA].”
“… by Clause 9.1 … of the [Harbour IA], [Harbour] and the [Orb] Claimants agreed the terms upon which the [Orb] Claimants should apply recoveries made in the proceedings and the extent of [Harbour’s] interest in those recoveries, which the Claimants agreed to hold on trust for [Harbour] ”
“The question arises how far the existence of dispositive powers vested in the trustees (or others) will prevent the beneficiaries from terminating the trusts under the principle of Saunders v Vautier . In the case of a discretionary trust, each of the objects as an individual has no more than a right to the due administration of the trust, including a right to proper consideration; but it is nonetheless clear that, as long as the class of objects has closed, the trust can be terminated by all of them acting together. The fact that the objects do not have absolute and indefeasible interests, indeed do not have interests in the strict sense at all, makes no difference: it is sufficient if they are the only persons entitled to the due administration of the trust. So if a settlement includes both fixed interests and a discretionary trust the consent of the discretionary objects in addition to that of the beneficiaries with the fixed interests will be required for a termination.”
“When income is received by the trustees of a discretionary trust of income, the sole object of a class which is not yet closed cannot in my judgment claim an immediate entitlement to that income. It is always possible that before a reasonable time for the distribution of that income has elapsed another object will come into existence or be ascertained and have a claim to be considered as a potential recipient of the benefit of that income. So long as that possibility exists, the sole object's entitlement is subject to the possibility that the income will be properly diverted by the trustees to the future object once he comes into existence or is ascertained. Indeed, in strictness the entitlement of the sole object is only an entitlement that the trustees should consider whether to pay income to him. In respect of income already received it may be possible to say that such an entitlement has arisen, but for present purposes I must consider the position immediately before the death of the settlor not in relation to income previously received by the trustees but in relation to the settlor's rights to income then or thereafter accruing. Such income as it accrued was subject to the possibility that it could properly be withheld by the trustees from the settlor and diverted to a future beneficiary, unlikely though the possibility of such a beneficiary coming into existence or being ascertained undoubtedly was in the present case. On that footing the settlor did not immediately before his death have an interest in possession.”
“Rather than amounting to evidence that Stewarts were complicit in facilitating the alleged iniquity or deceived into being an instrument to perpetrate the iniquity, in my view the emails demonstrate that Stewarts/Isle of Man counsel were giving legal advice as to the risks inherent in what was proposed. It seems to me therefore that the emails cannot be said to show that Stewarts were acting outside the normal scope of professional engagement. Stewarts were performing their proper professional role of giving advice on the risks of the transaction”
“That is what I have said, yes. That must have been what I believed”
“On Completion, this Deed will constitute the full and final settlement of, and the Parties will thereby have released and forever discharged, all and/or any actions, or claims, rights, demands, defences and set-offs … that the Parties or their Affiliates or any of them ever have had, may have or hereafter can, shall or may have against any other Party or any of their Affiliates arising out of or connected with: 6.1.1 the Claims … 6.1.9 the Arena Assets.”
“any actions, claims, rights, demands and set-offs … arising out of or connected with the same facts giving rise to the English Proceedings or the Freezing Injunction Application …”
“Connections may exist in an infinite variety of forms and degrees. Only the context can indicate which of these connections is meant. The need to examine the context is not obviated by the use of intensifiers like ‘in any way’. I accept Mr Eder's submission that such words indicate an intention that the concept of connection should be broadly construed. But they cannot be read literally, or else they will include connections such as Fluellen found between Harry Monmouth and Alexander of Macedon: ‘There is a river in Macedon, and there is also moreover a river at Monmouth … and there is salmons in both.’ It is therefore still necessary to limit the connections to those which are relevant for the purpose in hand.”
“It is a common consequence of a determination to make sure that one has obliterated the conceptual target. The draftsman wanted to leave no loophole for counter-attack by the recipient or intended recipient of a call. It is no justification for construing the language so as to apply to a situation which, on a fair reading of the general purpose of the clause was not within the target area.”
“2.2 Both Parties agree to complete or procure the completion of the Conditions Precedent on the date of this Agreement. 2.3 [SMA] and Minardi hereby agree to take all necessary actions that are required to conclude the liquidation of the Arena Estate in a timely manner and distribute the Assets and cash of the relevant liquidations of the Arena Holdcos and the Arena Estate in the manner prescribed under the terms of this Agreement. In particular, irrespective of any other right or entitlement, Minardi will receive 50% of all distributions made by the Liquidators except those made to the following third parties: TMP, Philip Barton, Franek Sodzawiczny and Abry Partners. 2.4 Dr Cochrane, as ultimate beneficial owner of [SMA], undertakes to procure the direct payment to Phoenix from the Liquidators in prepayments of her debt to Phoenix under the Loan Note all payments to [SMA] or related parties are entitled to receive under this Agreement and [SMA] as shareholders of the Arena Holdcos. 2.5 There are five (5) members in the creditor committee of the Arena Holdcos. [SMA] and Minardi shall be entitled to have each two (2) representatives in the creditor committee of the Arena Holdcos, with the fifth to be an independent agreed between [SMA] and Minardi. If [SMA] and Minardi fail to agree, the fifth member shall be appointed by the Liquidators. 2.6 [SMA] and Minardi shall direct the Joint Liquidators to make payments as described in clauses 2.3 and 2.4 above. In this respect, they undertake to inform the Joint Liquidators in writing that they entered into this Agreement as per schedule 4. 2.[7] The Parties have agreed that as soon as practicable, the Minardi Reserved Assets will be transferred by the Liquidators to Minardi in one or more transfer(s). [SMA] undertakes to give whatever directions is [sic] required to the Liquidators to facilitate such transfer, including for the avoidance of doubt, the exercise of their votes on the creditors committee and provide the Liquidators with any required release. 50% of the respective values (as listed in schedule 3) for each asset effectively transferred to Minardi will be applied as a prepayment of the Loan Note.”
“In particular, the parties to the Agreement have agreed that irrespective of any right or entitlement, Minardi is entitled to receive 50% of all distributions from the Arena Estate made by the Joint Liquidators, save for any distributions made to TMP, Philip Barton, Franck Sodzawiczny and Abry Partners. Moreover, Dr Cochrane, as ultimate beneficial owner of SMA, undertook to procure that all payments SMA or its related parties are entitled to receive under the Agreement or as shareholder of the Arena Holdcos be made by the Joint Liquidators directly to Phoenix, the parent company of Minardi.”
“2. The lodging of a notice of dismissal in the agreed form between the Orb Claimants and Mr A J Ruhan in the High Court in relation to proceedings (together 'the Proceedings'). 3. The execution of a non-sue, mutual hold harmless and mutual assistance deed of agreement as between Dr G M Smith Dr G A Cochrane and Mr A J Ruhan.”
“The terms of this Agreement, and the substance of all negotiations in connection with it, are confidential to the parties, who shall not disclose them to, or otherwise communicate them to, any third party, including but not limited to Simon Cooper and/or Simon McNally, without the prior written consent of the other parties other than: 6.1.1 to the parties' respective auditors and lawyers on terms which preserve confidentiality; 6.1.2 as far as necessary to implement and enforce any of the terms of this Agreement; 6.1.3 pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure.”
“[Dr Cochrane], as ultimate beneficial owner of [SMA], will procure direct payment by the Liquidators to [Phoenix] of all payments [SMA] or related parties are entitled to receive under the [LICSA] and [SMA] is entitled to receive as shareholder of the Arena Holdcos. Any such payments received by [Phoenix] shall be applied as prepayments in respect of the Note.”
“(3) Any surplus assets remaining after payment of the costs, expenses and claims [of creditors (including interest) and the liquidators] shall be distributed to the members in accordance with their rights and interests in the company.”
“But, says the Lord Chief Justice, ‘the document does not, on the face of it, purport to be an assignment nor use the language of an assignment.’ An equitable assignment does not always take that form. It may be addressed to the debtor. It may be couched in the language of command. It may be a courteous request. It may assume the form of mere permission. The language is immaterial if the meaning is plain. All that is necessary is that the debtor should be given to understand that the debt has been made over by the creditor to some third person.” iii) That passage has been cited and applied on a number of occasions including by the Court of Appeal in Burridge v MPH Soccer Management Ltd[2011] EWCA Civ 835 . In Burridge the Chancellor made it clear at [19] that the question of whether a written document effects an assignment “is a question of construction to be determined in the light of the circumstances then prevailing”
“The difficulty is, however, that the direction to the obligor may be merely a revocable mandate and not an assignment, that is to say, it may merely be an authority given to the obligor to act on behalf of the alleged assignor, which authority may be revoked up to the time the obligor acts on it. For an assignment, there must be a clear expression of an intention to make an immediate and irrevocable transfer of the chose to the assignee …. It must be plain that the assignor intends by the request to divest himself of the chose and vest it in the assignee. The intention must be determined objectively: the subjective intention of the assignor is irrelevant. The test is how the direction would be understood by a reasonable obligor, having regard to the words used, the nature and purpose of the transaction and the relevant surrounding circumstances...”
“The subject-matter of the assignment must be capable of ascertainment and identified with sufficient certainty to establish what is being assigned. If a creditor simply instructs his debtor to pay a sum of money to a third party, but does not specify the debt or fund out of which payment is to be made, the instruction will fail as an assignment. But an order to pay out of money owed by the debtor to the creditor or out of a specific fund coming to the debtor may be an assignment. Where the whole of a debt or fund is assigned, it is not necessary to state the amount. If part of a debt or fund is being assigned, it may be expressed as a monetary amount or as a fraction or percentage of the debt or fund. However, an assignment of an indeterminate portion of a debt or fund would fail for uncertainty. It is also necessary to determine that the claimed right was included in the assignment.”
“The key Hohfeldian point that all legal relations exist only in relation to specific other parties is highly relevant here. In the example just discussed, it might be said that, owing to the terms of the particular trust, T has no power to dispose of the trust property without the consent of X; but that simply means that T has no power in relation to B to extinguish B’s right by making such a disposition. T does not need to rely on the terms of the trust to have a power in relation to C to transfer the trust property to C; rather T (and C) can simply rely on the fact that T holds the trust property.”
“Take the case where A enters into successive contracts for the sale of Blackacre, first to Y and then to Z. Hasn’t A created two trusts over the same asset, with Y’s merely having priority over Z’s? If that is the right analysis it would suggest that A is a residual claimant, for he retains an interest in the trust asset that is sufficient to declare a trust in Z’s favour, even though the entire beneficial interest has been created in Y’s favour by the first trust. I dispute that this is the correct analysis of this fact situation …. Cases such as Re Hay’s Settlement Trusts tell us so. Those cases concern the validity of an exercise of a power to dispose of trust assets by transferring them to a new settlement; a bad exercise is considered null and void, there is no whiff of a ‘priorities’ analysis … A fortiori , a trustee declaring a trust of the asset he holds in favour of some third party, when he has no power to do so under the terms of the trust, does nothing at all Such a declaration would be no more effective to displace B’s interest under a trust than would my contract to sell you London Bridge displace the interest of whoever has title to sue. I have no power to sell London Bridge because I don’t own it, and the trustee has no power to declare a trust of assets in which, in the eyes of equity, he has no beneficial interest”
“While a beneficial owner of property can declare a trust of it simply because he is the beneficial owner, a trustee cannot do that. It would be a gross breach of trust for a trustee to defy the terms of the trusts on which he held certain assets by attempting to hold them for some third party. Any attempt to do this would therefore be necessarily ineffectual, though other principles of law (such as estoppel) might give some limited effect to the purported declaration.”
“A transferee of the legal title to property under a disposition made in breach of trust, or a successor in title to such a person, does not have the beneficial title to the property, which remains held on the original trusts, unless either the transferee, or a successor in title, was a bona fide purchaser for value without notice. The trustee acting in breach of trust can transfer the legal title, but cannot vest the beneficial interest in the property in a bona fide purchaser for value without notice, since he does not own that title and is not acting in a way which enables him, under the trust, to overreach the beneficiaries' equitable interest.”
“As to what constitutes ‘property’, this is always ‘heavily dependent on context … something can be ‘proprietary’ in one sense while also being non-proprietary in another sense’, M Conaglen, ‘Thinking about proprietary remedies for breach of confidence’ [2008] Intellectual Property Quarterly 82, 89, referring to R Nolan, ‘Equitable Property’ (2006) 122 LQR 232, 256–257. As the Chancellor noted 16 ITELR 808 , para 62, there is a school of thought (which can be dated to F W Maitland, Equity—a Course of Lectures (1936)) which analyses the equitable interests created by a common law trust not as proprietary, but as personal or ‘obligational’, even as against third parties. The issue ‘whether trusts are properly seen as part of the law of property or as an aspect of the law of obligations’ is described in Burrows, English Private Law , 3rd ed (2013), para 4.140 as a ‘difficult question’, see also Burrows, The Law of Restitution , 3rd ed (2011), pp 191–193, Nolan, ‘Equitable Property’ 122 LQR 232. Supporters of a personal analysis include B McFarlane, The Structure of Property Law (2008); see also G Watt, ‘The Proprietary Effect of a Chattel Lease’ [2003] Conveyancer and Property Lawyer 61. A recent discussion of the pros and cons of each analysis appears by P Jaffey in ‘Explaining the Trust’ (2015) 131 LQR 377. Jaffey concludes that, although a trust involves personal rights against the trustee, only a proprietary analysis explains satisfactorily those aspects which concern the beneficiary's position vis-à-vis third parties, such as the trustee's creditors and recipients of unauthorised transfers of trust property. As before the Chancellor, so before the Supreme Court, the parties were content to proceed on the basis of the ‘conventional’ analysis that a trust creates a proprietary interest, at least to the extent that such an interest is capable of existing and being recognised in the relevant asset. In this judgment, I am also content, without expressing any view about the appropriate analysis, to proceed on the same basis.”
“What is clear, on any analysis, is that, where a trust exists, the legal and beneficial interests are distinct, and what affects the former does not necessarily affect the latter. Where an asset is held on trust, the legal title remains capable of transfer to a third party, although this undoubted disposition may be in breach of trust. But the trust rights, including the right to have the legal title held and applied in accordance with the terms of the trust, remain. They are not disposed of. They continue to be capable of enforcement unless and until the disposition of the legal title has the effect under the lex situs of the trust asset of overriding the protected trust rights. If the trust rights are overridden, it is not because they have been disposed of by virtue of the transfer of the legal title. It is because they were protected rights that were always limited and in certain circumstances capable of being overridden.”
“A purchaser who enters into a specifically enforceable contract for the sale of land acquires an equitable interest in the land and retains that interest for as long as the contract remains enforceable. On making pre-completion payments on account of the price the purchaser acquires also an equitable lien on the land to secure their repayment (subject to any set-offs and the possible forfeiture of the deposit) if the contract goes off. Mr Samaroo's equitable interest in the present case arose on3 November 1980 , the date of the agreement. Mr Sookraj acquired an equitable interest on8 January 1981 , the date of his agreement, and further equitable interests when he made payments on account of the purchase price payable under his agreement. But Mr Samaroo's equitable interest, being earlier in time, has priority over all these equitable interests of Mr Sookraj .”
“We were pressed with the argument that, in the classic Dearle v Hall case, the assignor has no beneficial interest at the time he makes the second assignment and is, indeed, constructive trustee for the first assignee. I do not think that the rule would be restricted beyond its intendment or present effect if it were held to apply only where, at the time of the assignment, the assignor had a beneficial interest or had no beneficial interest only because he voluntarily divested himself of it. Put negatively, the rule does not apply where the assignor had no beneficial interest and had not deprived himself of one by voluntarily divesting himself of it”, Lord Reid, who dissented, did not regard this distinction as persuasive, stating at p.19 that: “I have great difficulty in regarding it as a significant distinction that the bankrupt in this case never had a beneficial right whereas the assignor in the typical Dearle v Hall case had a beneficial interest until he assigned it to the first assignee … The assignment to [the first assignee] completely divests the assignor. In both the typical Dearle v Hall case and the present case, the assignor had nothing at all to give when he made the second assignment, and I have difficulty in finding any sufficient reason why the position of the second assignee should be improved by the historical accident that his assignor once had some right which he had no longer at the time when he made the second assignment”
“That which is agreed to be and ought to be done is treated as having been done and carrying with it in equity the attendant rights. But the intended lessee's equitable rights do not in general arise when that which is agreed to be done would not be ordered to be done.”
“As soon as [the future book debts] come into existence, assignees who have given valuable consideration will, if the new chose in action is at the disposal of the assignor, take precisely the same right and interest as if it had belonged to him, or had been within his disposition and control at the time when the assignment was made”
“I think the law stands in this way, that when two deeds are executed on the same day, the Court must inquire which was in fact executed first, but that if there is anything in the deeds themselves to shew an intention, either that they shall take effect pari passu or even that the later deed shall take effect in priority to the earlier, in that case the Court will presume that the deeds were executed in such order as to give effect to the manifest intention of the parties .”
“…where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole. It is not open to third parties to treat each one of them as a deed representing a separate and independent transaction for the purpose of claiming rights which would only accrue to them if the transaction represented by the selected deed was operative separately. In other words, the principles of equity deal with the substance of things, which in such a case is the whole transaction, and not with unrealities such as the hypothetical operation of one of the deeds by itself without the others.”
“P&M accept that the Loan Note does not create any proprietary rights to any Relevant Property or any of the Identified Underlying Assets. The obligations arising under it are personal to Dr Cochrane, and Phoenix will have to claim in her désastre for the outstanding debt …”
“(v) A trustee is entitled to procure debts properly incurred as trustee to be paid out of the trust estate or, if he pays it in the first instance from his own pocket, to be indemnified out of the trust estate: In re Blundell(1888) 40 Ch D 370 , 376. To secure his right of indemnity, the trustee has an equitable lien on the trust assets: Lewin on Trusts , 19th ed (2015), para 21-043. Because an equitable lien does not depend on possession, it normally survives after he has ceased to be a trustee: In re Johnson(1880) 15 Ch D 548 , 552. (vi) A creditor has no direct access to the trust assets to enforce his debt. His action is against the trustee, who is the only person whose liability is engaged and the only one capable of being sued. A judgment against the trustee, even for a liability incurred for the benefit of the trust, cannot be enforced directly against trust assets, which the trustee does not beneficially own. The creditor's recourse against the trust assets is only by way of subrogation to the trustee's right of indemnity: In re Johnson . (vii) Because the creditor's recourse to the assets is derived from the trustee's right of indemnity, it is vulnerable. It is exercisable only to the extent that that right exists. It may be defeated if there are insufficient trust assets to satisfy his debt, or if the trustee's right of indemnity is defeated, for example because the debt was unreasonably or improperly incurred and the indemnity does not extend to such debts, or because the trust deed excludes it on account of the trustee's wilful default or gross negligence. More generally a breach of trust by the trustee, even in relation to a matter unconnected with the incurring of the relevant liability, will, to the extent that it creates a liability to account on the part of the trustee, stand in the way of the enforcement of the indemnity. As has frequently been observed, this can be hard on the creditor, who will usually have no knowledge of the state of account between the trustee and the beneficiaries. But the creditor can in principle protect his position, for example by taking a fixed charge over the trust assets, or, as in the present case, by stipulating for a personal guarantee from the principal beneficiary…”
“(1) A trustee— (a) is entitled to be reimbursed from the trust funds, or (b) may pay out of the trust funds, expenses properly incurred by him when acting on behalf of the trust...”
“To be entitled to an indemnity the costs and expenses in question must have been properly incurred by the trustee. This is axiomatic, but if authority is needed it can be found in Turner v. Hancock(1882) 20 Ch D 303 , 305, where Sir George Jessel M.R. refers to the trustees' right to receive out of the trust fund ‘all their proper costs incident to the execution of the trust’…”
“29. All of this discussion brings one back to the question of whether the costs incurred by trustees in defending an action or arguing a point in the particular circumstances were expenses ‘properly incurred’ when acting on behalf of the trust. It seems to me that ‘properly incurred’ should be interpreted to mean ‘not improperly incurred’. This was the way in which Lindley LJ approached trustee indemnity in Easton v Landor (1892) 62 L.J. Ch 164 and in In re Beddoe, Downes v Cottam(1893) 1 Ch 547 . See also In re Grimthorpe Dec'd[1958] Ch 615 per Danckwerts J at 623. … 31. It seems to me, therefore, that if a breach of trust causing loss to the trust fund or other misconduct is established against the trustee, the trustee may be deprived of his indemnity depending upon all the circumstances. Misconduct in this context should be construed widely to include not only misconduct in the sense of dishonesty but also conduct which is unreasonable in the circumstances. It does not extend, however, to a mere mistake on the part of the trustee: see Lewin on Trusts , 19th ed. para 27-112…”
“Subject to the Overriding Objective, the Claimants shall have control over the conduct of the Proceedings and have the right to conduct the Proceedings as they consider appropriate, including the right: (a) To compromise the Causes of Action and/or the Proceedings against any Defendant on any terms they consider appropriate; and (b) To abandon, withdraw or discontinue the Proceedings or any part of the Proceedings.”
“9.1. Subject to clause 9.3, the Claimants shall apply or instruct the Legal Representatives to apply any Proceeds received as a result of Success in the Proceedings, and which it holds on trust, in the following order immediately upon receipt of such Proceeds: … 9.2. Until such time as all amounts payable to HF2 under this Agreement have been made, the Claimants shall not be entitled to deduct from Proceeds received as a result of Success in the Proceedings any charges, fees, taxes (including Corporation or Pay As You Earn taxes) incurred by any other party including the Defendant(s) in connection with the proceedings unless such fees fall within the definition of Claimants’ Legal Costs. Nor shall the Claimants be entitled to apply any set-off in relation to monies owed to the Defendant whether or not owed to the Defendant in relation to the Proceedings.”
“Provided that nothing in this Agreement shall oblige any of the Claimants to take any step which may prejudice the conduct of the Proceedings and in particular the maintenance of privilege, the Claimants will take such action as HF2 and its advisers may reasonably request to enable HF2 to have knowledge about the conduct of the Proceedings (but without HF2 thereby acquiring any right to interfere in the Claimants’ conduct of the Proceedings). Accordingly each of the Claimants undertakes that it or he will, and does hereby direct its or his Legal Representatives (which direction is hereby acknowledged by the Legal Representative) to: … (c) Give HF2 prior written notice if they propose to take in the Proceedings any step specified in clauses 6.2(a) or 6.2(b). … (i) In the event any Claimant receives an offer of Settlement, whether in oral or written form, from one or more of the Defendants, immediately notify the Legal Representatives and HF2 of such offer and instruct the Legal Representatives to provide a written recommendation on whether to accept such offer and immediately provide a copy of such offer and recommendation to HF2. (j) Not enter into any new agreement or arrangement which does not acknowledge the enforceability of this Agreement and the rights of HF2 hereunder…”
“66. I would only add that if, contrary to the view which I have just expressed, I did have a discretion to leave Mr Szepietowski's personal assets out of account, I would not consider it appropriate in the circumstances of the present case to do so. The Heritage Investment Trust could hardly be more shadowy, and there is no evidence before me that Mr Szepietowski ever properly exercised any of the functions or duties of a trustee in the years between the establishment of the trust in 1999 and the 2008 consent order (which provided for Mr Szepietowski to retire as trustee, although in the event SOCA has been unable to find anybody willing to replace him) … 68. In short, there appear to me to be strong prima facie grounds for suspecting that the whole trust arrangement was a sham, and at all material times Mr Szepietowski held the purported trust property as Mr Mitchell's nominee. If he wishes to be treated as a bona fide trustee today, it seems to me that it is incumbent on him to dispel that suspicion and to produce solid evidence that he has in the past behaved as a real trustee of real trust property.”
“[The] authorities shew that what is recovered by the action of the solicitor is to be treated as if he had earned salvage, and that he is to be paid for his services on the theory that salvage services have been rendered. It is not necessary that the property charged should belong to the same person as employed the solicitor; but it must be by reason of the employment that the property is preserved. Here undoubtedly the property was preserved by the action brought by these solicitors on behalf of the Plaintiff, and but for the proceedings taken by them the mortgagee would have lost her security”
“Again, it is not a question of notice, because every man who knows there is a fund in Court, knows also that it is liable to the lien for costs of the solicitor, through whose exertion the fund has been obtained, and the assignee has the benefit of those exertions as well as the assignor … This Act declares the Court shall have power to declare that the solicitor is entitled to a charge for his costs, and that all conveyances to defeat it, unless to a bonâ fide purchaser for value without notice, shall be void. My opinion is that where a man knows that there is a fund in Court, he knows also that it is subject to the solicitor's lien for his costs in recovering it, and that he is entitled to be paid in the first instance. The Act, however, clearly points out that there may be a bonâ fide purchaser who may have priority”
“Win, Won etc shall mean that the Claim is Finally decided in the Lay Client’s favour … Where the Claim is not a money claim, Win will be defined by reference to the remedy or result sought. For the avoidance of doubt, a compromise that achieves the same ends as that remedy or result will amount to Win”
“The Settlement Parties do not intend to release or otherwise extinguish their claims to any of the Settlement Assets, the Jersey Settlement Assets, the Arena Property and/or the Arena Settlement Assets (and all such claims shall continue to exist so that they can be enforced for the benefit of the Settlement Parties pursuant to this Agreement) save that such claims shall as between the Settlement Parties be compromised pursuant to the terms of this Agreement”. ii) Further, clause 2.3(i) of the 2019 Settlement Agreement provided that “the Settlement Parties do not intend to compromise their personal or proprietary claims against any Third Party or any Non-Settlement Parties” (such that there could be no settlement of Stewarts’ claim for costs against Messrs Thomas and Taylor). iii) Clause 5, which sets out how proceeds recovered by any of the Settlement Parties would be distributed among the Settlement Parties inter se , recorded that Stewarts’ claims was limited to£8m , which was described as “the maximum value of Stewarts’ claim as set out in paragraph 3 of its Statement of Case dated22 November 2017 ”
“Whether a person has knowledge is for lawyers essentially a jury question. The meaning of knowledge has perplexed philosophers from Plato (and no doubt before) to after A J Ayer, and been said by some to be ultimately unanswerable. But as a matter of law and everyday understanding some points are reasonably clear. First of all, I reject Miss Bucknall's submission that a party must be taken to know whatever he could properly plead. The submission cannot be accepted, even if attention is confined to dishonest conduct which, under the Code of Conduct of the Bar of England and Wales, requires a pleader to have ‘... before him reasonably credible material which as it stands establishes a prima facie case.’ At the other extreme, knowledge is not to be equated with absolute certainty, itself an ultimately elusive concept. The impossibility of doubt which Descartes found only in the maxim ‘I think, therefore I exist’ is not the criterion of legal knowledge. For practical purposes, knowledge pre-supposes the truth of the matters known, and a firm belief in their truth, as well as sufficient justification for that belief in terms of experience, information and/or reasoning. The element of regression or circularity involved in this description indicates why knowledge is a jury question.”
“This note focuses on the sale of the three large hotels that surrounded Hyde Park, the former Lancaster Gate, Kensington Park and Kensington Palace Thistle hotels (the ‘Hyde Park Hotels’) which were acquired by Orb for their residential development potential. Twenty months after the Agreement was concluded in March 2005, Mr Ruhan arranged for HPII, the legal owner of the three Hyde Park Hotels, to enter into a business sale agreement wherein HPII agreed to sell to the Cambulo Madeira group of companies the three hotels for a total price of£126 million , a sum that was equivalent to the underlying debt advanced by Morgan Stanley at the time of their original acquisition. Mr Ruhan had secretly caused Cambulo Madeira to be incorporated in the early part of 2005 upon the Island of Madeira for that purpose.”
“In 2007, Mr Ruhan was introduced by Mr Campbell to a residential development, construction and sale and leaseback opportunity within the Pearl scheme in Doha, Qatar which involved the construction of approximately 16 residential towers. To fund the project, Mr Ruhan again approached Investec Bank who agreed to advance$141 million secured upon Mr Ruhan’s interests in Euro Estate Holdings Limited and Cambulo Madeira and its Hyde Park Hotel assets. That facility is evidenced by an Investec Deed which we have a copy of which shows Euro Estates Holdings as one of the Obligers. The Mood Facility was advanced to Mr Ruhan on the21 December 2007 with the funds being transferred to Unicorn Worldwide Holdings Limited, an important sub holding company of Mr Ruhan’s Isle of Man structures. In July 2007, Mr Ruhan obtained final planning consent for residential conversion of the Kensington Park and Kensington Palace hotels and entered into negotiation, aided by the Candy brothers to sell the sites to Abu Dhabi interests. On26 March 2008 , De Vere Estates, a company owned by members of the Abu Dhabi ruling family completed their purchase of the Kensington Park and Kensington Palace hotels for£320 million .”
“On the basis of the information provided by the [Orb Claimants] and your previous personal statements, I have cause to suspect the statement that those hotels were disposed of to Cambulo as an (unrelated) third party cannot be correct. Given the common ownership (direct/indirect and/or through persons acting in concert) and control evidenced by the documents and events referred to above, I am unable to reconcile the various disclosures contained in the HPII accounts and your director’s legal obligations under FRS8 and Companies Act sections 317 and 320 amongst others…”
“Your lack of denial, the claimant’s evidence, coupled with the comments that you made to Hock Chan and I in August would indicate the Hotel sales were to related parties and you can only have done so having deliberately misled the auditors, Morgan Stanley and Thistle. This is in spite of your obligations under the Companies Acts and accounting standards…”
“[w]e known its [sic] not the case, controlled by Cooper and McNally for at the time the deal was done Cooper was no where [sic] in sight as it was controlled by Arena and the trustees to the Arena settlement .. and the only beneficiary at the time was one AJR!”
“By responding the way that you did you have given [Dr Smith] the invitation to approach [your lawyers] direct… one he tells me his going to take up. You might be right that you have made no misrepresentation that require the financial statements to be restated based on all the evidence. The problem is that he will also need to look at this and if he thinks that you are into tax evasion then he is under a duty to report you. He cannot tip you off and you will never know. It is you that will have started that process running by responding the way you have. Despite what you may think I am independent of Gerald Smith and anyone independent (including your own lawyers) will conclude that you have some explaining to do and that is probably sufficient for your lawyers to make a report to the police and HMRC.”
“What he [Mr Ruhan] achieves by what takes place, the transfers to Cambulo, on your case, is that he manages to see off Morgan Stanley and Thistle with repayments of loans and nothing else, and then gets 100% of the profits for himself”
“At paragraph 7.12 Schematic 3 item 9 of my first witness statement (GAC1A) I referred to certain English proceedings between a Mr Al Jufairi and Mr Ruhan/ Unicorn Worldwide Holdings Limited (‘UWH’); which is one of the companies listed on the List of 18) relating to the Qatar project outlined above. At pages 257-270 of GAC2A, obtained as part of the Initial Disclosure Order, is a copy of a draft board minute, undated but signed, and a dated but unsigned similar board minute of UWH that describes a proposed settlement between UWH and its affiliated companies (together the ‘BT Group’), [the Bridge Tower Group of companies] that were incorporated for the purpose of developing residential tower blocks in the Pearl Development, Doha, Qatar. The board minute states that the settlement figure of$135 million would be received by UWH which would deliver net to UWH$90,440,000 after expenses. Attached to the board minute as page 265 is a copy of a Without Prejudice Non-Disclosure Agreement between various Bridge Tower Companies, UWH, Bridgehouse Capital Limited, Bridgehouse Partners LLP, Mr Ruhan, Mr McNally, and Mr Abdullah AI Jufairi and others. The document is signed on behalf of the various Bridge Tower, Bridgehouse Capital, Bridgehouse Partners companies by Mr McNally in eleven different capacities, i.e. this document suggests that Mr McNally was an authorised signatory of all of these eleven companies, From the above explanation of the relevance of the various Safe Contents List namely, the materials relating to the Mood Facility, Bridge Tower 1 and UWH and the documents relating to the 18 companies which are amongst the documents in the safe are very relevant to the Claimants’ claims in the English Proceedings. In particular, the fact that the former Orb assets have been used (as security) to return a benefit to Mr Ruhan (in which the Claimants are entitled to share under the6 May 2003 agreement) of at least$135 million United States Dollars. The documents explaining the true transaction and what has happened to that$135 million have not been produced, under the Initial Disclosure Order and are sought under this Claim.”
“In particular, it has come to light from the documents obtained pursuant to the Disclosure Orders that the Hyde Park Hotels (which formed part of the Orb Assets transferred to Mr Ruhan) were, via Cambulo-Comercio International E Servicios Sociedade Unipessoal LDA (‘Cambulo Madeira’) and the assistance of Mr Anthony Edward Stevens (‘Mr A Stevens’), used to leverage finance for a residential construction sale and leaseback project in Portia Arabia and the Pearl, Doha, Qatar (‘the Qatar Project’), a purported settlement of the Qatar Project resulted in the sum of£91,839,921.09 (‘the£91 million ’) being transferred to a bank account of Legion Management Corp. held at the Royal Bank of Scotland International Limited in the Isle of Man. At Index 6 is a copy of the Spanish and English translation of a notarial deed that records that Mr Cooper and Mr McNally were two of the three Directors of Legion Management Corp. prior to its dissolution on the 16 th October 2013. The£91 million was then transferred to various entitles including the First, Third, Fourth and Fifth Defendants. Further details in relation these entities and the transactions can be found below.”
“At Index 30 is a schedule from the October Order that describes a series of payments transferred from Qatar to Unicorn Worldwide Holdings Limited in partial settlement of a series of contract claims that total$157,364,148 from13 May 1999 [sic] until1 March 2011 . It is, I believe, very relevant that these monies were paid to Unicorn Worldwide Holdings Limited a principal sub holding company of the Arena Arrangements rather than being ‘repaid’ to Mr A Stevens’ company Euro Estates as would have been expected if the loan from Euro Estates which I describe in the following paragraphs had been a genuine third party loan.”
“The Cambulo Profits can also be traced into the Bridge Tower Companies (defined at paragraph 108), a further group operating, at all relevant times, under Mr Ruhan’s control, and assets held by those companies, particularly in Qatar, and into profits realised from those assets (‘Qatar Profits’). A further part of the Cambulo Profits was used to repay certain loan facilities obtained by the Bridge Tower Companies, which loans had also been acquired using the Hyde Park Hotels as security for the purpose of investing in a residential construction, sale and leaseback project in Porto Arabia and the Pearl, Doha, Qatar (the ‘Qatar Project’), and with the intention of using the Cambulo Profits to repay those facilities. Consequently, if the£91 million derives from Qatar Profits, the£91 million and the other Relevant Assets remain the traceable products of the Claimants’ interest in the Orb Assets. In correspondence, the Second Respondent, Mr A Stevens, claims that the£91 million represented profits realised from the Qatar Project. Even if the£91 million did in fact derive from Qatar Profits rather than the Sentrum Profits, the Claimants maintain the£91 million still represents the traceable product of the interest in the Hyde Park Hotels. The Applicants have reason to believe that further Qatar Profits have been received by the Second Respondent, Mr A Stevens, as directed by Mr Ruhan, and yet further Qatar Profits may also soon be received by the Second Respondent. The Applicants also fear that funds left in the control of Mr A Stevens will, given the events set out in this affidavit and the unsatisfactory Akin Gump correspondence, be moved out of the Applicants’ reach.”
“On the evidence before the court, there is no causal link between the profits made on the Hyde Park Hotels and monies in the hand of Sentrum Holdings Ltd which were used to pay the£92 million . It is asserted in the claimants' evidence that Orb Assets were used to set up the Sentrum data centres, that Mr Ruhan funded Sentrum from the Orb Assets and used them to secure Sentrum's borrowings. Ultimately, the claimants mainly rely on an inference that profit on the Thistle Lancaster Gate Hotel of£7.76 million was available for use at the relevant time in establishing Sentrum but there was no evidence at all that these funds were used in the way suggested. There was no evidence that they ever went into the Arena Settlement. The allegation was based solely upon speculation by Ms Stickler and supposed verification by Mr McNally in his first affidavit at paragraphs 4 and 5 and 14 to 17, without any supporting evidence in the shape of documents, despite the fact that the claimants have had access to the Arena Settlement documents in the circumstances I have already outlined (since October 2013 and March 2014) In the light of the evidence from the defendants, in my judgment the point is unsustainable.”
“The claimants submit that there is a sufficient causal and transactional connection between Euro Estates' use of the profits on the sale of the Hyde Park Hotels to fund the loans made to Bridge Tower Holdings 1 and 2 (for it to pay off the Investec loan and as working capital for the Qatar development) and the payment of£92 million as a part recovery under those loans. The question that arises is whether or not, on those facts, as they appear from the evidence, the£92 million payment can be said to represent the profit share so as to amount to a substitute asset for the purpose of tracing. It is of course true that the loans made to Bridge Tower Holdings 1 and 2 were not repaid by those companies at all and that the£92 million approximately was paid by another company allegedly owned by Mr Ruhan (Sentrum) but in the overall context of Mr Ruhan's empire and the allegations made as to his use of corporate entities within it, I consider that tracing the profits into this payment by Sentrum cannot be said to have no realistic prospect of success. There are plainly fact sensitive issues involved here.”
“It appears that the claimants have sold Global Marine Systems for a price of£75 million in September 2014 and that Unicorn has recovered some$150 million between 2009 and 2011 in respect of the Qatar project. There are traceable proceeds of the Qatar assets which are now in the claimants’ control as a result of the transfers which took place under the Isle of Man Settlement.”
“I take the force of my Lord saying you have had them [the documents obtained from the Isle of Man Norwich Pharmacals and from the de facto control of the companies transferred under the IOM Settlement] since April [2014], surely if there was something which showed a large amount of the Orb assets going in, surely you would be able to point to. And we can’t.” b) Later that day, at pages 93-94, Mr White QC raised the possibility that Mr Ruhan might at trial be able to show that the Orb Claimants could not trace into some of the recovered assets (and by implication, retain sufficient of them to ensure that the Orb Claimants were not “out-of-pocket”, such that they needed the further claims against Mr Stevens). Mr White QC also accepted at that stage that the Orb Claimants would not know until trial “which ones we can trace into”. c) On Day 4 of the hearing, there was the following exchange between Cooke J and Mr White QC. Cooke J asked: “The question I am asking, Mr White, to which I don’t think there is any sensible answer, is why nothing at all has been done to assess what it is that you have recovered and that to which you can therefore legitimately be entitled as a self-help remedy? ”
“My Lord, I am stuck, as my Lord pressed me and I accept, I am stuck with the unanswered evidence that the value of the assets transferred under these arrangements is 150 to 205 million. What I am urging on my Lord is not all of that may turn out to be assets to which we have the proprietary claim … One simply doesn’t know until the exercise has been done .”
“… Claims are not the same thing as facts. Mr. Harman contended that for the purposes of the present issue all the allegations contained in the statements of claim in both the actions must be taken as true. That will not do. What we have to deal with is the state of the defendant solicitors' knowledge (actual or imputed) at the date when they received payments of their costs and disbursements. At that date they cannot have had more than knowledge of the claims above mentioned. It was not possible for them to know whether they were well-founded or not. The claims depended upon most complicated facts still to be proved or disproved, and very difficult questions of German and English law.”
“There is a further example of the same point in relation to the opposing interests of the beneficiaries and the administrators as to whether certain assets were trust assets. In that respect the interests of the beneficiaries and the administrators were opposed and work done to enable the administrators to advance the case that assets were not trust assets or to determine whether they were or were not trust assets can be said to be work done for the benefit of the unsecured creditors but it is not work for which the beneficiaries under the trusts should pay.”
“It may have belonged to [Bridgehouse Poland] as the legal owner of the property and vendor. Alternatively it may have belonged to [Radix UK] … as mortgagee with a charge on the property or possibly as legal owner and vendor”
“23. In our judgment, the function of the expert witness on foreign law can be summarised as follows: (1) to inform the court of the relevant contents of the foreign law; identifying statutes or other legislation and explaining where necessary the foreign court's approach to their construction (2) to identify judgments or other authorities, explaining what status they have as sources of the foreign law; and (3) where there is no authority directly in point, to assist the English judge in making a finding as to what the foreign court's ruling would be if the issue was to arise for decision there. 24. The first and second of these require the exercise of judgment in deciding what the issues are and what statutes or precedents are relevant to them, but it is only the third which gives much scope in practice for opinion evidence, which is the basic role of the expert witness. And it is important, in our judgment, to note the purpose for which the evidence is given. This is to predict the likely decision of a foreign court, not to press upon the English judge the witness's personal views as to what the foreign law might be. Thus, in G & H Montage GmbH v Irvan i[1990] 1 WLR 667 (CA) , Mustill LJ said (at p. 684G) ‘The fact that the plaintiffs' expert was not able to do more than assert, in this novel situation, his own view on how the German court would react when faced with a similar problem does not disqualify his evidence from being relied upon. There are many fields of law in which the books provide no direct answer, and where the skill of the lawyer lies precisely in predicting what answer should be given. If the judge concludes that the expert's prediction is reliable, he is fully entitled to give effect to it’. This passage emphasised that the expert witness is entitled to give opinion evidence in the absence of direct authority, but we would underline the restrictions which it places upon him. His role is to ‘predict’ what the foreign court would decide, and only in this sense should he say ‘what answer should be given’.”
“Sometimes the foreign law, apart from being in a foreign language, may involve principles and concepts which are unfamiliar to an English lawyer. The English judge’s training and experience in English law, therefore, can only make a limited contribution to his decision on the issue of foreign law. But the foreign law may be written in the English language; and its concepts may not be so different from English law. Then the English judge’s knowledge of the common law and of the rules of statutory construction cannot be left out of account. He is entitled and indeed bound to bring that part of his qualifications to bear on the issue which he has to decide, notwithstanding that it is an issue of foreign law. There is a legal input from him, in addition to the judicial task of assessing the weight of the evidence given. The same applies, in our judgment, in the Court of Appeal. When and to the extent that the issue calls for the exercise of legal judgment, by reference to principles and legal concepts which are familiar to an English lawyer, then the court is as well placed as the trial judge to form its own independent view.”
“28. Thirdly, in determining the question of foreign law the court is entitled, and may be bound, to look at the source material on which the experts express their opinion. This is true of any expert evidence which comes before the court, and if authority were required for the proposition in relation to foreign law it can be found in Dicey (see above) at 9–017 and the cases at footnote 91. 29. Fourthly, the claimant (for reasons which I will come to) submitted that the relevant issue would have to be resolved in the ‘supreme court’ of the foreign jurisdiction; and that therefore the relevant question is: what would the ‘supreme court’ decide if the matter were before it? Mr Pollock relied in support of this proposition on: Re Duke of Wellington , Glentanar v Wellington[1947] Ch 506 (Wynn-Parry J at p. 519); Rendall v Combined Insurance Company of America [2005] 1 CLC 565 (Cresswell J) and Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan[2008] EWHC 1901 (Comm) (Aikens J at [103]). I accept that this may be the right approach in some circumstances, but it will not be the right approach in every case. The legal issue may, for example, have been plainly decided by a court which is inferior in jurisdiction to the ‘supreme court’. I have concluded that the law is correctly stated in Dicey at 9–020: ‘Considerable weight is usually given to the decisions of foreign courts as evidence of foreign law … But the court is not bound to apply a foreign decision if it is satisfied, as a result of all the evidence, that the decision does not accurately represent the foreign law. Where foreign decisions conflict, the court may be asked to decide between them, even though in the foreign country the question still remains to be authoritatively decided.’ 30. Fifthly, a further issue may arise where the foreign law is going through a period of change (as the claimant contended in the present case). The question is then the extent to which the English court can anticipate the ‘trajectory’ of the developing law. Mr Pollock referred to a passage in the judgment of Beatson J in Blue Sky One Ltd v Blue Sky Airways LLC[2010] EWHC 631 (Comm) at [88] in support of his contention that it can. In that case Beatson J was considering a particular problem: that the decisions of the Iranian courts are seldom referred to, the views of commentator are seldom relied on and only decisions of the supreme court sitting in banc constitute legally binding precedent. In these circumstances I am not persuaded that Beatson J's reference to the ‘trajectory of Iranian law’ bears the weight that Mr Pollock sought to attach to it. To the extent that he was submitting that the English court should decide what conclusion a foreign court would reach on a developing area of the law, the point is unobjectionable. If he was intending to invite me to make findings which went beyond the present state of Russian law and to anticipate a rational development of it, his invitation must be declined.”
“Article 11 – Validity of a Jersey Trust (1) Subject to paragraphs (2) and (3), a trust shall be valid and enforceable in accordance with its terms. (2) Subject to Article 12, a trust shall be invalid – (a) to the extent that – (i) it purports to do anything the doing of which is contrary to the law of Jersey, (ii) it purports to confer any right or power or impose any obligation the exercise or carrying out of which is contrary to the law of Jersey, (iii) it purports to apply directly to immovable property situated in Jersey, or (iv) it is created for a purpose in relation to which there is no beneficiary, not being a charitable purpose; (b) to the extent that the court declares that – (i) the trust was established by duress, fraud, mistake, undue influence or misrepresentation or in breach of fiduciary duty, (ii) the trust is immoral or contrary to public policy, or (iii) the terms of the trust are so uncertain that its performance is rendered impossible. … (5) Where paragraph (2)(a)(iii) applies, any person in whom the title to such immovable property is vested shall not be, and shall not be deemed to be, a trustee of such immovable property.”
“Article 33 – Constructive Trustee (1) Subject to paragraph (2), where a person (in this Article referred to as a constructive trustee) makes or receives any profit, gain or advantage from a breach of trust the person shall be deemed to be a trustee of that profit, gain, or advantage. (2) Paragraph (1) shall not apply to a bona fide purchaser of property for value and without notice of a breach of trust. (3) A person who is or becomes a constructive trustee shall deliver up the property of which the person is a constructive trustee to the person properly entitled to it. (4) This Article shall not be construed as excluding any other circumstances under which a person may be or become a constructive trustee.”
“Article 49 – Enforceability of a foreign trust (1) Subject to paragraph (2), a foreign trust shall be regarded as being governed by, and shall be interpreted in accordance with its proper law. (2) A foreign trust shall be unenforceable in Jersey – (a) to the extent that it purports – (i) to do anything the doing of which is contrary to the law of Jersey, (ii) to confer any right or power or impose any obligation the exercise or carrying out of which is contrary to the law of Jersey, or (iii) to apply directly to immovable property situated in Jersey; (b) to the extent that the court declares that the trust is immoral or contrary to public policy. (3) Where paragraph (2)(a)(iii) applies, any person in whom the title to such immovable property is vested shall not be, and shall not be deemed to be, a trustee of such immovable property.”
“As the point does not arise specifically, we can express our views on it briefly. We think that the submissions of Mr. Santos-Costa require us, first, to consider whether a beneficiary under an express Jersey trust has an equitable proprietary interest in the trust property. In our view, he does. It is true that nowhere does the 1984 Law state specifically that a beneficiary under an express trust has an equitable proprietary interest in the trust fund. However, the 1984 Law is not a codification. Trusts were recognized and enforced by the Jersey courts well before the passing of the 1984 Law and, in doing so, they looked to English law for guidance on trust matters and, by and large, adopted English principles save where it was appropriate to differ. A Jersey trust is essentially the same animal as is found in English law, subject to certain local modifications. We conclude that the position is summarized correctly in Matthews & Sowden, The Jersey Law of Trusts , 3rd ed., para. 1.20, at 8 (1993): ‘Turning to consider trusts proper, it is also clear from the terms of various of the provisions in [the Trusts (Jersey) Law 1984] that in a Jersey trust the beneficiary is intended to have and does have a proprietary interest in the trust property, and not merely a personal right against the trustees to compel due administration. Indeed, were this not so, Art 50(1), (4) would mean that, in some circumstances, at least, no-one had a proprietary interest in the trust assets (see also Arts. 9, 23, 29, 31, 34, 42 and 43). It is true that the beneficiary’s interest is not stated to be an ‘equitable’ interest, although in Art. 50(4) there is reference to ‘beneficial interest.’ On the other hand, the trustee has some interest in the property [of] the subject of the trust, however limited (see Arts. 2, 50(1)), and so, whether or not the trustee’s and beneficiary’s interests are properly called ‘legal’ and ‘equitable’ in the English style, there is little doubt that the [Trusts (Jersey) Law 1984] is referring to concepts serving identical purposes: c.f. Hawksford and Renouf v. Giffard (1885), 210 Ex 206 at 211, where the court drew the distinction, in the case of a trust of immovables, between the owners ‘en droit’ and those ‘en équité.’”
“These provisions provide that a beneficiary under a constructive trust imposed by virtue of art. [33](1) has a proprietary interest in the property (see, in particular, art. [33](3) and art. [54](3)). Article [33](4) clearly envisages that constructive trusts will arise in circumstances other than those set out in art. [33](1). It would be highly illogical if a constructive trust arising in other circumstances did not involve a proprietary interest on the part of the beneficiary, whereas those arising pursuant to art. [33](1) did so. It would be unusual and confusing to have two different types of constructive trusts, one recognizing an equitable proprietary interest on the part of the beneficiary and one recognizing only a personal right against the trustee. Accordingly, we hold that a beneficiary under a constructive trust does have an equitable proprietary interest in the assets which are the subject of that trust.”
“We appreciate that the recognition of constructive trusts in such circumstances may raise questions concerning art. [11](2)(a)(iii) of the [TJL], which provides that a trust shall be invalid to the extent that ‘it purports to apply directly to immovable property situated in Jersey.’ That will be for decision on another occasion but, as at present advised, we think it is strongly arguable that that provision does not apply to constructive trusts. Articles 29 and [54] refer to ‘property,’ which is defined by art. 1(1) to mean ‘property of any description wherever situated.’ It is hard to envisage that Jersey law would accept that, if a trustee, in breach of trust, uses trust moneys to purchase Jersey immovable property for his own benefit, he should be permitted to hold that immovable property free from any trust for the beneficiaries. In any event, any concerns about Jersey immovable property are not sufficient, in our judgment, to negate the general principle which we have described.”
“72. This is not a case of trustee fraud and therefore we do not have to decide whether there is some special category of constructive trust which could apply to Jersey real estate in the context of trustee fraud, and the issue is left over should such a case ever arise. Nonetheless, we do comment that the issue is not necessarily straightforward. Of course, at one end of that spectrum, one could be faced with a trustee who has fraudulently deprived the beneficiaries of the trust estate and purchased with the proceeds some real property in Jersey. There, equity may indeed demand that the beneficiaries should have recompense. More difficult is where there are competing equities, even in such circumstances. The fraudulent trustee may have other creditors and, where there has been an insufficiency of assets, it would then be an issue as to whether, in effect, the beneficiaries who have been fraudulently deprived of the trust estate should be preferred to other creditors, who might also be the victims of fraud, albeit not as beneficiaries. 73. Like Birt, Deputy Bailiff in In re Esteem , we do not have to decide this issue today because the factual circumstances are quite different. We are considering today only whether a constructive trust in relation to Jersey real estate can arise in the circumstances of this case.”
“Although the court in In re Esteem (7) was not required to consider these matters in detail, it is necessary to approach these issues in a holistic way. In our judgment, the provisions of art. 11(2)(a)(iii) of the Trust Law are in place because, save perhaps in the proprietary estoppel cases referred to above and in the statutory exceptions, Jersey law has never recognized a division between legal and equitable interests in Jersey immovable estate. To hold that such different interests could arise would be to create an enormous gap in Jersey property law, with all the ensuing uncertainty as to the ownership of land. It would be to ignore the distinctions which for years have existed between those who are fondée en héritage and those who are not. It would be to create uncertainty in bankruptcies and désastre. It may indeed be desirable that there should be a distinction between legal and equitable interests in land, and this judgment does not address whether that is so. What we do recognize is that, if such a distinction is to be introduced, then it must be by the legislature after appropriate consultation and consideration.”
“It is true that the Court in [ Flynn ] left open the theoretical possibility that a constructive trust of Jersey immovable property might be capable of arising in the (specific) context of a claim by the victim of a ‘trustee fraud’ to recover misappropriated assets. However, it is, in practice, impossible to see how this could be. As the Court held in Flynn , Jersey law simply does not recognise the essential underpinnings of such a claim, namely the existence of an equitable proprietary interest in Jersey immovable property In any event though, it would plainly be illogical to hold that Jersey law would recognise a constructive trust that arises in one context (a fraud) but not in another (a common intention to acquire property for the benefit of another) when, in all fundamental respects, both types of constructive trust are the same animal.”
“It should be noted that the provisions of the 1984 Trusts Law appear to apply to express trusts only and not to constructive trusts. This view is supported by Matthews and Sowden at paragraph 7.16 of the TLJ: ‘…A Jersey Trust is invalid to the extent that it "purports to apply" to Jersey immovables. These words are apt to cover an express trust, but not one imposed by the law or by the courts. Moreover, our Arts ([54]) (3) (tracing) and [33] (constructive trustees) contain no limitation on the kind of property which may be subject to a proprietary claim. Indeed, both provisions refer to "property", which is defined by Art 1 (1)(1) to mean "property of any description wherever situated". It would be absurd if the beneficiaries of a Jersey Trust could not trace into Jersey land bought, in gross breach of trust, by a trustee with trust funds, or if such beneficiaries could lay claim to shares bought with a bribe given to the trustee but not Jersey land bought with the same bribe. It would be an affront to justice in such a case to say that the Trustee held such property free from any trust (cf art (10)(5)). In our view it is clear that there may be a constructive trust of Jersey immovable property.’”
“the requirement of mutuality has two facets. First, the respective characters of the claim and cross-claim must be commensurate. This means that the claim and the cross-claim must both be monetary claims or claims which a party is entitled to have reduced to money. So a person holding property as bailee or trustee for another cannot set-off against his delivery or accounting obligation a monetary claim against the … beneficiary … The same rule applies where it is the insolvent party who is the trustee. Second, there must be mutuality of parties, that is the claim and cross-claim must be between the same parties in the same right.”
“ It will be seen that, when the court decides on the amount to be specified in the confiscation order, it has to use the total of the values of the property the defendant holds, less only ‘priority’ obligations, such as fines and preferential debts. The existence of obligations owed to ordinary third party creditors is to be disregarded when a confiscation order is made. It seems to this court that it would have been wholly illogical for the legislature to have decided to allow third party debts to be paid during the period when assets are supposedly being preserved by a restraint order when such debts are to be left out of account at the stage when the confiscation order is made. We can see no reason why Parliament should have decided to allow unsecured creditors to reduce the assets during the restraint phase when such creditors could not reduce the assets at the confiscation stage. If that were the position, it would put a premium on well-advised creditors getting in quickly during the restraint phase before their opportunity is lost, and we do not accept that that situation is one which was ever intended”
“A confiscation order is not proprietary in nature. It does not confer a proprietary interest in any property. It is for a specified sum and may be enforced against any realisable property whether or not the latter constitutes the proceeds of crime. Nor, however, is it the same as a personal debt or money judgment. It ranks ahead of other unsecured creditors in a number of ways. Section 69(2)(c) provides that all the relevant powers, which include those of enforcement, must be exercised without regard to obligations to unsecured creditors. Sections 417 and 418 of the Act exclude property which is the subject matter of a restraint order or otherwise recoverable in confiscation proceedings from the estate of a bankrupt, and so such assets are unavailable for distribution to unsecured creditors of a bankrupt; and there are equivalent provisions in relation to the assets of a corporate defendant in liquidation in s.426 of the Act. In calculating the ‘available amount’ under s.9, there is no reduction in the calculation of the value of the defendant's assets to take account of debts to unsecured creditors. Moreover s.58 provides that once a restraint order in support of a future confiscation order is in place, no distress may be levied against realisable property, nor may any tenancy of premises be forfeited without the court's consent, and courts may stay any other proceedings in respect of any property which is the subject of the restraint order. In these ways the debt constituted by a confiscation order is afforded priority over those owed to unsecured creditors generally”
“Whether assets legally vested in a company are beneficially owned by its controller is a highly fact-specific issue. It is not possible to give general guidance going beyond the ordinary principles and presumptions of equity, especially those relating to gifts and resulting trusts. But I venture to suggest, however tentatively, that in the case of the matrimonial home, the facts are quite likely to justify the inference that the property was held on trust for a spouse who owned and controlled the company. In many, perhaps most cases, the occupation of the company's property as the matrimonial home of its controller will not be easily justified in the company's interest, especially if it is gratuitous. The intention will normally be that the spouse in control of the company intends to retain a degree of control over the matrimonial home which is not consistent with the company's beneficial ownership. Of course, structures can be devised which give a different impression, and some of them will be entirely genuine. But where, say, the terms of acquisition and occupation of the matrimonial home are arranged between the husband in his personal capacity and the husband in his capacity as the sole effective agent of the company (or someone else acting at his direction), judges exercising family jurisdiction are entitled to be sceptical about whether the terms of occupation are really what they are said to be, or are simply a sham to conceal the reality of the husband's beneficial ownership.”
“This is hard fought litigation with no holds barred between parties who were, and are at enmity with one another and where a war of attrition is being waged in the shape of this action by the claimants against Mr Ruhan”
“HPII and Mr Pelz shall not be required to demonstrate at the Directed Trial (i) their entitlement to trace into the IUAs (such as a relevant proprietary base, breach of fiduciary duty or other legal matters such as compliance with the relevant limitation periods), or (ii) the factual basis for tracing into the IUAs; i. for the period prior to the Isle of Man Settlement; or ii. insofar as the Qatar Settlement Agreement concluded on11 June 2015 and the payments made to Ocean Advisory & Consulting WLL which followed are relied upon, for the period prior to the Qatar Settlement Agreement.”
“We accept what your Lordship has said, your analysis earlier on. We accept it is not necessary for the joint liquidators to raise this form of defence [sc. bona fide purchaser for value]”