Category Archives: Commercial and Chancery litigation

HIGH COURT (CHANCERY DIVISION) ENTERS JUDGMENT FOR THE CLAIMANTS FOR OVER £22.7 MILLION

Breach of Fiduciary Duties, Chancery Division, Commercial and Chancery litigation, Judgment millions

HIGH COURT (CHANCERY DIVISION) ENTERS JUDGMENT FOR THE CLAIMANTS FOR OVER £22.7 MILLION

Arfan Khan represented the successful Claimants in Gangat v Jassat throughout the litigation instructed by Pandya Arbitration Global.  

The Claimants, former part-owners of the Jumbo Group in South Africa, through third parties transferred substantial funds in millions to Swiss accounts in the 1980s and 1990s allegedly in breach of the South African Exchange Control Regulations to avoid the consequences of the Apartheid. Later, when the Apartheid was over, they regularised their financial affairs with the South African Revenue Service. 

The Defendant, a British national, took control of these funds and made investments on the Claimants’ behalf, amassing a significant portfolio of cash and property. Despite holding these assets, the Defendant refused to return them. After over seven years of litigation, the High Court ruled in favour of the Claimants, ordering an account for breach of fiduciary duty. 

The Defendant’s appeal against the decision ordering an account was dismissed by the Court of Appeal (Lord Justice Nugee, Lord Justice Stuart Smith, and Lord Justice Warby) on all grounds.  

Thereafter, the High Court awarded the Claimants an interim payment in the $millions and recently entered judgment for the Claimants for over £22.7 million including costs.  

 The reported judgments can be accessed through the following links:

Gangat v Jassat (2022) EWCA 604 (Court of Appeal)
Gangat v Jassat (2021) EWHC 2644 (Ch)

The recent order entering judgment has not been made publicly available.

 

Court of Appeal grants permission to appeal

Commercial and Chancery litigation, Court of Appeal Barrister, Professional misconduct - Legal test, Public Law - Court of Appeal, , ,

The Court of Appeal (Civil Division) has granted permission to appeal on the papers in a second appeal in Okpara v General Medical Council [2019] EWHC 2624 (Admin). The appeal raises an important point of principle regarding whether sexual misconduct appeals fall within a category where an appeal court can more readily assess whether a particular sanction is appropriate and thus attach less weight to the expertise of a tribunal.

Arfan Khan acted for the successful Appellant.

 

 

Arfan Khan leads against HMRC in a first time tax appeal

Appeal, Chancery Division, Chancery Litigation, Commercial and Chancery, Commercial and Chancery litigation, Commercial and International Law, Court of Appeal, Leading Chancery Barrister, Leading Counsel, Tax and Chancery Chamber,

Arfan Khan led Mr Joseph Howard in the Court of Appeal on a first time tax appeal of general public importance.

The Appellant is an Italian company. It provides containers and logistics services across Europe. The Appellant arranged the transport of goods for a customer, a Romanian company, GBT. This included a quantity of wine, which was seized by UK Border Force on the basis that excise duty had not been paid.

On 12 May 2015, HMRC issued an assessment to excise duty in respect to the seized wine to GBT. On 17 December 2015, HMRC issued the appellant with a reduced penalty assessment calculated on the basis that the Appellant’s conduct was not deliberate.

The Appellant appealed to the FTT on the basis that Article 37 of Directive 2008/118/EC (“the Excise Duties Directive”) meant that as the wine had been lawfully seized and destroyed, no excise duty point ever arose, the appellant was an innocent agent, and the penalty assessment was out of time. The FTT dismissed the appeal.

The Appellant appealed to the Upper Tribunal. The Upper Tribunal granted permission to appeal. However, it dismissed the appeal holding that Article 37 did not apply. The Appellant applied directly to the Upper Tribunal for permission to appeal to the Court of Appeal. Arfan Khan was then instructed and led a written skeleton argument for permission to appeal to the Court of Appeal.

The Upper Tribunal exceptionally granted permission to appeal against its own decision on the Article 37 ground. It held that the appeal raised a point of general public importance in respect of which there were real prospect of success.

The Respondent filed a Respondent’s notice seeking to uphold the Upper Tribunal on the basis that excise duty was chargeable by reason of a deemed duty point following the reasoning in Jones v HMRC, and that Article 37 did not as a result apply.

The Respondent’s notice proceeded contrary to what was alleged to be written concessions made by the Respondent. It was alleged that the Respondent had conceded before the Upper Tribunal that the basis of seizure did not necessarily require duty points to arise where the goods had been lawfully seized, and there was no challenge to the legality of the seizure.

Following the grant of permission, the Appellant filed supplemental submissions in response to the Respondent’s notice. These included a novel submission, not considered in Jones v HMRC, namely that, if the statutory deeming provisions apply to bar jurisdiction, they should be set aside in order to give effect to Article 37 of the EC Directive and Article 47 of the EU Charter and/or declared incompatible with Article 6 of the ECHR. The supplemental submissions distinguished the decision in Jones.

The Court of Appeal (Lord Justice Patten, Lord Justice Baker, and Mr Justice Mann) dismissed the appeal holding:

“50. As Mr Khan and Mr Howard on behalf of the appellant accepted in the course of the hearing before us, unless Article 37 subsequently disapplied its effect, there can be no doubt that the provisions of Article 33 were satisfied. The wine in the fifth container had been “released for consumption” in Italy. At the point of arrival at Purfleet, it was being “held for commercial purposes … in order to be delivered here”. Accordingly, it was subject to excise duty here and excise duty became chargeable here. At that point, under regulations 5 and 6 of the HMDP Regulations, an “excise duty point” arose and the appellant, being a person “concerned in carrying … the goods”, became liable to a penalty under paragraph 4 of schedule 41 to the Finance Act 2008.

51. Did Article 37 apply so as to prevent excise duty being chargeable on the wine? In my judgment, it did not, for the reasons identified by the UT at paragraphs 61 to 71 of its decision. …

52. In the context of this appeal, the construction of Article 37 turns on two phrases: (1) “during their transport in a Member State” and (2) “as a consequence of authorisation by the competent authorities of that Member State”.

53. I agree with the UT that “transport” should be given its ordinary meaning. For my part, I derive no assistance by comparing and contrasting the use of the word “movement” in Article 38. The wine in the appellant’s container was being transported from the ship to its ultimate destination in the UK. Had it continued on its journey, it would have been “transported” until it reached its destination. But it did not continue on its journey. It was seized by Border Force and held by that agency until it was destroyed following forfeiture. At the time of its destruction, it was not being “transported”.

54. As for the second phrase, I do not accept the submission that the ultimate destruction of the wine by or on behalf of Border Force following forfeiture falls within the scope of the phrase “as a consequence of authorisation by the competent authorities”. The destruction of the wine following forfeiture took place on the orders of Border Force. The word “authorisation” means the granting of official permission. The plain and obvious purpose of including that phrase in Article 37 is to cover the destruction of goods which are partially, but not totally, destroyed in transit. Article 7(4) provides that, for the purpose of this Directive, goods shall be considered totally destroyed or irretrievably lost when they are rendered unusable as excise goods. But there will be other cases where the goods are substantially damaged while being transported but have not become totally unusable (for example, where a proportion of a consignment of wine bottles are broken but the remainder are intact). Article 37 allows for circumstances where the competent authorities may formally agree to the destruction of the remainder so as to remove them from the scope of the duty”.

The Court of Appeal held that the Respondent’s notice had become academic by reason of the Appellant’s concession on appeal as follows:

“63. I would be reluctant to embark on a lengthy analysis of HMRC’s alternative argument raised in its respondent’s notice based on its interpretation of the decision in Jones. I take that view for three reasons. First, as I have just concluded, I consider the UT’s decision as to the construction of Article 37 was correct. On behalf of the appellant, Mr Khan in effect accepted at the outset of the hearing before us that, subject to its being subsequently removed by Article 37, an excise duty point arose under Article 33, and it must have persisted. The two factors which HMRC are seeking to have “deemed” from the failure of the appellant to contest the condemnation of the wine – that excise duty was chargeable and an excise duty point had arisen – are therefore conceded by the appellant. The “deemed duty” point is therefore of academic interest only in this appeal..”.

As a result, and amongst other reasons, the Court of Appeal refused to offer any expansive dicta on the Respondent’s notice. However, it concluded that the Upper Tribunal’s comments on the interpretation and application of the decision in Jones (based on the Respondent’s concession below) should not be regarded as authoritative. The Court of Appeal did not permit the Respondent to resile from what the Upper Tribunal described as a concession. It left open the possibility of argument in future cases.

Arfan Khan has a specialist appellate practice in Chancery, Commercial and Public law. He also has a substantial litigation practice in Chancery, Commercial and Public law. He is an experienced pleader, as evident from his numerous reported cases at appellate level, as well as in the High Court both as a leader and sole counsel.

The Court of Appeal judgment can be access here:

https://www.bailii.org/ew/cases/EWCA/Civ/2020/405.html

General Transport v HMRC

 

Court of Appeal allows appeal in Yadly Marketing

Commercial and Chancery litigation, Court of Appeal, Court of Appeal allows appeal in Yadly Marketing, Practice - Court of Appeal, Statutory limitation periods, ,

Arfan Khan was instructed as lead Counsel and led on the appeal to the Court of Appeal. The appeal was allowed. The case is reported as Yadly Marketing v Secretary of State for the Home Department [2016] WLR (D) 621; [2016] EWCA Civ 1143.

The full judgment can be accessed online here or by clicking the PDF link below:

http://www.bailii.org/ew/cases/EWCA/Civ/2016/1143.html

Yadly v Secretary of State pdf

In so far as material, the case summary reported in the [2016] WLR (D) 621 reads as follows:

“Yadly Marketing Co Ltd v Secretary of State for the Home Department [2016] EWCA Civ 1143

Arden, Beatson Henderson LJJ

2016 Nov 8; 23

Practice — Documents — Filing — Penalty notice issued in respect of overstaying employees — Last day for filing appellant’s notice falling on public holiday when court office closed — Appellant’s solicitor filing notice day after — Whether statutory language to be construed as granting an extra day — Immigration, Asylum and Nationality Act 2006 (c 13), s 17(4)

The Home Office’s Civil Penalty Compliance team issued a civil penalty notice on the employer pursuant to section 15 Immigration, Asylum and Nationality Act 2006 in respect of employees who were working without appropriate leave. The employer filed a notice of objection under section 16. The Secretary of State issued an amended notification of liability on 25 April 2014, in which it was stated that, under section 17(4) of the 2006 Act, any appeal had to be brought on or before 26 May 2014, which in fact was a bank holiday Monday when the court offices were closed. On 27 May 2014 the employer attempted to issue an appeal at a county court which wrongly refused to accept it. A further attempt to issue the appeal was again wrongly refused on 28 May. The employer then posted an appellant’s notice to a different county court and the appeal was lodged on 30 May 2014. When the case was listed for appeal the Secretary of State applied for the appellant’s notice to be struck out as out of time. The judge allowed the Secretary of State’s application, determining that there was no provision in the 2006 Act for an extension of time for appealing, that CPR r 2.8(5) did not apply to statutory time limits and that the delay between the rebuff received at the county court on 27 May and the papers arriving at a different county court on 30 May indicated that the employer had not done all it could to bring the appeal within the prescribed time limit and therefore there were no exceptional circumstances justifying a time extension.

On the employer’s appeal—

Held, appeal allowed. While it was not open to the court to extend the time limit of a statutory period for the bringing of an appeal under section 17 of the Immigration, Asylum and Nationality Act 2006, where the last day of the specified number of days fell on a public holiday or on a day when the relevant public office was closed for the entire day, section 17 was to be construed as requiring the delivery of the relevant document to the court office itself on the following business day. Further, while the scope for departure from a 28-day time limit such as that in section 17 was extremely narrow, a person was entitled to serve notice at the last possible moment and the relevant period was not to be cut down by bringing it forward. In the present case, the time limit would have been brought forward by three days and, therefore, the employer had been entitled to file its appellant’s notice on the day after the bank holiday. Moreover, the employer had done all it could to issue the appeal in time and the county court’s error constituted exceptional circumstances justifying an extension of time and the judge was wrong to determine otherwise (paras 27, 36, 38, 41, 45, 46).

Pritam Kaur v S Russell & Sons Ltd   [1973]  QB  336, CA applied.

Van Aken v Camden London Borough Council   [2003]  1  WLR  684, CA, Mucelli v Government of Albania   [2009]  1  WLR  276, HL(E) and Adesina v Nursing and Midwifery Council   [2013]  1  WLR  3156, CA considered…”.

http://cases.iclr.co.uk/Subscr/search.aspx?path=WLR+Dailies%2Fwlrd2016%2Fwlrd2016-621

Court of appeal grants permission to appeal in second appeal

Bankruptcy, Commercial and Chancery, Commercial and Chancery litigation, Insolvency, , , ,

Insolvency – Bankruptcy- defrayment of judgment debt – nature of legal test – second appeal – stay of execution

Arfan Khan successfully represented the appellant after taking over the case on appeal in the Court of Appeal.

The appellant applied to vary a judgment debt to pay by way of affordable instalments. That application was heard in the County Court at Central London under CPR r 40.9A. The District Judge allowed the application, ordering the debt to be defrayed at an affordable rate, on the basis that it was reasonable and proportionate to do so.

The respondent appealed to the Circuit Judge, contending, amongst other points, that the District judge applied the wrong test, and the test was whether exceptional circumstances were present. The respondent relied on the case of Ameslam [2008] EWHC 3226 (TCC), contending that the creditors right to present a bankruptcy petition was prejudiced as a result of the decision to defray. The Circuit Judge allowed the appeal.

The appellant appealed to the Court of Appeal and sought a stay of execution pending the outcome of appeal. Prior to the receipt of the appellant’s skeleton argument, the respondent, through written submissions from Counsel, objected to the grant of permission to appeal on the ground that the second appeal test was not met.

The appellant’s skeleton argument argued that the test for the grant of a second appeal was met. There was a point of general public importance arising on this appeal: what is the applicable test to determine a debtor’s application to vary payment of a judgment debt under CPR r 40.9A? Alternatively, for a number of reasons, there was some other compelling reason why the appeal ought to be heard.

It was argued that the case of Ameslam, relied upon by the respondent, was not on point. It concerned CPR r 40.11 and not CPR r 40.9A. Amaslem was in any event distinguishable. The appellant contended that CPR r 40.9A contains a broad discretion. That discretion was aimed at avoiding bankruptcy in appropriate cases where the judgement debt can be paid by way of instalments.

It was argued in the appellant’s skeleton that this was consistent with the policy rationale behind bankruptcy legislation, which is to release individuals from debt, so as to permit a fresh start by increasing the circumstances in which any remaining debt (actual or contingent) is provable in the bankruptcy. The appellant relied on the decision of Richards J (as his Lordship then was) in Re T & N [2006] 1 WLR 1728.

The appellant contended that this analysis was consistent with the provenance of Rule 40.9A, which confirmed the correctness of the District Judge’s judgment. The right to present a bankruptcy petition was not prejudiced because the respondent could apply to vary the District Judge’s order at any time under CPR r 40.9A (15). In any event, that right was not absolute because a bankruptcy order itself could be rescinded or varied.

In the alternative, it was argued in the appellant’s skeleton that, even if the test was of exceptional circumstances, that test was met on the facts. The Circuit Judge erred in holding otherwise.

Lady Justice Arden granted permission to appeal on the papers on the basis that “Compliance with conditions for second appeal and requirement for arguability” was “shown by the appellant’s skeleton argument”. Her Ladyship also granted a stay of execution.

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Arfan Khan leads appeal in the Court of Appeal

Commercial and Chancery litigation,

Arfan Khan leads appeal of general public importance in the Court of Appeal

Statutory limitation periods – principle and practice

Arfan Khan is instructed as lead Counsel in the Court of Appeal following the grant of permission to appeal by the Court of Appeal on the papers. The appeal concerns the correct approach to the computation of a limitation period under statute. Lady Justice Arden held that sufficient prospects of success were shown by the Appellant’s skeleton, and that the calculation of time for the purposes of an enactment was “clearly an important point of principle and practice”.

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Bank’s High Court claim for £9.5 million settles out of Court

Banking and Finance, Chancery Litigation, Commercial and Chancery litigation

Bank’s High Court claim for £9.5 plus interest settles out of Court

Contract of guarantee – limitation periods – demands

Arfan Khan successfully defended complex claims in the High Court Chancery Division. The claims were pursued by a bank against the Defendants for £9.5 million plus interest, including possession of land. A legal charge was procured by the bank to secure the alleged indebtedness.

The bank issued a demand for the monies in 2003. In 2014, the bank issued claims for both a money judgment and possession orders in relation to three separate plots of land. By 2015, the alleged debt was claimed to stand at £9.5 million plus interest.

The bank through Counsel, and its legal team, contended that, whilst the claim had been issued in 2014, time started to run from the date of the demand in 2003 because the relevant documents expressed the liability to be repayable on demand. The bank contended that a limitation period of 12 years applied and, therefore, the bank’s claim for the money judgment and possession were in time.

The guarantees and the charge, however, contained a primary debtor clause, which guaranteed the alleged indebtedness as a primary debtor, rather than as a surety only. The Defendants contended that there was a distinction between an ordinary contract of surety in relation to which a demand was necessary before the indebtedness could be claimed, and a contract containing a primary debtor clause. The Defendants contended that, where there is a primary debtor clause in a guarantee, rendering the surety also a primary debtor, there is no need for a demand, even where the indebtedness is expressed to be repayable on demand: MS Fashions Ltd v Bank of Credit and Commerce International SA [1993] Ch 425; TS & S Global Ltd v John Fithian Franks [2007] EWHC 1401.

The reasoning behind this appears to be that the character of the agreement to pay is no longer a collateral one, but an agreement to pay a present debt for which a demand is not a condition precedent: TS & S Global Ltd v John Fithian Franks [2007] EWHC 1401 at para [18].

Accordingly, the Defendants argued that a demand was not necessary. It was argued, therefore, that time started to run from the date of the breach in 2001 rather than from the date of the demand in 2003. That being so, the Defendants contended that the 2014 claims for a money judgment and possession of land were time barred.

In any event, the Defendants contended that the bank’s claim for continuously accruing interest in excess of £5 million attracted a six-year limitation period and was time barred. The bank could only claim continuous interest limited to the last years rather than from the date of the demand.

In respect of the possession claim, it was contended that the limitation period of 12 years started to run from the date of the breach in 2001. This was so irrespective of whether or not the bank unequivocally demanded possession at that date or forbore from doing so. The Defendants relied on Ash v National Westminster Bank [2007] 2 P & C.R. 27.

The Defendants also argued that the bank could not, in any event, seek possession of the land because there were agricultural tenancies in place within the meaning of s.1 and 2 of the Agricultural Holdings Act 1986.

The Defendants issued applications for strike out and summary judgment which were listed to be heard on the morning of a four-day trial.

The bank subsequently abandoned its interest claim falling outside the six-year limitation period, and on the morning of the trial, after the exchange of skeleton arguments, settled.