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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Zambia, Attorney General v Meer Care & Desai (A Firm) & Ors [2006] EWHC 1179 (Ch) (22 May 2006) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2006/1179.html Cite as: [2006] EWHC 1179 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		22/05/2006

Peter Smith J :

INTRODUCTION

1. This judgment arises out of the 2nd and 8th Defendants application notices issued on 9th September and 14th September 2005 respectively seeking to strike out the Claimant's claim against them as an abuse of the process and/or for summary judgment.
2. The applications were first heard by me on 22nd/223rd March 2006 when they were adjourned for reconsideration in the light of the Claimant issuing an application to re re-amend the Particulars of Claim as a result of that hearing.
3. The 2nd and 8th Defendants application was adjourned to the CMC which was fixed for hearing on 28th April 2006. At the same time the Claimant's application to re re-amend the Particulars of Claim was heard.
4. In addition to those applications on 23rd March 2006 I ordered the Claimants to serve a case summary of the actions against the various Defendants. The Claimants duly did that.
5. In response to the proposed re re re-amended Particular of Claims the 2nd and 8th Defendants solicitors Barlow Lyde and Gilbert ("BLG") set out their clients stance by a letter dated 12th April 2006. The Claimants solicitors DLA Piper Rudnick Gray Cary ("DLA") set out their response on 24th April 2006.
6. Unfortunately due to technical delays the start of the CMC was delayed until 2pm and was then interrupted so that by 6.30 pm there was not sufficient time to deal with this outstanding application. It was accordingly agreed that the application would be determined on the basis of the written submissions and in the light of the exchange of letters that had passed between DLA and BLG subsequent to the hearing on 23rd March 2006.
7. This is the judgment in respect of the 2nd and 8th Defendants application.

BLG LETTER 12TH APRIL 2006.

8. This reflects BLG's definitive stance in respect of the re re re-amended Particulars of Claim.

GENERAL OBSERVATIONS

9. The re re re-amended Particulars of Claim is an extremely large document. It runs to 1152 paragraphs (496 pages) excluding the additional appendices which total 80 in number and run to 2 further lever arch files. In addition on 23rd March 2006 I indicated that a Scott Schedule should be prepared dealing with each allegation of misappropriation of money on an individual basis.
10. Finally as I have said above I ordered the Claimant to serve a summary.
11. These Defendants have attacked the pleading comprehensively. In their skeleton argument in support of their original application (paragraph 2.1.1) they describe it as being grotesquely long and they remind me that CPR 16.4 and the chancery guide require a statement of case to contain "a concise statement of the facts on which the Claimant relies".
12. The conciseness of any statement of case is necessarily dovetailed to the nature of the case. The irony of these Defendants' submissions in this respect of course is that they are complaining that the statement of case does not have enough information because they cannot meet or deal with the case against them.
13. The nature of this case can be discerned from consideration of the summary which itself went to 240 paragraphs. In essence the Claimants contend that the 3rd Defendant Dr Chiluba the former President of Zambia presided over an extensive conspiracy to defraud the government of Zambia thus the people of Zambia of large sums of money.
14. The 1st and 2nd Defendants are firms of solicitors. The claim against the 1st Defendant Meer Care ("MC") is that they participated in the conspiracy to defraud by the misappropriation of government monies and laundering of the government monies through their client account. It is also alleged that Mr Meer a partner in MC dishonestly received and dispersed government monies from an account ("the Zamtrop") account the total amount according to the served Scott Schedule which the Claimant has identified has passing through the 2nd Defendant's accounts is a little over 4.76 million dollars. Despite the similarity of the nature of the claims brought against MC as opposed to the 2nd and 8th Defendants Cave Malik and Bimal Thaker ("CM") and ("BT") respectively. MC have been able to plead to the Claimant's pleading and have not made the present application. As set out in paragraphs 77-92 of the summary the Claimants allege that CM and BT participated in the primary conspiracies to defraud and were in dishonest receipt and disbursement of misappropriated government monies directly and indirectly from the Zamtrop account and the office of president and that their principal role was therefore to assist in the misappropriation of funds by legitimising monies paid through the CM client accounts. In addition it is alleged that CM through its Endola office provided conveyancing and similar services in which misappropriation of government monies were used to fund the purchase of properties in Zambia it is alleged that the conspiracy started with an agreement between BT and Mr Kabwe the 9th Defendant that monies would be remitted to CM client account and they would be disbursed on the instructions of the directors of Access Financial Services Ltd ("AFSL") and that BT knew or suspected the monies received in to CM's client account were government monies. The directors of AFSL include D7, D10 and D11. In addition D7 holds 5% of its shares, D10 55% and D11 10%. Mr Kabwe (D9) was the Chief Executive Officer. The Claimant's case against CM and BT is one of inference. That can be discerned from paragraph 86 of the summary.
15. The nature of the claims is necessarily complicated. The detail required to be set out is in my view self evident and I observe again that without the detail the first complaints would be that there is not sufficient particularity to enable the Defendants to plead to the case.
16. 16 PD 8.2 requires the Claimant to specifically set out all allegations of fraud, illegality, breaches of trust and notice or knowledge of facts or details of wilful default.

BLG'S LETTER 12TH APRIL 2006

17. I consider each of the objections raised by BLG in their letter in the light of DLA's response by letter 24th April 2006.

CLARIFICATION AMENDMENTS (ITEM 2)

18. I set out in the following paragraphs my determination on each of the numbered items raised by BLG.

(1) In my judgment the pleading is sufficiently answered by DLA's letter.

(2) Once again paragraph 3 of the proposed re re re-amended Particulars of Claim as DLA's letter shows is a sufficient amendment to show that the conspiracy is the removal of monies from the government by the Zamtrop account and/or removing government money via a different vehicle namely the Office of the President. Any monies coming from that office the Claimant contends are also government monies and I do not see that the present claim causes these Defendants any difficulty.

(3) As DLA suggest this point was rejected by me on 23rd March 2006 and I refused permission to appeal.

Equally I do not accept that the plea is a new cause of action and even if it were it plainly falls within CPR 17.4 in my view as arising out of substantially the same facts. Finally in this context the Claimant can in any event rely upon the counter issues of fraudulent concealment as set out in its Reply.

Item 3(b) is an example of how BLG attempt to escalate matters by asserting that the Claimant asserts something which it does not assert. There is no plea that Mr Thaker senior was dishonest and it does not become so simply because BLG assert that the allegation against BT that he was acting with the authority of his co partner amounts to "an advancement of allegation of dishonesty against him personally". I simply do not see that. Merely because BT acts with the authority of his co partner and within that authority acts in a dishonest way does not mean BT senior himself is dishonest. It merely means that because the acts were done within his authority even though they were dishonest BT senior is vicariously liable for them as well. That does not involve a finding that he was personally dishonest.

(4) This has been answered in my view correctly by DLA.

(5) DLA have corrected this objection.

(6) It seems to me that this objection can be dealt with by de-capitalising the word Misappropriated and Government.

(7) I accept DLA's explanation as to how these funds are dealt with and the flow of funds identified by the Claimant.

(8) I am not quite sure what the purpose of this request is but it has been answered by DLA.

(9) This has been answered.

(10) This has been answered.

(11) This has been answered.

(12) This has been answered in both respects.

(13) This has been answered.

(14) This has been clarified.

(15) The request here is for the particulars of the allegation that BT acted on the instructions of an unidentified officer. The answer given by DLA is that it is not alleged that BT acted on the instructions of an unidentified officer. In my view there is an inaccurate request and an inaccurate answer. The Claimant appears to be asserting that BT amongst other things acted dishonestly in assisting amongst other an unidentified officer. That requires in my view clarification. If there is an unidentified officer the circumstances of involvement of that unidentified officer need to be given.

(16) I have already dealt with this under answer (10).

(17) This is the same answer in respect of the senior BT.

(18) This has already been answered in respect of BT senior.

(19) This has been answered.

(20) DLA has answered this. It is clear what the basis for the allegation of knowledge is derived from as set out in paragraph 407 B.

(21) This too has been answered by a reasonable reading of paragraphs 407 through to 407 C.

(22) This has been answered.

(23) This is a typographical error and has been corrected.

(24) This has been clarified.

(25) This has been answered.

OPPOSED AMENDMENTS

19. I now deal with the opposed amendments.

(1) As DLA say in their response (their letter paragraph 36) the purpose of the amendment was to clarify the nature of the conspiracy. There is as BLG say and overarching conspiracy but it is not a conspiracy which provides anybody who is a party to any laundering of Zambian government money. It is only those who participate in the conspiracy identified in paragraph 1095 which is a conspiracy which starts on 30th August 1999 with an agreement that the parties to it by unlawful means are conspiring to defraud the Claimant by misappropriation of monies belonging to it and to conceal such fraud. That fraud is perpetrated by various transactions which are subsequently identified. I see no difficulty about that as a plea. I accept that it will involve CM and BT dealing extensively with the entirety of the allegations under this part of the re re re-amended Particulars of Claim but so be it. The Claimants assume the burden for that and it seems to me it can only really be further considered when the Defendants have pleaded, led their evidence and the matter goes to trial or is reviewed before trial. It would be quite wrong to take a pre-emptive decision at this stage in a case like this with its complexity, multiple Defendants and large dealings of money which require explanation. Given the nature of the transactions the Claimants face difficulty without seeing what the Defendants say was the purpose of the transactions. That is why I ordered the Scott Schedule.

I do not see that these Defendants face an embarrassing or meaningless pleading. It is wide ranging but it does not mean they cannot meet it. If at the end of the trial the claim against them is not established then they have the protection of orders for security for costs. If on the other hand these allegations are struck out and the evidence that arrives at trial shows that it was wrong to strike them out it will be virtually impossible to reinstate the allegations against them at that late stage.

The essence of the allegation of participation in the conspiracy is in form 135-1138. The Claimants are seeking to persuade the court to infer that these (and other Defendants) were party to the conspiracy because of the nature of the transactions and their lack of response to them in any proper way.

I see no difficulty about this. The Claimants cannot establish a positive case at the moment although they may presumably change that in the light of the positive case (if any) provided by the Defendants to the various Scott Schedules.

(2) This has been answered in the light of the answer is an acceptable pleading in my view.

(3) This has been answered.

(4) I accept that the Claimants have not yet advanced a clear case for knowing receipt. DLA's answer is a reference to paragraph 92. However it seems to me that sooner or later the Claimants must in respect of all the payments in the light of the answers to the Scott Schedules identify which payments they assert they have a claim for knowing receipt as opposed to knowing assistance. I agree with BLG's contention that at the moment it is not satisfactory but it seems to me that I should not strike it out in advance of seeing what these Defendants say. I will give these Defendants an opportunity after close of pleadings to raise this matter further.

CONCLUSION

20. Save in item 3 (4) the entirety of BLG's objections in my view are not sustainable. It seems to me that whilst the pleadings are complicated that is necessarily so because of the nature of the case. I do not accept that these Defendants do not understand the case against them.
21. There is a world of difference between genuine concerns (of which there have been some raised by these Defendants) and matters designed not to be raised on the basis of genuine concerns as opposed to creating great difficulties in the hope of avoiding a merits based decision. These Defendants raised legitimate concerns as was shown by the hearings of 22nd and 23rd March 2006. However they have raised a large number of other matters which in my view were not legitimate and did not seem to have any purpose designed to assist the court and the parties in bringing this complicated action to trial. Actions like this require co-operation between the parties lawyers. If that co-operation disappears it makes cases like this unmanageable and is something I will not allow to happen.
22. The time has come in my view to draw a line over the pleadings issues and move on to the next stage of progression towards the trial.
23. I will consider written submissions as to the timetable to plead to the new pleading
24. I will consider written submissions if necessary as to costs. My provisional view is that the costs of these applications should be costs in the case. It seems to me that where one is dealing with allegations of the nature of fraud and conspiracy it is best left for these matters to follow the determination of what is the true position of the action. I leave out of that the normal consequential costs orders which will follow from permission to amend. Any costs of re pleading incurred by these Defendants will be their costs in any event.
25. If anybody wishes to seek to persuade me that I should make some other order as to costs they must do so within 7 days of the delivery of this judgment when I will fix a short hearing at 09.30 on a day subject to my availability.