Williams v Central Bank of Nigeria [2011] EWHC 876 (QB)

Case No HQ10X00931

[2011] EWHC 876 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 8 April 2011

Before

THE HON. MR JUSTICE SUPPERSTONE

Between

LOUIS EMOVBIRA WILLIAMSClaimant/

CENTRAL BANK OF NIGERIADefendant/ Applicant

Jonathan Adkin (instructed by Sandra Williams) for Claimant/Respondent

Edward Levey (instructed by Berwin Leighton Painter) for Defendant/Applicant

Hearing Hearing dates: 25 and 28 March 2011

Judgment

Mr Justice Supperstone :

Introduction

[1]The Central Bank of Nigeria, the Defendant, by notice dated 8 April 2010 challenges the jurisdiction of the English Court in these proceedings. By order dated 26 February 2010 Master Yoxall granted Dr Williams, the Claimant, permission to issue the Claim Form for service out of the jurisdiction and to serve the Claim Form and the Particulars of Claim on the Defendant in Nigeria. The Defendant seeks to have that Order set aside. Further the Claimant by notice dated 14 March 2011 applies for permission to amend the Claim Form and Particulars of Claim and, if and insofar as is necessary, for permission to serve the draft Amended Claim Form and draft Amended Particulars of claim out of the jurisdiction.

Background: The Claimant’s Case

[2]The Claimant is a Nigerian qualified barrister resident in England since 1979. He engaged in England in a number of commercial transactions relating to Nigeria. In or around April 1986 one of his clients, Pearl Konsults Ltd (“PKL”), was approached in England by a Mr Chukwu, a Nigerian, with a commercial proposition for the importation of foodstuffs to Nigeria. Mr Chukwu proposed to pay PKL 30 million Naira (the Nigerian currency) for the foodstuffs by means of certain banker’s drafts to be encashed at a bank in Nigeria.

[3]PKL approached the Claimant and informed him of the proposed transaction. PKL told the Claimant that it did not itself have sufficient funds or credit to enable it to participate in the transaction, but that if the Claimant was willing to guarantee a loan to PKL it would be able to participate in the transaction and would share the profits from the transaction with him. Following further discussions between the Claimant, PKL and Mr Chukwu it was agreed that: i) PKL would borrow $6,520,190 from its bank, and the Claimant would provide PKL’s bank with a guarantee that the loan would be repaid within 90 days; ii) PKL would cause the $6,520,190 to be transferred to Mr Chukwu’s solicitor in England, who would hold the funds pending the encashment of the Naira banker’s drafts in Nigeria and release of the 30 million Naira for the use of PKL/the Claimant; iii) Once the Naira banker’s drafts had been cashed and the monies released to PKL/the Claimant in Nigeria, the funds held in England by Mr Chukwu’s solicitor would be released to enable the foodstuffs to be purchased and shipped to Nigeria.

[4]These arrangements were put into effect. PKL obtained the loan from its bank, which issued a banker’s draft for $6,520,190 in favour of Mr Chukwu’s solicitor in England, Mr Reuben Gale. Mr Gale undertook to hold those monies on terms that they would not be released until the 30 million Naira were available in Nigeria. The Claimant guaranteed the loan to PKL from its bank. The banker’s drafts for 30 million Naira were encashed in Nigeria. However, the funds were immediately frozen. Notwithstanding this, Mr Gale paid some $6,020,190 of the monies held by him to an account in the name of the Defendant at Midland Bank in England. He retained the balance of $500,000 for himself. The Naira having been frozen, and the $6,020,190 having been paid away, PKL and the Claimant were unable to proceed with the transaction, PKL was unable to repay any of its loan, and the Claimant’s guarantee was called upon in full.

[5]The Claimant went to Nigeria in anticipation of the receipt of the Naira funds. Upon finding them frozen, the Claimant sought out Mr Chukwu. It subsequently transpired that Mr Chukwu was not a bona fide business man and the transaction he proposed was not a bona fide transaction. Mr Chukwu was operating on the instructions of elements within the Nigerian State Security Service (“SSS”) with the purpose of relieving PKL and the Claimant of their monies. The Claimant alleges that he was the subject of an undercover “sting operation” carried out by the SSS with the participation and involvement of the Defendant. He was arrested by the SSS and charged with conspiracy to sell foreign currency without permission contrary to the Exchange Control and Anti-Sabotage Decree 1984. In February 1987 the Claimant was convicted by the Currency and Miscellaneous Offences Tribunal and sentenced to a ten year term of imprisonment, but he escaped and returned to England.

[6]The Claimant alleges that he was the victim of a fraudulent scheme. A Special Judicial Panel was subsequently set up by the Attorney General on the orders of the President of Nigeria to investigate the matter and it found that the Claimant was innocent of all charges. As a result the Claimant received a Presidential Pardon which was published in the official Gazette on 1 September 1993. Under the 1984 Decree no verdict or sentence is operative unless and until confirmed by the Head of State. By a letter dated 7 September 1993 the President informed the Claimant’s legal counsel that the verdict, sentences and fines would not be confirmed and that “all the exercises relating to Dr William’s case… are invalidated retrospectively with immediate effect”. The letter continued:

“Your client is free to apply to the various government authorities to recover all his assets in the possession of the authorities and to have de-frozen his accounts held in his name or operated under his authority. In particular, … the Governor of the Central Bank has been directed to take necessary action to carry out the directives of the Commander-in-Chief.”

By a Presidential Directive dated 14 September 1993, the President directed the Defendant to return the Claimant’s monies to him. However this did not happen. (The Defendant does not admit the authenticity of the letter dated 7 September 1993 and the Presidential Directive dated 14 September 1993).

[7]The Claimant alleges that in or around June 2009 he reached an agreement with the Defendant that his monies be returned to him, but that in breach of contract the monies have not yet been paid to him.

The Claimant’s claims

[8]Three sets of claims are put forward which have been referred to as(1) “the 1986 Trust”;

(2) “the 1993 Trust”; and

(3) “the 2009 Agreement”.

[9]The 1986 Trust claim arises, the Claimant says, from the Defendant’s assistance in, and receipt of monies from, Mr Gale’s fraudulent breach of trust. Mr Gale received and held the $6,520,190 on trust to use those monies only for the specified purposes identified by his undertaking. That was a trust of which PKL and the Claimant were beneficiaries (or, alternatively, as a result of his losses pursuant to the guarantee of PKL’s loan, the Claimant is subrogated to PKL’s rights as beneficiary of that trust). In paying those monies away when, as he knew, the 30 million Naira were not released and available to PKL and the Claimant, Mr Gale acted in breach of that trust. Further, in circumstances were Mr Gale was well aware that the entire transaction as represented to the Claimant was false, and that the true intention was to deprive PKL and the Claimant of monies, such breach of trust was fraudulent. The Defendant dishonestly assisted in this breach of trust by receiving $6,020,190 of the monies as part of the fraudulent scheme, and received these monies knowing they had been paid in breach of trust. The Claimant says that as a result of this the Defendant is liable to account to the Claimant as constructive trustee in respect of his losses arising from Mr Gale’s breach of trust, by reason of its dishonest assistance in, and knowing receipt of the proceeds of, that breach of trust; and he is entitled to follow the monies paid by Mr Gale into the hands of the Defendant.

[10]The 1993 Trust claim arises, the Claimant says, because the Defendant agreed to hold the monies at the direction of the President of Nigeria, and that pursuant to that direction the Defendant was constituted trustee of the monies for the Claimant. The Claimant says he has a proprietary claim to the monies held by his trustee, who is also liable to account for those monies and their profits.

[11]The 2009 Agreement claim arises from the agreement that the Claimant says he made with the Defendant for the resolution of his claims and payment of $6,520,190 to him in around June 2009. He says this agreement has been breached and the monies not paid.

Service out of the jurisdiction: legal principles

[12]In AK Investment CJSC v Kyrgyz Mobil Tel Ltd

[2011] UKPC 7

at para 71 Lord Collins, delivering the advice of the Privy Council, summarised the requirements for service out of the jurisdiction:

“On an application for permission to serve a foreign defendant (including an additional defendant to counterclaim) out of the jurisdiction, the claimant (or counterclaimant) has to satisfy three requirements: Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438, 453-457. First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645, [2005] 2 Lloyd’s Rep 457, at [24]. Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context ‘good arguable case’ connotes that one side has a much better argument than the other: see Canada Trust Co v Stolzenberg (No.2) [1998] 1 WLR 547, 555-7 per Waller LJ, affd [2002] 1 AC 1; Bols Distilleries BV v Superior Yacht Services [2006] UKPC 45, [2007] 1 WLR 12, [26]-[28]. Third, the claimant must satisfy the court that in all the circumstances [Country X] is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise is discretion to permit service of the proceedings out of the jurisdiction.”

[13]The third requirements was considered by Waller LJ in Deripaska v Cherney

[2009] EWCA Civ 849

at para 20: “… In my view the summary in the notes on page 22 of the White Book under CPR 6.37(4) Forum Conveniens summarises the position correctly:- ‘Subject to the differences set out below, the criteria that govern the application of the principle of forum conveniens where permission is sought to serve out of the jurisdiction are the same as those that govern the application of the principle of forum non conveniens where a stay is sought in respect of proceedings started within the jurisdiction. Those criteria are set out in The Spiliada …:(i) The burden is upon the claimant to persuade the court that England is clearly the appropriate forum for the trial of the action.

(ii) The appropriate forum is that forum where the case may most suitably be tried for the interests of all the parties and the ends of justice.

(iii) One must consider first what is the ‘natural forum’; namely that with which the action has the most real and substantial connection. Connecting factors will include not only factors concerning convenience and expense (such as the availability of witnesses), but also factors such as the law governing the relevant transaction and the places where the parties reside and respectively carry on business.

(iv) In considering where the case can be tried most ‘suitably for the interests of all the parties and for the ends of justice’ ordinary English procedural advantages such as a power to award interest, are normally irrelevant as are more generous English limitation periods where the claimant has failed to act prudently in respect of a shorter limitation period elsewhere.

(v) If the court concludes at that stage that there is another forum which is apparently as suitable or more suitable than England, it will normally refuse permission unless there are circumstances by reason of which justice requires that permission should nevertheless be granted. In this inquiry the court will consider all the circumstances of the case, including circumstances which go beyond those taken into account when considering connecting factors with other jurisdictions. One such factor can be the fact, if established objectively by cogent evidence that the claimant will not obtain justice in the foreign jurisdiction. Other factors include the absence of legal aid or the ability to obtain contribution in the foreign jurisdiction.

(vi) Where a party seeks to establish the existence of a matter that will assist him in persuading the court to exercise its discretion in his favour, the evidential burden in respect of that matter will rest upon the party asserting it.” (See also Lord Collins in AK Investment CJSC v Kyrgyz Mobil Tel Ltd at para 88).

The 1986 Trust

[14]The second of the three requirements (see para 12 above) is satisfied in relation to this claim. Mr Edward Levey, for the Defendant, accepts that there is a good arguable case that the claim falls within one of the “gateways” set out in paragraph 3.1 of Practice Direction 6B to CPR Part 6. The gateways relied on by the Claimant in respect of this part of the claim are para 3.1(15):

“A claim is made for a remedy against the defendant as constructive trustee where the defendant’s alleged liability arises out of acts committed within the jurisdiction”; para 3.1(16): “A claim is made for restitution where the defendant’s alleged liability arises out of acts committed within the jurisdiction”; and para 3.1(11): “The whole subject matter of the claim relates to property located within the jurisdiction”

. Mr Olatujoye, Director of the Legal Services Department of the Defendant, says in his witness statement dated 2 June 2010 at para 16, the Defendant accepts “that there is at least a triable issue on the questions of whether, as alleged, the Claimant was a victim of a sting operation carried out by the SSS in 1986 and whether the Bank was the recipient of money allegedly confiscated from the Claimant”.

[15]However the first and third requirements are in issue. As to the first, the Defendant’s case is that there is no serious issue to be tried because the claims are time barred; as to the third, it is said that the Claimant cannot satisfy the burden of proving that England is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of proceedings out of the jurisdiction. (1). Serious issue to be tried

[16]The limitation period in respect the claim arising out of the 1986 Trust is six years from the date of the relevant act. However section 21(1) of the Limitation Act 1980 disapplies the limitation period in respect of certain actions relating to trust property. Section 21(1) provides as follows:

“No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action: (a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or (b) to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.”

[17]Mr Jonathan Adkin, for the Claimant, submits that in the present case the limitation period should be disapplied for two reasons:(1) the Defendant dishonestly assisted Mr Gale, a trustee in a fraudulent breach of trust and as such the Defendant comes within the definition of “trustee” in section 21(1)(a); alternatively

(2) the claim against the Defendant is within section 21(1)(a) because it is “in respect of” the actual trustee’s fraudulent breach of trust.

(i) A “trustee” in the sense required by the Act

[18]Mr Adkin submits that section 21(1)(a) applies to the Defendant as a dishonest assistant because the Defendant is a (constructive) trustee who is a party to the fraud. Section 38(1) of the 1980 Act states (by reference to the Trustee Act 1925) that “trustee” includes “constructive trustee for the purposes of the legislation”. The relief that is sought against the Defendant is, inter alia, that the Defendant is liable to account to the Claimant as a constructive trustee in respect of the $6,520,190 paid away by Mr Gale in fraudulent breach of trust (see para 42(1) and (2) of the draft Amended Particulars of Claim).

[19]In Paragon Finance v DP Thakerar & Co

[1999] 1 All ER 400

Millett LJ described at 409 two categories of constructive trust:

“A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his own beneficial interest in the property and deny the beneficial interest of another. In the first class of case, however, the constructive trustee really is a trustee. He does not receive the trust property in his own right but by a transaction by which both parties intend to create a trust from the outset and which is not impugned by the plaintiff. His possession of the property is coloured from the first by the trust and confidence by means of which he obtained it, and his subsequent appropriation of the property to his own use is a breach of that trust. … In these cases the plaintiff does not impugn the transaction by which the defendant obtained control of the property. He alleges that the circumstances in which the defendant obtained control make it unconscionable for him thereafter to assert a beneficial interest in the property. The second class of case is different. It arises when the defendant is implicated in a fraud. Equity is always given relief against fraud by making any person sufficiently implicated in the fraud accountable in equity. In such a case he is traditionally though I think unfortunately described as a constructive trustee and said to be ‘liable to account as constructive trustee’. Such a person is not in fact a trustee at all, even though he may be liable to account as if he were. He never assumes the position of a trustee, and if he receives the trust property at all it is adversely to the plaintiff by an unlawful transaction which is impugned by the plaintiff. …”

In Paragon Millett LJ at 414c-d observed that there is “a (emphasis added) case for treating a claim against a person who has assisted a trustee in committing a breach of trust as subject to the same limitation regime as the claim against the trustee”. However dishonest assistance is plainly a type of liability that falls within Millett LJ’s second class of case. In Dubai Aluminium Co. Ltd v Salaam

[2003] 2 AC 366

at 404 Lord Millett said, in relation to a defendant who was assumed to have dishonestly assisted in a fraudulent breach of fiduciary duty, that “the claim against him [was] simply that he participated in a fraud” and that he was “not a fiduciary or subject to fiduciary obligations; and he could plead the Limitation Acts as a defence in the claim”.

[20]In Peconic Industrial Development Ltd v Lau Kwok Fai

[2009] 5 HKC 135

, a decision of the Hong Kong Court of Final Appeal, Lord Hoffmann NPJ specifically considered whether one category of non-fiduciaries, namely persons who dishonestly assist a trustee in a fraudulent breach of trust, should be treated in the same way as the trustee and not allowed a limitation defence. Lord Hoffmann stated at para 24:

“This argument has the high authority of some dicta of Lord Esher MR and Bowen and Kay LJJ in Soar v Ashwell [1893] 2 QB 390. These remarks have been subjected to minute analysis in the cases and academic writings but I am willing to accept that they support the proposition that dishonest assisters cannot rely on a limitation defence. Nevertheless I think they are wrong in principle and unsupported by authority. The principles is not that the limitation defence is denied to people who were dishonest. It plainly applies to claims based on ordinary common law fraud. The principle is that the limitation period is denied to fiduciaries. But dishonest assisters are not fiduciaries. It might be surprising, as Millet LJ said in the Paragon Finance case (at p414), if a person primarily liable was entitled to plead the Limitation Act when someone who assisted him could not. But there seems no reason in fairness or logic why the reverse should not be true. And in any case, Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 shows that the liability of a dishonest assister is independent of the dishonesty of the trustee or other fiduciary. Mr Scott placed some reliance upon Millett LJ’s observation that ‘a principled system of limitation would also treat a claim against an accessory as barred when the claim against the principal was barred and not before’: see Paragon Finance, ibid. That showed, he said, that if the fraudulent trustee is never entitled to plead limitation, the dishonest assister should not be entitled to do so. But I do not think Millett LJ could have meant this, which would be contrary to most of his reasoning and his subsequent clear statement in Dubai Aluminium Co. Ltd v Salaam [2003] 2 AC 366, 404 that a dishonest assister is not a fiduciary and can plead the Limitation Act.”

[21]In my view the Claimant has not established that there is a serious issue to be tried on this point. (ii). “In respect of”

[22]In Peconic Industrial Development Ltd Lord Hoffmann also considered this argument. S.20 of the Limitation Ordinance, with which the Court was concerned, is in material respects in the same terms as section 21(1)(a) of the 1980 Act. Lord Hoffmann said “It remains to consider the alternative argument that, as a matter of construction, a claim against a dishonest assister may be within s.20 because it is ‘in respect of’, in the sense of being accessory to, the actual trustee’s fraudulent breach of trust. It is true that in certain contexts the words ‘in respect of’ may have a very wide meaning and the possibility of such a meaning being given to the words in s.20 was tentatively considered by Danckwerts J in GL Baker Ltd v Medway Building and Supplies Ltd

[1958] 1 WLR 1216

, 1222. But I think that in the context of s.20 of the Ordinance it simply means that the beneficiary must be claiming against the trustee on the ground that he has committed a fraudulent breach of trust. If it had been intended to include claims against dishonest assisters or other non-fiduciaries on the ground that they were accessories to the breach of trust, the language would have been a good deal clearer.”

[23]The decision of the Hong Kong Court of Final Appeal in Peconic Industrial Development Ltd is highly persuasive, in particular because of the authority of Lord Hoffmann. The point in issue was however considered in Statek Corporation v Alford

[2008] EWHC 32 (Ch)

where Evans-Lombe J reached the opposite conclusion. Evans-Lombe J said at para 125, “In my judgment, section 21(1) of the Limitation Act 1980, following the decision of Mr Justice Danckwerts in the G.L. Baker Ltd case and the obiter dicta of Lord Esher and Bowen LJ in Soar v Ashwell, is to be construed as applying to accessories to the fraudulent breaches of trust of others with the result that no period of limitation is applicable to claims against them. I do not read the decision of the House of Lords in the Dubai Aluminium case as authority to the contrary.” The G.L. Baker Ltd case concerned a claim by a company to recover money entrusted to its auditor who fraudulently had paid away some of it to a company of which he was a director. At page 1221 Danckwerts J said “This Act is one which I understand was drafted by a very eminent Chancery lawyer, but nonetheless it is one which gives considerable difficulties of interpretation whenever the court is concerned with its application. … It seems to me that the words ‘in respect of any fraud or fraudulent breach of trust’ may be capable of referring to a case where the action of the plaintiff is based upon the fact that their monies were fraudulently paid away and have reached the hands of an innocent party. That is a possible construction but whether or not it is the right one is not at all clear.” In Statek Corporation Evans-Lombe J noted that the defendant in the G.L. Baker Ltd case was not an accessory to the fraud but the innocent recipient of the proceeds of it. In his view that consideration had no bearing on the effect of the judgment of Danckwerts J for the purposes of the case before him (para 112). The main reason given by Evans-Lombe J for the conclusion he reached was that dishonest assistants, as accessories to a breach of trust, should be subject to the same limitation rule as fraudulent trustees (see paras 118-119). Professor Charles Mitchell, in an article to which I have been referred, “Dishonest assistance, knowing receipt, and the law of limitation ([2008] Conveyancer and Property Lawyer 1 at 4), comments that “The problem with this argument is that it creates an anomalous distinction between actions for dishonest assistance and knowing receipt where the breach of trust has been committed fraudulently and actions where it has not. The latter would have to be brought within six years, but no such limitation would apply to the former, even though the defendant behaved equally badly in both cases. This distinction might have made sense in dishonest assistance cases when the law required proof that the trustee assisted by the defendant was himself dishonest, but that is no longer the law following Royal Brunei.”

[24]The observations by Evans-Lombe J in Statek Corporation on this issue were obiter. Moreover, as Mr Levey notes, whilst Evans-Lombe J at para 111 recognised, (as had Danckwerts J in G.L. Baker Ltd) a weakness in the construction argument, namely that section 21(1)(a) refers to claims against “the” trustee, not “any” trustee, he did not explain how that weakness was to be overcome. Further Mr Levey relies on the decision of Mr Richard Sheldon QC, sitting as a deputy High Court Judge in Cattley v Pollard [2007] 3 WLR who reached the same decision as did the Court in the later decision of Peconic Industrial Development Ltd (where the Court was referred to Cattley v Pollard, but not, it appears to Statek Corporation).

[25]Mr Adkin relies on the decision in Statek Corporation where Evans-Lombe J considered the decision in Cattley v Pollard and rejected the analysis of Mr Sheldon QC (see in particular paras 119 and 124). Mr Adkin submits that as a matter of statutory interpretation dishonest assistance claims are claims “in respect of any fraud or fraudulent breach of trust… to which the trustee [Mr Gale] was a party or privy”. Mr Sheldon acknowledged that there is “considerable force in this submission” (para 87) which gives full meaning to the words “in respect of” and it is supported by what Dankwerts J said in G.L. Baker Ltd. (See also Schulman v Hewson and others

[2002] EWHC 855 (Ch)

where Blackburne J at para 44 assumed that a plea of accessory liability was covered by s.21(1)(a)). There is no express restriction in section 21(1)(a) to claims against trustees only. By contrast s.21(1)(b) is clearly restricted to claims against trustees. The statutory context of s.21(1)(a) therefore also points against implying any restriction. Mr Sheldon QC in Cattley v Pollard appears to have rejected this distinction, without dealing specifically with the point (see paras 39, and 87-88).

[26]In my judgment the construction argument, namely the meaning of the words “in respect of” in s.21(1)(a), does raise a serious issue to be tried.

Limitation: whether the court is required to decide the point

[27]The skeleton arguments of Mr Levey and Mr Adkin and their oral submissions on the first day of this hearing, Friday 25 March 2011, appeared to proceed on the agreed basis that the test in relation to the first requirement (see para 12 above) was whether there was a serious issue to be tried on the merits. However in supplemental written submissions dated 27 March 2011, which Mr Levey advanced orally on the second day of the hearing, Monday 28 March, he submitted that the court is required to decide whether or not the 1986 Trust claim is time barred. In support of this submission Mr Levey referred me to ICI Chemicals v TTE Training

[2007] EWCA Civ 725

at [12], and Carter v Clarke

[1990] 1 WLR 578

at 584E-585B. Mr Adkin opposed this “application”. The case had been put and presented not as a preliminary issue or as a trial on the point, but as a challenge to jurisdiction. It was, he submitted, not a short point of law; it was an important and complicated point and it was not appropriate for summary disposal. Further the point was not wholly devoid of factual context. I accept the submissions made by Mr Adkin. In my view it would not be appropriate for me to decide the issue.

The 1993 Trust

[28]The Claimant alleges that, by virtue of a directive given by the President of Nigeria to the Defendant in 1993, a trust was established in his favour and he seeks an order that the trust monies be paid over to him. This is a new cause of action which was not included in the original Claim Form or in the original Particulars of Claim.

[29]Mr Adkin submits that this claim falls within the jurisdictional gateway covered by CPR PD 6B para 3.1(11): the trust property is held in England, and the whole subject matter of the claim relates to that property. There is evidence that up until 1993 the monies were in England (see Presidential Directive dated 14 September 1993 at (6)). Mr Omoruyi, who was employed by the Defendant from 15 August 1969 until his retirement on 31 January 2002, at para 1 of his witness statement dated 22 June 2010 states:

“… I therefore knew that the Claimant’s assets were confiscated and the sum of approximately $6 million were transferred to the Midland Bank Account of the Defendant Bank in London. Those funds remain with the Defendant’s bank at the present time.”

There is no evidence from the Defendant to the contrary. In my view it is arguable that the trust monies, if there be a trust, are currently within the jurisdiction.

[30]However for an express trust to be created “(i) the settlor must intend to impose legally enforceable duties of trusteeship on the owner of the property; (ii) the subject-matter of the trust must be certain; and (iii) the objects or persons intended to have the benefit of the trust must be certain.” (Snell’s Equity (32nd Ed) at para 22-012).

[31]Mr Levey submits that there is no evidence to suggest that the President intended to create a legal relationship whereby the Defendant would become the trustee of a particular trust fund for the benefit of the Claimant. Mr Adkin relies on the Presidential Directive dated 14 September 1993 which refers to the Claimant’s monies being “held in the CBN’s Midland Bank Account in the UK” (para 6(i)), and to an earlier letter from the Defendant to the President dated 12 January 1990 in support of his submission that the Defendant represented that it would hold and use those monies as directed by the President.

[32]However, when considering whether an express trust was established in 1993, a key question is whether or not the Claimant’s monies were segregated or separately identified at the time or at any time thereafter. Underhill and Hayton, Law Relating to Trusts and Trustees (18th Ed) at 8.6 state:

“An intent to create a trust of specific property will involve an intent that such property is not to be at the free disposal of the recipient and so needs to be kept separate from other trust or private property of the trustee, so that a property relationship is intended and not a personal debtor-creditor relationship. Thus if a recipient of money: ‘is not bound to keep the money separate but is entitled to mix it with his own money and deal with it as he pleases, and when called upon to hand over an equivalent sum of money, then he is not a trustee of the money but merely a debtor’ (Henry v Hammond [1913] 2 KB 515 at 521, endorsed by CA in R v Clowes (No.2) [1994] 2 All ER 316 at 325 and applied in Customs and Excise Comrs v Richmond Theatre Management Ltd [1995] STC 257)’.”

There is no evidence that the Claimant’s monies were ever segregated or separately identified in 1993 or at any time thereafter. Indeed, the evidence is to the contrary. In an internal memorandum “Re: Final Progress Report on Dr L.E. Williams” from the Director of the SSS to the President dated 23 December 1989 it is said at (3) “The London Solicitor Rueben Gale employed by the SSS returned £6m stg to the Governor of Central Bank into the account designated in his name (Abdulkadir Ahmed) which also receives foreign funds seized abroad from suspect politicians arrested in Nigeria and found guilty by various Tribunals since January 1984.” The President merely directed the Defendant to return the Claimant’s money to him (and the Defendant stated it would do as the President directed). However I accept Mr Levey’s submission that there is no evidence that any express trust was established in respect of any particular trust fund. In my view the Claimant has not established an arguable case, or even, as Mr Adkin submits is the test, a serious issue to be tried on the merits. ‘is not bound to keep the money separate but is entitled to mix it with his own money and deal with it as he pleases, and when called upon to hand over an equivalent sum of money, then he is not a trustee of the money but merely a debtor’ (Henry v Hammond

[1913] 2 KB 515

at 521, endorsed by CA in R v Clowes (No.2)

[1994] 2 All ER 316

at 325 and applied in Customs and Excise Comrs v Richmond Theatre Management Ltd

[1995] STC 257

)’.”

The 2009 Agreement

[33]The Claimant alleges that in or around June 2009 he reached an agreement with the Defendant for the repayment of his monies (see paras 35-36 of the draft Amended Particulars of Claim).

[34]Mr Levey accepts that if such an agreement was entered into, there is a good arguable case that the breach of the contract, that is the failure by the Defendant to pay the monies, was a breach committed within the jurisdiction for the purposes of CPR PD 6B para 3.1(7). It is also accepted on behalf of the Defendant that it is arguable, in the sense that there is a serious issue to be tried on the issue, that an agreement was reached in 2009 between the Claimant and the Office of the President for the return of his monies. However Mr Levey submits that the suggestion that the Defendant was a party to such an agreement has no real prospect of success and accordingly, Mr Levey submits, there is no good arguable case to be tried in relation to this claim. (In his oral submission Mr Levey submitted that the relevant test was whether there was a good arguable case on that issue, and not whether was a serious issue to be tried, as he had stated in his skeleton argument).

[35]The Claimant’s pleaded case is that an agreement was made between the Claimant and the Defendant “in around June 2009”. However at paragraph 2 of the Claimant’s witness statement dated 4 May 2010 he says “… an agreement [was] reached in June 2009 between my legal representatives and State Counsel for the President of the Republic of Nigeria. As a result of that agreement State Counsel for the President instructed the Defendant to pay me the $6.5 million misappropriated from me. The President’s instruction to the Defendant was set out in a letter of 1st July 2009…” In his witness statement dated 30 June 2010 the Claimant says at paragraph 13:

“… The Agreement was reached after twelve months of negotiations with my legal advisers firstly with the Attorney General and then with the President and State Counsel. An Agreement reached to settle my claims (in this respect for the return of my money) was binding. There is no way in law that one party to that agreement can unilaterally withdraw from it. The letter of 19 May 2010… appears to indicate that the new President has been the subject of representations leading him to withdraw the earlier approval. … However the new President cannot withdraw his approval…”

[36]In my view the documents on which Mr Adkin relies (see para 36 of draft Amended Particulars of Claim) provide no support for the submission that the President was acting as the Defendant’s agent when making the agreement alleged in or around June 2009. Chief Olujinmi, who acted on the Claimant’s behalf in Nigeria in negotiations with Mr Arabi, the President’s State House Counsel, described in his witness statement dated 1 June 2010 the events leading to the conclusion of the Agreement and stated:

“… As a result Mr Arabi wrote to the Governor of the Defendant on 1st July 2009 informing him of the agreement reached and instructing him that the $6.5 million belonging to the Claimant deposited with the Defendant was to be returned to him. In polite language the letter of 1st July 2009 was effectively a direction by the President, who as the Head of State is able to give directions to the Central Bank, to honour the agreement reached by the President through repaying the Claimant’s money. …”

Again, there is no suggestion that the President was acting as the agent for the Defendant in making the Agreement. The Claimant says in his witness statement dated 21 January 2010 at paragraph 16 that “Under the statute setting up the Defendant the President is the effective Head of the Defendant…”. This is not correct. The Defendant is “an independent body in the discharge of its functions” (Central Bank of Nigeria Act 2007, section 1(3)). The Bank is operated through a Board of Directors and its day to day management is the responsibility of the Governor (or, in his absence, the Deputy Governor). The President is not authorised under the Central Bank of Nigeria Act 2007 to make decisions or to act on behalf of the Bank (although there are certain provisions in the Act where the President’s approval is required) (see witness statement of Mr Olatujoye dated 2 June 2010 at para 12).

[37]The report of Mr Tominiyi Owolabi, a Solicitor and Advocate of the Supreme Court of Nigeria, on Nigerian law dated 3 June 2010 identifies two possible circumstances in which the President, or the Federal Government, could require the Defendant to make payment to the Claimant of his monies (see paras 41-59). Whether or not the President could lawfully give a direction in the present case with which the Defendant was obliged to comply is a wholly different question from the one as to whether the President in making the Agreement with the Claimant was acting on behalf of the Defendant.

[38]Paragraph 36(5) of the draft Amended Particulars of Claim states that the Defendant “… agreed to make the payment to Dr Williams’ bank account in England, amongst other things:(a) During the course of telephone conversations between Dr Williams and representatives of the Central Bank in or around July 2009; and

(b) During the course of discussions between Dr Williams’ Nigerian lawyer and Mr Nda of the Central Bank in or around September 2009.” The Claimant has not alleged in any of his witness statements that the Agreement was made “in or around July 2009” or “in or around September 2009”. Further, the Claimant’s “Nigerian lawyer”, Mr Omoruyi, does not state in his witness statement dated 22 June 2010 that he had reached the agreement with Mr Nda that was allegedly made in or around September 2009 (see, in particular, para 6 of his statement).

[39]In my view it is not arguable that the Defendant was a party to the alleged 2009 Agreement and there is no serious issue to be tried in relation to this claim.

Forum conveniens

[40]In my judgment the only claim that satisfies the first two requirements for permission to serve the foreign Defendant out of the jurisdiction (see para 12 above) is the 1986 Trust claim. Accordingly it is only necessary to consider the third requirement, the appropriate forum, in relation to that claim.

[41]Mr Levey submits that the Claimant has not discharged the burden of establishing that England is clearly the most appropriate forum (see paras 12 and 13 above) for four reasons: first, the 1986 Trust arose out of an unlawful “sting operation” orchestrated by the Nigerian State Security Service with the assistance of the Nigerian Central Bank. Second, the main protagonists in the “sting” were Mr Chukwu, an SSS operative, and Mr Gale, an English solicitor who is said to have acted as the agent of and/or conspired with the SSS. Third, the subject matter of the sting operation was the importation of foodstuffs into Nigeria. Fourth, were it not for the fact that the sum of 30 million Naira was frozen in Nigeria, the release of the money by Mr Gale in London would not have been a breach of trust.

[42]I reject this submission. In my view England is the “natural forum” for resolution of this claim. It is the forum with which the action has the most real and substantial connection. The material events took place in England. First, the negotiations with Mr Chukwu; second, the payment to Mr Gale; third, the transfers out by Mr Gale in breach of trust; and fourth, the proceeds of Mr Gale’s fraudulent breach of trust were received by the Defendant in England. Further, I accept Mr Adkin’s submission that whilst based in Nigeria, the Defendant is well able to instruct solicitors and counsel to defend these proceedings in England. Mr Levey does not suggest that there are any specific reasons relating to convenience and expense that require the litigation to be conducted in Nigeria. The Claimant is based in England. He is 70 years old and has a history of health problems. In my view, given its resources, the Defendant is much better placed to conduct litigation in England than the Claimant is to do so in Nigeria.

Conclusion

[43]In my judgment i) In respect of the 1986 Trust There is a serious issue to be tried and England is clearly the most appropriate forum for the trial of the dispute. ii) In respect of the 1993 Trust There is no arguable case, or even serious issue to be tried, and permission to serve out of the jurisdiction is accordingly refused. iii) In respect of the 2009 Agreement There is no arguable case, or even serious issue to be tried, and accordingly the court does not have jurisdiction in relation to this claim.