“…advise on the negotiation of, and amendments to, a shareholders’ agreement to which, amongst other parties, Holdco, Platform, Capital and 3R will be parties; …advise on the purchase by Holdco of Wakanow from 3R including (i) the negotiation of, and amendments to, a share purchase agreement, (ii) the drafting and negotiating a disclosure letter; (iii) the negotiation and amendments to the completion escrow accounts; and …advise generally on the legal aspects of the Transaction and the steps to completion (including pre-conditions, CPs and the sequencing of steps), including managing and running completion in relation to the investment in Holdco by the Carlyle Group, and the acquisition of Wakanow.”
“Pursuant to clause 9.3.1(b) of the Investment Agreement we, being the Convertible Shareholder, hereby give this…Notice to convert all of the 40,000,000 Convertible Preference Shares...into ordinary shares. We hereby specify that the date for such conversion should be the date of this letter. ...The Application of the Formula results in the number calculated by the Formula exceeding 1 and, accordingly, the proviso of clause 9.5.1 of the Investment Agreement applies. As such we direct the Company to convert all of the 40,000,000 Convertible Preference Shares held by Oya Waka into 999,999,999 New Ordinary Shares in the capital of the Company…and by way of this notice, require that the Ordinary Shareholders transfertheir entire holding of issued shares to Oya Waka for nominal consideration.”
“106. We can see no reasonable basis for 3R being liable for the Deferred Consideration...It was Carlyle who was purchasing the shares of Tiger/Cap Travel, so it seems to us that the liability for paying the purchase price for these shares should have been 100% on Carlyle. 107. Furthermore, it was suicidal for 3R to take on this liability of$20.5 (this refers to the deferred consideration obligations of approximately US$20.54 million comprising US$15.84 million to Cap Travel and US$4.7 million to Tiger Global) which it was simply not in a position to fund. ... 115. The business was putting itself into a position whereby it would have debts it would be unable to pay. Just three years after completion (or potentially earlier), the preference shareholders would be entitled to require immediate payment of the preference shares for$40m plus the 12% annual dividend. Wazobia would be unable to pay, which would leave the business insolvent, and completely at the mercy of the creditors (Carlyle). Anyone with experience in dealing with private equity would know that this is exactly how they operate, and that it is a regular tactic of investors to load up the target company with debt due to the investors, which it is unable to repay, and then exploit the resulting vulnerability to the detriment of the other shareholders (usually the founders). … 121. It should not have been too difficult for an experienced advisor at the time of completion to recognise that there was a serious risk that 3R and the Founders would end up with nothing (or, worse, with no assets, but with substantial liabilities for Deferred Consideration), whereas prior to this transaction they were the majority shareholders in a business worth in excess of$60m . … 138. The convertible preference shares were absolutely central to the transaction. They were not part of the original Heads of Terms, and were introduced by Mr Popo without any instructions from his client. Those shares were the sole benefit Carlyle received for its$60m . They were also toxic for 3R, as they could result in 3R’s shareholding being effectively expropriated without compensation. It was therefore essential that the solicitor satisfied himself that the clients properly understood the provisions relating to the convertible preference shares. Mr Popo took no steps to advise on, or satisfy himself that Mr Ekezie and Mr Tamuno properly understood, the convertible preference shares.”
“An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
“The language of section 14A thus recognises a range of different states of mind: (a) actual knowledge of the material facts about the damage and other facts relevant to the action (including therefore knowledge that the loss was capable of being attributed to an act or omission alleged to constitute negligence); (b) knowledge that a claimant might reasonably have been expected to acquire (from facts observable by himself or ascertainable by him or with the help of appropriate expert advice which it would have been reasonable for him to seek); and (c) ignorance. Actual knowledge within (a) involves knowing enough to make it reasonable to investigate whether or not there is a claim against a particular potential defendant ....
“...had not reviewed the documentation in any detail with a view to assessing or knowing that we had any potential claims against the Defendant.”
“…The amount of a plaintiff's loss frequently becomes clearer after court proceedings have been started and while awaiting trial. This is an everyday experience. There is no reason to think that the approach I have spelled out will give rise to any insuperable difficulties in practice. In their practical conduct of litigation courts are well able to ensure that assessments of damages are made in a sensible way. It is not necessary, in order to achieve a sensible and fair result, to go so far as asserting that the plaintiff has no cause of action, and hence may not issue a writ, until the assessment can be made with the degree of precision that accompanies a realisation of the security. Further, within the bounds of sense and reasonableness the policy of the law should be to advance, rather than retard, the accrual of a cause of action. This is especially so if the law provides parallel causes of action in contract and in tort in respect of the same conduct. The disparity between the time when these parallel causes of action arise should be smaller, rather than greater.”
“Proof of loss attributable to a breach of the relevant duty of care is an essential element in a cause of action for the tort of negligence. Given that there has been negligence, the cause of action will therefore arise when the plaintiff has suffered loss in respect of which the duty was owed. It follows that in the present case such loss will be suffered when the lender can show that he is worse off than he would have been if the security had been worth the sum advised by the valuer. The comparison is between the lender's actual position and what it would have been if the valuation had been correct. There may be cases in which it is possible to demonstrate that such loss is suffered immediately upon the loan being made. The lender may be able to show that the rights which he has acquired as lender are worth less in the open market than they would have been if the security had not been overvalued. But I think that this would be difficult to prove in a case in which the lender's personal covenant still appears good and interest payments are being duly made. On the other hand, loss will easily be demonstrable if the borrower has defaulted, so that the lender's recovery has become dependent upon the realisation of his security and that security is inadequate. On the other hand, I do not accept Mr. Berry's submission that no loss can be shown until the security has actually be realised. Relevant loss is suffered when the lender is financially worse off by reason of a breach of the duty of care than he would otherwise have been.”
“22. Thus cases like Bell v Peter Browne & Co[1990] 2 QB 495 and Knapp v Ecclesiastical Insurance Group plc [1998] PNLR 172 are readily explicable as cases in which the damage was the difference between the plaintiff's position as it was and as it would have been if the defendant had performed his duty and in which it was possible to infer that the plaintiff's failure to get what he should have got from a bilateral transaction was quantifiable damage, even though further damage which might result from the flaw in the transaction was still contingent. The plaintiff had paid money, transferred property, incurred liabilities or suffered diminution in the value of an asset and in return obtained less than he should have got. But these authorities have no relevance to a case in which a purely contingent obligation has been incurred.”
“However, there is an ambiguity in that submission, namely the reference to “liabilities which may arise on a contingency”
“57. …In my judgment, it is clear from the Sephton case that the incurring of a purely contingent liability which may result in an actual liability at a future point in time does not cause the limitation period to start to run. However, this is not the case where in addition to incurring a contingent liability the claimant suffers damage to a particular asset of his, for example because he also executes security over his property, as in Forster's case[1982] 1 WLR 86 . In that case, time began to run from the date of execution of the security. In my judgment, there is no difference between the case where security is given over a tangible asset, such as real property, and the case where security is given over an intangible asset, such as a debt. In either case, the claimant's property is damaged. Likewise, the principle that the incurring of a purely contingent liability is not itself damage does not apply where the claimant acquires a contingent liability as a part of a package of rights under a bilateral transaction and the value of that package has been diminished by the negligence of the defendant: see the Sephton case[2006] 2 AC 543 , paras 30 and 45, per Lord Hoffmann and per Lord Walker respectively.”
“71. In cases of negligent advice, the person relying on the advice will usually have entered a transaction of some kind which has turned out to be “flawed” in some way. One might expect that a “flawed” transaction of this kind would be something more than a contingent liability even if the liability, to which that transaction might give rise, depends on some future event. Sometimes the position will be that, if the claimant had been given the right advice, he would have entered a different and better transaction, in which case his damages are the difference between the value of the transaction into which he ought to have entered and the value of the transaction into which he did enter. That is akin to the contractual measure of damages (“loss of the bargain”). Sometimes if he had been given the right advice he would not have entered into a transaction at all, in which case his damages are the difference between the position in which he would have been if he had never made the transaction and the position in which he finds himself at the time of the institution of proceedings. … 73. …The fact that the flawed transaction has been entered into will usually be damage from the claimant's point of view. The fact that the recipient of the advice might have hoped for a better transaction or might have hoped to avoid any transaction makes no difference to the fact that he has entered into a flawed transaction which he would not have done if he had been competently advised. If such a flawed transaction has come into existence that will, in my view, usually be the damage which the recipient of the advice has suffered and that is more than the existence of a mere contingent liability.”
“82. The most that can be said in the present case is that the loss suffered by the claimant insurers is contingent upon the claim, which is (ex hypothesi) likely to fail, actually failing. But that does not make the case a case of a “mere contingent liability” because the claimants have entered into a flawed transaction which they ought not to have entered into. To my mind that is the damage which the claimants have suffered and that occurred at the time of the inception of the policies. It is true that the insurers are not immediately worse off as a result of entering into the ATE policies because they receive the premiums up front and it will be a short time before they are “on balance worse off” to use Lord Hoffmann's phrase in para 20 of the Sephton case[2006] 2 AC 543 , but that will be well before the underlying claim has “failed” which is the time argued for by Mr Hollander. 83. …Lloyd LJ (dissenting) says more than once that NIG has been put in a seriously worse commercial position than it ought to have been; indeed that is the whole essence of the claimant's case. In those circumstances it seems to me to be distinctly uncommercial to say that the insurers have suffered no loss and I would be troubled by such a conclusion.”
“49. I have to decide whether the Claimants have an arguable case that this was a potential loss, a pure risk, and analogous with Sephton , rather than a case where they entered the wrong transaction, got the wrong deal, changed their position and suffered an immediate loss even though the full extent of that loss was not clear until later. 50. Certainly the comparison with Pegasus (Pegasus Management Holdings SCA-v-Ernst and Young[2010] EWCA Civ 181 ) is enticing. Pegasus was a case, like this one, where the wrong tax advice was given and the Claimant got the wrong package. And in general in the "wrong transaction" cases damage is suffered when the transaction is entered into. 51. However, I am not convinced that this case is on all fours with those "wrong transaction" cases. In all those cases there was a measurable loss, even if the full extent of the loss was not clear. A pension scheme was not going to deliver what was wanted. A mortgage was unsecured. A company, or an interest in land, was acquired in a form that could not deliver the benefits sought. These are actual losses and are to some extent measurable. There need not be finally quantifiable damages, but there must be actual damage. By contrast, in the present case nothing was acquired; it has not been shown that what happened in 2001 restricted commercial options for the future (although it may be that after full argument at trial it can be shown that that was the case). Shares were sold, cash was released, and all that the Claimants took on was a risk. Tax might or might not be charged, depending upon the agreement of the two revenue authorities. Arguably that is a pure contingency. No suggestion has been made as to how the situation in which the Claimants were placed after December 2001 could be valued. A risk can be valued, but a risk by itself is not damage.”
“exposed 3R to substantial liabilities (including repayment of debts) without corresponding certainty of recoverable consideration and safeguards.”
“If all that was necessary was that a plaintiff should have known that the damage was attributable to an act or omission of the defendant, the statute would have said so. Instead, it speaks of the damage being attributable to the act or omission which is alleged to constitute negligence. In other words, the act or omission of which the plaintiff must have knowledge must be that which is causally relevant for the purposes of an allegation of negligence. There may be many acts, omissions or states which can be said to have a causal connection with a given occurrence, but when we make causal statements in ordinary speech, we select on common sense principles the one which is relevant for our purpose. In a different context it could be said that a Name suffered losses because some Members Agent took him to lunch and persuaded him to join Lloyd's. But this is not causally relevant in the context of an allegation of negligence. It is this idea of causal relevance which various judges of this court have tried to express by saying the plaintiff must know the “essence of the act or omission to which the injury is attributable” (Purchas L.J. in Nash v. Eli Lilly & Co. [1993] 1 W.L.R. 782 at 799) or “the essential thrust of the case” (Sir Thomas Bingham M.R., Dobbie [1994] 1 W.L.R. 1238 ) or that “one should look at the way the plaintiff puts his case, distil what he is complaining about and ask whether he had in broad terms knowledge of the facts on which that complaint is based.” (Hoffmann L.J. in Broadley [1993] 4 Med. L.R. 328 at 332.)”
“8. Two aspects of these "knowledge" provisions are comparatively straightforward. They concern the degree of certainty required before knowledge can be said to exist, and the degree of detail required before a person can be said to have knowledge of a particular matter. On both these questions courts have had no difficulty in adopting interpretations which give effect to the underlying statutory purpose. 9. Thus, as to the degree of certainty required, Lord Donaldson of Lymington MR gave valuable guidance in Halford v Brookes[1991] 1 WLR 428 , 443. He noted that knowledge does not mean knowing for certain and beyond possibility of contradiction. It means knowing with sufficient confidence to justify embarking on the preliminaries to the issue of a writ, such as submitting a claim to the proposed defendant, taking advice, and collecting evidence: "Suspicion, particularly if it is vague and unsupported, will indeed not be enough, but reasonable belief will normally suffice." In other words, the claimant must know enough for it to be reasonable to begin to investigate further. 10. Questions about the degree of detail required have mostly arisen in the context of the need for a claimant to know "the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence": section 14A(8)(a) . Consistently with the underlying statutory purpose, Slade LJ observed in Wilkinson v Ancliff (BLT) Ltd[1986] 1 WLR 1352 , 1365, that it is not necessary for the claimant to have knowledge sufficient to enable his legal advisers to draft a fully and comprehensively particularised statement of claim. Where the complaint is that an employee was exposed to dangerous working conditions and his employer failed to take reasonable and proper steps to protect him it may well be sufficient to set time running if the claimant has "broad knowledge" of these matters. In the clinical negligence case of Hendy v Milton Keynes Health Authority [1992] 3 Med LR 114 , 117-118, Blofeld J said a plaintiff may have sufficient knowledge if she appreciates "in general terms" that her problem was capable of being attributed to the operation, even where particular facts of what specifically went wrong or how or where precise error was made is not known to her. In proceedings arising out of the manufacture and sale of the drug Opren Purchas LJ said that what was required was knowledge of the "essence" of the act or omission to which the injury was attributable: Nash v Eli Lilly & Co[1993] 1 WLR 782 , 799. In Spargo v North Essex District Health Authority [1997] PIQR P235 , P242 Brooke LJ referred to "a broad knowledge of the essence" of the relevant acts or omissions. To the same effect Hoffmann LJ said section 14(1)(b) requires that "one should look at the way the plaintiff puts his case, distil what he is complaining about and ask whether he had, in broad terms, knowledge of the facts on which that complaint is based": Broadley v Guy Clapham & Co[1994] 4 All ER 439 , 448. 11. A similar approach is applicable to the expression "attributable" in section 14A(8)(a) . The statutory provisions do not require merely knowledge of the acts or omissions alleged to constitute negligence. They require knowledge that the damage was "attributable" in whole or in part to those acts or omissions. Consistently with the underlying statutory purpose, "attributable" has been interpreted by the courts to mean a real possibility, and not a fanciful one, a possible cause of the damage as opposed to a probable one: see Nash v Eli Lilly & Co[1993] 1 WLR 782 , 797-798. Thus, paraphrasing, time does not begin to run against a claimant until he knows there is a real possibility his damage was caused by the act or omission in question. Irrelevance of knowledge that the act or omission involved negligence 12. Difficulties may sometimes arise over the interaction of these "knowledge" provisions and the statutory provision rendering "irrelevant" knowledge that, as a matter of law, an act or omission did, or did not, amount to negligence: section 14A(9) . By the latter provision Parliament has drawn a distinction between facts said to constitute negligence and the legal consequence of those facts. Knowledge of the former (the facts) is needed before time begins to run, knowledge of the latter (the legal consequence of the facts) is irrelevant. As Sir Thomas Bingham MR said in the clinical negligence case of Dobbie v Medway Health Authority[1994] 1 WLR 1234 , 1242, knowledge of fault or negligence is not necessary to set time running. A claimant need not know he has a worthwhile cause of action. 13. A linguistic point, which can give rise to confusion, should be noted here. Sometimes the essence of a claimant's case may lie in an alleged act or omission by the defendant which cannot easily be described, at least in general terms, without recourse to language suggestive of fault: for instance, that "something had gone wrong" in the conduct of the claimant's medical operation, or that the accountant's advice was "flawed". Use of such language does not mean the facts thus compendiously described have necessarily stepped outside the scope of section 14A(8)(a) . In this context there can be no objection to the use of language of this character so long as this does not lead to any blurring of the boundary between the essential and the irrelevant. 14. This point is exemplified in Dobbie's case. The judge held the claimant had "broad knowledge of sufficient facts to describe compendiously [i] that her breast had been unnecessarily removed, [ii] that something had gone wrong, and [iii] that this was due to the defendant's negligence": see at p 1243. In the Court of Appeal this part of the judge's reasoning was criticised. These matters, it was said, were irrelevant. In my respectful view the Court of Appeal's criticism was well directed so far as it related to the third of these three matters, but not so far as it related to the other two. The essence of the claimant's case was that she had suffered injury by the removal of a healthy breast, that is, her breast had been removed unnecessarily and something had gone wrong. These were the acts and omissions she alleged constituted negligence. Under the statute time did not begin to run until she knew of these acts or omissions. Until she was aware of these matters she could not know her injury was attributable to them. I agree with the observations to this effect made by the Court of Appeal in Hallam-Eames v Merrett Syndicates Ltd [2001] Lloyd's Rep PN 178 , 181.”
“24. Returning to the degree of certainty required for "knowledge", the relatively low threshold will have reduced the significance of section 14A(10) of the 1980 Act . The fact that knowledge which a claimant "might reasonably have been expected to acquire" is to be taken into account under subsection (10) must matter less once it has been established that "knowledge" for the purposes of subsections (6)-(8) demands no more than "knowing with sufficient confidence to justify embarking on the preliminaries to the issue of a writ" or "know[ing] enough for it to be reasonable to begin to investigate further". Even so, it is evident from the structure of section 14A that "actual" knowledge under subsections (6)-(8) involves more than "constructive" knowledge under subsection (10). ”
“...it may be perfectly reasonable for a person who is not cured when he hoped to be to say, ‘Oh well, it is just one of those things. I expect the doctors did their best.’ Alternatively, the explanation for the lack of success may be due to want of care on the part of those in whose charge he was, in which case it would be perfectly reasonable to take a second opinion. And I do not think that the person who adopts the first alternative can necessarily be said to be acting unreasonably. But he is in effect making a choice, either consciously by deciding to do nothing, or unconsciously by in fact doing nothing. Can a person who has effectively made this choice, many years later, and without any alteration of circumstances, change his mind and then seek advice which reveals that all along he had a claim? I think not. It seems to me that where, as here, the deceased expected, or at least hoped, that the operation would be successful and it manifestly was not, with the result that he sustained a major injury, a reasonable man of moderate intelligence, such as the deceased, if he thought about the matter, would say that the lack of success was ‘either just one of those things, a risk of the operation, or something may have gone wrong and there may have been a want of care; I do not know which, but if I am ever to make a claim, I must find out. In my judgment, any other construction would make the Act unworkable since a plaintiff could delay indefinitely before seeking expert advice and say, as the deceased did in this case, ‘I had no occasion to seek it earlier.’ He would therefore be able, as of right, to bring the action, no matter how many years had elapsed. This is contrary to the whole purpose of the Act which is to prevent defendants being vexed by stale claims which it is no longer possible to contest.”
“20. My understanding is that the Defendant’s role was to: a) Advise on the terms of the Investment Agreement, Sale and Purchase Agreement (“SPA”), and associated Transaction documents; b) Identify structural, financial, and legal risks to 3R and its executives; c) Advise on mechanisms that could materially dilute equity or alter control; d) Warn of potential adverse consequences arising from aggressive or asymmetrical drafting proposed by Carlyle or its advisers. 21. The Defendant was specifically instructed that its advice must protect the interests of the First Claimant and the other executives of 3R, including the Second and Third Claimants, and to highlight structural disadvantages inherent in the Transaction.”
“30. I understood the provisions to represent negotiated commercial risk within an ordinary private equity transaction, not a structurally embedded enforcement mechanism capable of operating in the manner that later occurred. 31. I did not know, and could not reasonably have known, that the structure itself created a mechanism for the loss that subsequently materialised or that any such loss might be attributable to negligent advice or non-disclosure by the Defendant.”
“66. Given the lack of advice received on the above, I have to confess we knew very little about what the conversion notice meant. At that time, I knew that a conversion had been invoked and that the commercial relationship had broken down. However, at that stage I had no idea of how it worked. I had no reason to believe that any loss arose out of the Defendant’s failures as claimed. Nor did I suspect that this was due to the transaction structure which the Defendant had assured us was “fine”.”
“70. On12 September 2022 , represented by Nigerian solicitors, we participated in a conference call with Clifford Chance, acting for Carlyle. This was the first time we began directly querying: (a) The operation of the transaction documents; (b) The relationship between advisers; (c) Certain financial payments. 71. Those enquiries were prompted by my Nigerian lawyers who on12 September 2022 suspected that such matters may exist.”
“72. By letter dated18 September 2022 , Clifford Chance responded. 73. That letter caused me to realise for the first time with the assistance of Nigerian lawyers that: (a) The transaction documentation was being relied upon as determinative of the outcome; (b) The mechanics of conversion were embedded in the structure itself; (c) Any concerns about advisory relationships should be taken up with the Defendant. 74. Until that stage, I had not reviewed the documentation in detail with a view to assessing or knowing that we had any potential claims against the Defendant.”