England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
(MR ANTHONY MANN QC)

		Royal Courts of Justice Strand London WC2 Wednesday 11th April 2001

LORD JUSTICE PILL: Lord Justice Tuckey will give the first judgment.

LORD JUSTICE TUCKEY:

Introduction.

1. Is a constructive trust claim based on dishonest assistance a matter "relating to tort, delict or quasi delict" for the purpose of Article 5(3) of the Brussels Convention? This question arises on appeal from Anthony Mann QC, sitting as a Deputy High Court Judge, who held that it was, and that the harmful event alleged by the claimants (Casio) against the sixth defendant (Kaiser) who is domiciled in Spain, occurred in England. He also held that the English courts had jurisdiction over the claim against Kaiser under Article 6(1) of the Convention because it was connected to a claim against a domiciled defendant, Mrs Patel. Kaiser challenges each of these decisions.

The Claim.

2. These issues of jurisdiction fall to be determined by reference to the allegations made in the original statement of claim served in July 1998. I take the facts from this pleading and gratefully adopt the judge's summary of them as follows:

"Casio is the well-known Japanese manufacturer and supplier of electronic goods. Sayo, the first defendant, was a manager at its Tokyo office; Hasegawa, the second defendant, was a friend or associate of Sayo and resident in, or frequently posted to, New York. Tsuru, the third defendant, was a friend or associate of Hasegawa, and the fourth defendant, Cranest, is a company incorporated in a United States jurisdiction and is controlled by Tsuru. It is alleged that Sayo conspired with Hasegawa and Tsuru to get control over a substantial amount of Casio's assets and, pursuant to that conspiracy, in February 1997 Sayo got control of US$30 million of Casio's money which he was supposed to invest for the purposes of Casio. Tsuru got control of the money pursuant to a power of attorney which is alleged to have been forged and, having passed the money through various US bank accounts, in March 1997 he procured its transfer to an account at Barclays, Knightsbridge, in Casio's name but on which Sayo and Tsuru were signatories. US$25 million was then transferred by or at the behest of Tsuru in April 1997 to a second account at the same branch, this time under the control of Tsuru alone. The remaining $5 million remained in the first Knightsbridge account until $4.52 million was transferred into the second Knightsbridge account, but that is not germane to the issues I have to consider. Tsuru is said to have become constructive trustee and to owe fiduciary duties to Casio.

At this point Mr Kaiser and some associated defendants come into the story. The fifth defendant is Ocean View Marketing Ltd ("OVM"), an Isle of Man company. Mr Kaiser is said to be its President and Mr Wolpow, the seventh defendant, is said to be its managing director. It is alleged that the acts of OVM complained of in this statement of claim were procured and directed by Mr Kaiser and/or Wolpow and they were therefore personally liable for them. On 1st May 1997 Tsuru entered into an agreement described as the Los Frailes Contract, which provided for investment of the $25 m in the second Knightsbridge account in a project to construct a golf course on Gran Canaria. The agreement provided inter alia for the US$25 m to be transferred by Tsuru into an account in London at Alpha Credit Bank AE, (the 14th defendant to this litigation, joined for discovery purposes only) called "Harris Bank International Ltd New York, Ref [OVM]... Account No 60011"; and it provided for the return of the money in a year and a return in the meanwhile. An agreement entered into four days later is said to provide for an additional secret profit to be made by Mr Kaiser and/or Wolpow by their being allocated an equity share in the Los Frailes Project. On 6th May the money was transferred by Tsuru from the second Knightsbridge account to the Alpha account on which the signatories were Tsuru and Wolpow. In paragraph 8 it is pleaded that this is an OVM account notwithstanding that Tsuru was a joint signatory on it. From the Alpha account in London money was moved on to an OVM account in the Isle of Man on 23rd May, and on 6th June it was moved to an account in the name of OVM and/or Charivari at the Northern Trust Company in Illinois.

Charivari a Barbados company. I need to follow the money on from there, in general terms, in order to show how Miss Patel is said to be implicated and the basis on which she is sued. Missing out one or two events which are not germane to the purpose of this narrative, on 19th August the $25 million was moved into an account at Crane Ltd, the tenth defendant, in Jersey, from where it was moved to an account in New York in the name of Crane and/or Charivari on 9th September. Crane is an Isle of Man company in which a Mr Kelso (the 11th defendant) and Miss Patel are said to be directors, and it is said that the acts of Crane complained of in the Statement of Claim were authorised, directed or procured by Kelso and Miss Patel and that they are personally liable for them. From Crane there were further disposals of the money in various detailed ways; I omit the detail here. On and after 19th September there were further movements of money which are said to have been orchestrated by Tsuru, details of which are not important save to note that they are alleged to have been paid to his order for his own benefit and/or the purposes of (inter alia) OVM, Kaiser and Crane. As a result of all this the Casio money was dissipated."

3. As well as being liable for conspiracy, Tsuru is alleged to have become a constructive trustee of Casio's money by his participation in the fraud and because after obtaining the money he exercised dominion over it, expressly informing OVM, Kaiser and Patel, among others, that it belonged to Casio.
4. The legal basis for the claims against Kaiser appear in paragraphs 8 and 9 of the pleading. The relevant parts say:

"8. ... Casio infers that neither OVM or Kaiser or Wolpow intended at any stage that the Casio monies they obtained from Tsuru would be applied towards investment in the or any Los Frailes Project (which did not in fact exist) and their representations to Tsuru to induce him to participate therein and then the steps they took to induce him to relinquish control over the funds were fraudulent. Further, at the latest by about August 1997 they had been informed by Tsuru that the monies in fact belonged to Casio and in the circumstances they knew or had they made the enquiries that an honest and reasonable person would have made, would have realised that Tsuru's transfer of the $25 million was a breach of fiduciary or equitable duties owed by him to Casio or was a transfer of monies impressed with a constructive trust and/or equitable charge and/or equity. Accordingly, on receipt of the monies into their control by the transfer to the OVM account at Alpha, or at latest on being informed by Tsuru that the monies were Casio monies they each owed Casio duties as constructive trustee ...

9. In breach of their duties to Casio as constructive trustee ... OM and/or Kaiser and/or Wolpow:

(1) Failed to take any or any adequate or proper steps to preserve the US 25 million ...

(2) Fraudulently induced Tsuru to invest the same in the Los Frailes Project which was bogus and induced him to transfer the sums to their control outside the jurisdiction at their account at Barclays Bank, Isle of Man;

(3) On about 6th June 1997 transferred the said sum from OVM's account at Barclays Bank, Isle of Man, to an account ... in the name of OVM and/or Charivari;

(4) Thereafter and by 29th July 1997 relinquished control over the US$25 million of Casio monies to Charivari."

5. The claim against Charivari, Marlowe, Crane, Kelso and Patel is put in much the same way. They are alleged to have known that the money was Casios from about late July and in any event by 21st August 1997 because they were so informed by Tsuru and/or OVM. They are alleged to have been in breach of their duties as constructive trustees for failing to preserve the US$25 m and by making various transfers, deposits and investments with it between August and December 1997. These transactions included payments totalling not less than US$8.1 m by Crane to OVM and/or Kaiser.
6. The claims for relief against OVM and Kaiser are the same as those against Crane and Patel, namely "equitable damages and/or equitable compensation for breach of trust and/or fiduciary duty" and accounts.
7. The first point taken on this appeal is that the statement of claim only alleges knowing receipt and that the judge was wrong to conclude that dishonest assistance was also being alleged. The judge said (paragraph 16):

"Overall the factual allegations are similar to claims based on constructive trusteeship. They purport to be based on knowing receipt, but that cannot be right for Wolpow or Kaiser who did not technically receive them. (OVM did). As against the individuals the claim would be more appropriately put on a knowing assistance basis."

At paragraph 20 he said:

"It is ... open to (Casio's counsel) to say that as a matter of pleadings he has alleged that Mr Kaiser procured the receipt by OVM of the money within the jurisdiction and procured or directed its payment out again knowing that the money was Casio's and that Mr Tsuru was acting in breach of his own duties. That could be described as an act of dishonest assistance."

8. Mr Doctor QC, for Kaiser, submits that the judge's conclusion is unclear. The claim was pleaded as one of knowing receipt. That is what paragraph 8 says, and for that reason no acts of dishonest assistance are pleaded against Mr Kaiser. An allegation of knowing (dishonest) assistance was only added by amendment.
9. I do not accept these submissions. The pleading is not a model of clarity, but it alleges that Tsuru held the monies on constructive trust; that Kaiser had the requisite knowledge that this was so; and that Kaiser (on his own behalf or by procuring OVM to do so) assisted in a breach of that trust by dishonestly procuring the receipt by OVM of Casio's money for the purported Los Frailes Project and then paying that money away. Thus all the factual matters necessary to establish a claim for dishonest assistance against Kaiser were pleaded.

Article 5(3).

10. This Article says:

"A person domiciled in a contracting state may, in another contracting state, be sued...

(3) In matters relating to tort, delict or quasi delict in the courts for the place where the harmful event occurred. "

Like Article 6, it is part of the special jurisdiction section of the Convention. The general provision in Article 2 is that persons are to be sued in the courts of their domicile. In Kalfelis v. Shroeder [1988] ECR 5565, the ECJ said that the special jurisdiction provisions, as exceptions to the general principle, should be interpreted restrictively. In the interests of uniformity and equality Article 5(3) has to be given an autonomous Convention meaning.

11. What is the scope of Article 5(3)? The ECJ has given little general guidance. The judge found some guidance in what was said in the House of Lords in Kleinwort Benson v. Glasgow City Council [1999] 1 AC 153. In that case the House rejected the argument that a claim for unjust enrichment fell within Article 5(3) because, other than in exceptional circumstances, such a claim did not pre-suppose either a harmful event or a threatened wrong. The judge continued (paragraph 17):

"The same cannot be said of constructive trust claims, or at least those based on knowing assistance. In those cases there is scope for describing what happened as amounting to or involving a harmful event within the meaning of Article 5(3). Such a conclusion is supported by the fact that even though the English law of tort is not operating where equity imposes a constructive trust, one can see parallels. A wrong is being committed and loss can be said to be caused or at least contributed to."

12. Mr Doctor says the judge was wrong. A claim for knowing assistance arises where A assists B's breach of fiduciary duty owed to C. A's liability is accordingly accessory to that of B. The harmful event is therefore B's breach of duty, and the place where this happens cannot properly provide a connection between A and the relevant jurisdiction. Secondly, Mr Doctor submits that Article 5(3) requires there to be a causal connection between the harmful event and the damage claimed. As A's act of assistance to B need not itself cause any damage, this requirement is not met.
13. In support of his second submission, Mr Doctor relies on Bier v. Mines de Potasse D' Alsace [1976] ECR 1735. In that case the Dutch plaintiff claimed that the water supply to its nursery had been polluted by the French defendant's discharge of waste into the Rhine in France. The court held that the meaning of the expression:

"'Place where the harmful event occurred' must be established in such a way as to acknowledge that the plaintiff has an option to commence proceedings either at the place where the damage occurred or the place of the event giving rise to it"

because either place constituted a significant connecting factor from the point of view of jurisdiction. (Paragraphs 15 and 19).

Mr Doctor, however, relied on paragraph 16 of the judgment where the court said:

"Liability in tort, delict or quasi delict can only arise provided that a causal connection can be established between the damage and the event in which that damage originates."

14. I think Mr Doctor's approach is over analytical. He is right that the nature of A's liability is accessory and that B's breach of trust can be characterised as a harmful event, but it does not follow that A's unlawful act of assistance cannot also be so characterised. It may be a harmful event as well. Just as a principal and his accessory may both be guilty of criminal offences, so it seems to me in this context that the accessory's dishonest act of assistance can be a harmful event. Liability depends upon establishing a wrongful act. In Grupo Torras v. Al Sabah (Court of Appeal, 2nd November 2000), this Court said at paragraph 123:

"Dishonest assistance can therefore be described as equitable wrongdoing (the expression used by Auld LJ in McMacmillan v. Bishopsgate [1996] WLR 387 at page 407, citing Charles Harpum's article, Accessory Liability for Procuring or Assisting a Breach of Trust (1995), 111 LQR 545, 546). The notion that dishonest assistance could be regarded as a tort was firmly rejected by this Court in Metal & Rohstoff v. Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391, 474. But that was in the limbed context of the old RSC Order 11, Rule (1)(1)(f). In Dubai Aluminium v. Salaam [1999] LLR 415, page 467, Rix J recognised that equitable wrongdoing, although not a tort in the eyes of English law, has marked similarities to it:

'It is true that liability in dishonest assistance is not a liability in tort: General Bank Nederland NV v. ECGD [1998] 1 Lloyds Reports 19. Rather it is a liability in equity to pay damages based on fault as Mr Justice Chadwick said in Arab Monetary fund v. Hashim (July 29th, 1994, unreported) at page 42B:

' ... the defendant is held liable in equity not because he is, or has been, a trustee of trust property, but because his conduct in relation to trust property has been such that he ought to be liable in damages for its loss as if he were a trustee who had disposed of the trust property from breach of trust. The claim is a claim for monetary compensation based on fault ..."

15. Grupo Torras also establishes that in a claim for dishonest assistance it is not necessary to show a precise causal link between the assistance and the loss (paragraph 119). Loss caused by the breach of fiduciary duty is recoverable from the accessory. This is the relevant causal connection for this purpose. In the absence of such a connection the accessory would be under no liability. So this type of claim does depend on there being "a causal connection between damage and the event in which the damage originates".
16. For these reasons I agree with the judge's conclusion that a constructive trust claim based upon dishonest assistance is within the scope of Article 5(3).
17. So the next question is whether the harmful event or the damage occurred in England. The judge expressed his conclusion about this as follows (paragraph 21):

"The knowing assistance type of constructive trusteeship arises where there are acts of assistance with the relevant knowledge. In this case, even if one assumes that Mr Kaiser was outside the jurisdiction when he acquired knowledge, conceived any necessary plans and gave any necessary instructions, nevertheless the actual act of assistance was in my view done in this jurisdiction. The act of assistance was the use of the Alpha account. Without that act the more abstract notions of authority and procurement would be of no use. The company account was the instrumentality by which (on the factual hypothesis of the statement of claim) Mr Kaiser achieved his assistance. The company account into which the money was paid (the Alpha account) so as to come within OVM's sphere for the first time was in this jurisdiction, and that was the account from which it left to come under OVM's sole control in the Isle of Man. I therefore find that the place of the event giving rise to damage for the purposes of Article 5(3) (as interpreted in the Bier case) was England."

He then went on to consider where the damage had occurred. He decided that it had either occurred when the $25 million was first abstracted by the first three defendants from Casio's proper accounts or when it was dispersed after it had left the Alpha account. Neither of these events occurred within the jurisdiction.

18. Mr Doctor submits firstly that the judge was wrong to conclude that Kaiser had any responsibility for payment of the Casio money into or out of the Alpha account. It is not alleged that this account was an OVM account or that he was signatory on or in control of the account.
19. I do not accept these submissions. The pleading sufficiently alleges that the Alpha account was an OVM account and specifically alleges that the acts of OVM were procured and directed by Kaiser. This obviously includes the payments into and out of the Alpha account even though he was not a signatory on that account.
20. Next, Mr Doctor contends that on a proper analysis the mere presence of the Alpha account within the jurisdiction does not result in an act of assistance taking place here. Allowing the use of the account did not assist Tsuru's breach of duty because it had already occurred by the time the money was paid into the account. Anyway the relevant act of assistance was the agreement to use the account which was not made in England. It is not permissible to look for tenuous connections with the jurisdiction. A broad view must be taken and the court is looking for strong connecting factors. In any event, it is not alleged that Kaiser had the requisite knowledge at the time the money was in the jurisdiction.
21. I think the judge's analysis of the position was correct. These cases are all about the movement of money. Casio's money moved into and out of a bank account in England and those movements were, it is to be assumed, procured and directed by Kaiser. In the process Tsuru lost all control over the money. Taking a broad view, if one is looking for the place where the harmful event giving rise to the claim for dishonest assistance occurred, I think it is where this bank account was located. I do not think there is anything in the pleading point the allegation is that Kaiser required the knowledge "at latest by about August 1997". The judge treated the relevant date as 23rd April 1997 since Kaiser admitted that he was told by Tsuru on that date that the money he had to invest was Casio's.
22. For these reasons I think the judge was right to decide that Casio's claim against Kaiser that he became a constructive trustee of their money by providing dishonest assistance fell within Article 5(3). This makes it unnecessary to consider Casio's respondent's notice which says that the judge was wrong to decide that the damage did not occur within the jurisdiction and that the knowing receipt claim did not fall within the scope of Article 5(3). As to the former, I am not at all sure that the judge was right to say that the damage to Casio only occurred when the money was abstracted from their accounts. There must be a strong argument for saying that damage was also caused when it was finally wrested the from Tsuru's control by the payment out of the Alpha account. As to the latter, as I understand his judgment, the judge did so simply on the basis that the receipt was OVM's and not Kaiser's. All I need say is I think this is a debatable point. The judge did not go on to consider whether the claim would have been within Article 5(3) if there had been a receipt and that question is best left to be answered in a case where it really has to be decided.
23. However, in his reply this morning Mr Doctor submitted that unless we decided the knowing receipt point in its favour, Casio could not advance their claim against Kaiser on this basis because in Kalfelis the ECJ made it clear that a court which has jurisdiction under Article 5(3) over an action insofaras it is based on tort or delict "does not have jurisdiction over that action insofar as it is not so based" even if that means that different aspects of the same dispute have to be adjudicated upon by different courts (paragraphs 19 and 20). This was referred to by Lord Goff in his speech in Kleinwort Benson as being one of the applicable principles underlying the provisions of the convention (at pages 166/167).
24. I accept that Mr Doctor is right about the effect of Article 5(3) on Casio's claim in knowing receipt, but in view of the conclusion I have reached about the applicability of Article 6, the point is academic.
25. Mr Doctor sought to expand upon this late submission to suggest that the English courts should also only be concerned with events which happened here. At least, he said, to the extent that anything which happened outside the jurisdiction could be characterised as a harmful event, the English courts would have no jurisdiction to consider it.
26. I do not agree. If the court concludes that Kaiser did provide dishonest assistance, it will be able to consider all the consequences of the breach of trust to which he provided such assistance wherever they occurred.

Article 6(1).

27. This Article says:

"A person domiciled in a contracting state may also be sued:

(1) Where he is one of a number of defendants in the courts for the places where any one of them is domiciled."

28. It is common ground that Patel is domiciled in England and that Casio has a genuine claim against her and a good arguable case on the merits against Kaiser. For Article 6(1) to apply there must also:

"Exist between various actions brought by the same plaintiff against different defendants a connection of such a kind that it is expedient to determine those actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings (Kalfelis, paragraph 13)."

29. Having referred to Kalfelis and the decisions of this Court in Gascoigne v. Pyrah [1994] 1 LPr 82, and the House of Lords in Sarrio v. Kuwait Investment Authority [1999] 1 AC 32, to which I will return, the judge said (paragraph 33):

"The fact that the claims against Miss Patel and Mr Kaiser are similar is not enough for these purposes. Nor is the fact that they have the same background in the sense that Miss Patel is in the same flow of money as Mr Kaiser albeit downstream. Of more significance is whether there is anything in those upstream facts or legal issues which might be decided differently in different proceedings so as to affect the end result. It seems to me that there clearly is. At the heart of these claims are the claims that the first three defendants, and in particular Mr Tsuru, were doing what they ought not to have done, and that what they did was a breach of duty. That lies at the heart of the constructive trust claims. Without it there is no constructive trust claim. If those points were decided differently in two different actions if separate actions were brought against each of Mr Kaiser and Miss Patel, then the results of those actions would, or could, be different."

He then went on to consider whether this was a real or theoretical risk. He noted that Tsuru had filed a defence in which he asserted that he had acted with Casio's authority and had done nothing wrong throughout, a defence which Mr Justice Neuberger was not prepared to reject summarily as being incredible, and continued (paragraph 35):

"No defendant (including Mr Kaiser) has yet admitted that Tsuru was acting improperly. Presumably those that ultimately seek to defend the claims will try to show that he was not, or might not have been, and the chances of their succeeding are not negligible. They might or might not succeed; and if proceedings take place in two different courts on two different occasions, the evidence, or even the view of the court of the evidence, might be different. All this means that two different courts approaching the matter in the future might come to two different conclusions on the point, and I think that the risk is real and substantial for these purposes. In my view that, by itself, is enough to entitle Casio to invoke Article 6(1) as against Mr Kaiser. So far as the common background of claims and the other common elements of the claims, can be taken into account, then the picture is even clearer - there is a clear and close link between the claims. Taking the broad common sense view that I am obliged to take of these matters, I think that it is clear that the claims in the unamended writ as against Mr Kaiser and Miss Patel are sufficiently closely linked to bring Kaiser within Article 6(1)."

30. Mr Doctor submits that the judge applied a test of irreconcilability which was too broad and that the issue as to whether the first three defendants were in breach of their duties did not bring the case within Article 6(1). Something more than a common issue of this kind was required. Here there was no common issue of fact or law which involved the actions, omissions or legal duties of both Kaiser and Patel. The fact that they were in a chain of wrongdoers is not enough.
31. So how should the court approach the question of the irreconcilability? It is accepted that the ECJ cases on Article 6(1) do not provide any real answer to this question. We were referred to a number of cases where Article 6(1) was held not to apply, but the reasons for this are fairly self-evident from the facts and I do not really find them helpful.
32. However, Mr Doctor relied heavily on the case of Reunion Europeenne SA v. Spliethoff's [2000] 3 WLR 1213. In that case French consignees of a shipment of peaches sued in France the Australian issuers of the bill of laiding under which the goods were carried (a contract claim) and the Dutch carriers and master of the ship in which they were carried (tort claims). There was no jurisdiction under Article 6(1) because none of the defendants were domiciled in France. The court, however, went on to refer to what was said in Kalfelis in paragraphs 8, 9, 13, 19 and 20, to which I have already referred, and said:

"It follows that two claims in one action for compensation directed against different defendants and based in one instance on contractual liability and in the other on liability in tort or delict cannot be regarded as connected." (Paragraphs 47 to 50)

I can see nothing in this judgment which cuts down, qualifies or explains what was said in Kalfelis. Rather, the court specifically endorses and follows the principles laid down by the court in that case. Their application to the facts of that case (which was strictly unnecessary) is no more than that.

33. The principal issue between the parties, as I see it, is whether the cases on Article 22 shed any light on the approach to Article 6(1). Article 22 gives any court, other than the court first seized, the discretion to stay an action "related" to an action brought in a different contracting state. For the purposes of this article, actions are deemed to be related:

"Where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."

34. So the language of Article 22 is almost identical to the language used by the ECJ in Kalfelis to which I have referred. Such an approach had been described as "the most logical" by the Advocate General in that case who "did not see any good reason for not transporting the purpose related criterion of Article 22 to cases where there are several claims" (paragraphs 11 and 12). I think it is an inescapable conclusion that this is what the ECJ intended. Mr Doctor's detailed analysis of the facts in Kalfelis did not I think in any way undermine this conclusion. One has of course to bear in mind that Article 22 does not itself confer jurisdiction, whereas Article 6 (which does) has to be interpreted restrictively. Nevertheless, I see no reason why the test of irreconcilability should not be broadly the same under each Article. If the ECJ had not intended this to be so, I think they would have made this clear in Kalfelis itself or in the more recent cases in which they have had to consider Article 6(1). They have not done so.
35. Sarrio, relied on by the judge, was an Article 22 case. The facts do not matter. In rejecting the view that Article 22 was only concerned with conflicting judgments about the primary facts necessary to establish the cause of action, Lord Saville, with whom all other members of the House agreed, said (at page 41):

"For these reasons I am of the view that there should be a broad common sense approach to the question whether the actions in question are related, bearing in mind the objective of the Article, applying the simple wide test set out in Article 22 and refraining from an oversophisticated analysis of the matter."

This judgment makes it clear that the court is not merely concerned with the risks of conflicting decisions giving rise to mutually exclusive legal consequences. It also makes it clear that the court will be concerned with the risks of conflicting decisions on questions of fact as well as law. This Court so held in Gascoigne where Hirst LJ at paragraph 45 said:

"Conflicting findings of fact, on the other hand, are virtually impossible to reconcile if different judges in different jurisdictions within the EEC, hearing and seeing different witnesses, reach different conclusions which have hinged on an assessment of the reliability of individual witnesses; and of course the problem may be compounded in cases where there are different procedures in the different national courts in the way in which they hear the evidence and assess it. Moreover, different findings of fact also frequently lead to different conclusions of law."

36. It seems to me that the judge's approach in this case was entirely consistent with the approach which I have considered above. He did not, as Mr Doctor suggests, simply identify a common question of fact or law and say that Article 6(1) applied. He considered the importance of what he described as the "upstream facts or legal issues" in terms of the end result and decided that if different courts reached different conclusions as to the propriety of Tsuru's conduct in particular, there was a real risk that for this reason different courts could reach different conclusions as to the liability of Kaiser and Patel. I think the judge's reasoning about this cannot be faulted. If so, applying the broad common sense approach advocated by Lord Saville, his decision that Article 6(1) applied to the claim against Kaiser was entirely justified. I should add that the judge could also have considered the downstream events to which I have briefly referred, where it is alleged that Kaiser and Patel (through Crane) were directly involved with one another in the movement and dissipation of the money.
37. Mr Doctor argues that, whatever the right approach, the risk of irreconcilable decisions is entirely theoretical in this case. He suggests that there is no prospect of the first three defendants participating in the English proceedings because none of them now has solicitors on the record. Even if they did attend and defend at the English trial, any Spanish proceedings by Casio against Kaiser would be conducted in their absence and so Casio's allegations against Tsuru would be uncontradicted there. I think this argument demonstrates that there is a risk rather than that it is theoretical. At this stage, the court must consider that in the English proceedings there is a real possibility that the court might accept that Tsuru was not in breach of fiduciary duty. The outcome of the issues about this are obviously highly dependent on the credibility of Tsuru and the oral evidence of other witnesses. If such evidence was not available to the Spanish court, there must be a real risk that it would reach a different conclusion to that of the English court.
38. I think the judge's conclusion that Article 6(1) gives this Court jurisdiction over the claim against Kaiser in these proceedings was right.
39. For these reasons I would dismiss this appeal. We were asked by Mr Doctor to consider referring the issues raised by it to the ECJ. I do not think this is necessary.
40. LADY JUSTICE ARDEN: I agree with my Lord's judgment, and that the appeal should be dismissed.
41. At a late stage in his reply, Mr Doctor proposed that if the allegation in paragraph 8 of the statement of claim were to be made in Spain in Spanish proceedings against Mr Kaiser there, Mr Kaiser would admit that the transfer to the Alpha account of the $25 million alleged to belong to Casio was made in breach of trust, and that Mr Kaiser's defence would be that he did not know that the transfer was in fact in breach of trust.
42. Miss Patel and Mr Kaiser are, however, alleged to be involved in a number of events consequent upon the transfer to the Alpha account. In view of the broad common sense approach set out in the Sarrio case and explained by my Lord, Lord Justice Tuckey, I do not consider that Mr Doctor's proposal takes this case outside Article 6(1) of the Convention.
43. LORD JUSTICE PILL: I also agree for the reasons given by my Lord, Lord Justice Tuckey, and add a word of my own only on one aspect of the case in relation to Article 5(3).
44. The paragraph provides that:

"A person domiciled in a contracting state may, in another contracting state, be sued.

(3) In matters relating to tort, delict or quasi-delict in the courts of the place where the harmful event occurred."

45. The effect of that Article was recently considered by the European Court of Justice in Reunion Europeenne SA v. Spliethoff's [2000] 3 WLR 1213. The Court stated at paragraph 27, having referred to several earlier cases:

"The rule of special jurisdiction in Article 5(3) of the Convention, the choice of which is a matter for the plaintiff, is based on the existence of a particularly close connecting factor between the dispute and courts other than those of the state of the defendant's domicile which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings."

46. One of the cases referred to was Handelskwekerij GJ Bier BV v. Mines de Potasse d'Alsace [1978] QB 708, where the place of the happening of the event which may give rise to liability in tort delict or quasi delict and the place where that event results in damage were not identical. Water courses in the Netherlands were polluted by the discharge of waste into the Rhine in France. At paragraph 14 the court stated:

"The form of words "place where the harmful event occurred" used in all the language versions of the convention leaves open the question whether in the situation described it is necessary in determining jurisdiction to chose as the connecting factor the place of the event giving rise to the damage or the place where the damage occurred or to accept that the plaintiff has an option between the one and the other of those two connecting factors."

The court's conclusion was (paragraph 24):

"Thus it should be answered that where the place of the happening of the event which may give rise to liability in tort, delict or quasi-delict and the place where the event results in damage are not identical, the expression "place where the harmful event occurred" in Article 5(3) of the Convention must be understood as being intended to cover both the place where the damage occurred and the place of the event giving rise to it."

47. In the present case, the event relied upon is that Kaiser had knowledge of a breach of trust by Tsuru, that Tsuru held the monies on constructive trust, and that Kaiser, on his own behalf, or by procuring OVM to do so, assisted in a breach of that trust by dishonestly procuring the receipt by OVM of Casio's money for the purported Los Frailes Project and then paying that money away. Those are the acts of Kaiser relied on to establish a harmful event within the meaning of Article 5(3).
48. In the course of its reasoning in Bier, the Court, at paragraph 16, stated:

"Liability in tort, delict or quasi-delict can only arise provided that a causal connection can be established between the damage and the event in which that damage originates."

49. In my judgment, the court in that paragraph was doing no more than stating a general principle of law. Causation was not the issue before the court. The court was not seeking to limit the category of events which may be harmful within the meaning of the article or the categories of persons who may perform those acts or be involved in those events.
50. Contrary to the submission of Mr Doctor, in my judgment the allegedly dishonest acts of assistance by Kaiser are capable of being harmful acts within the meaning of the Article. The definition does not confine acts to the acts of the principal actor. In this case it may be difficult to establish when and where the relevant damage occurred, but in my judgment it is not necessary to do so for present purposes.
51. I accept that a causal connection must be established in this case, as it must in all cases of tort. In my judgment it is sufficiently established upon the facts alleged in this case.
52. What is alleged is a breach of trust by Tsuru in which Kaiser assisted. There is, in my judgment, no requirement to establish a direct link between Kaiser and Casio without reference to events constituting the breach of trust. I agree with the acceptance in this Court in Grupo Torras, Court of Appeal, 2nd November 2000, of the statement made at first instance by Mr Justice Mance upon the facts of that case. Mr Justice Mance stated:

"The requirement of dishonest assistance relates not to any loss or damage which may be suffered but to the breach of trust or fiduciary duty. The relevant enquiry is ... what loss or damage resulted from the breach of trust or fiduciary duty which has been dishonestly assisted. In this context, as in conspiracy, it is inappropriate to become involved in attempts to assess the precise causative significance of the dishonest assistance in respect of either the breach of trust or fiduciary duty or the resulting loss."

53. In my judgment the causative connection is sufficiently established for present purposes, and Article 5(3) covers the facts of this case.
54. I agree that the appeal should be dismissed.

ORDER: Appeal dismissed with costs; appellants aplication to refer this appeal to the European Court of Justice refused; permission to appeal to the House of Lords refused; (formerly sealed) envelope to be delivered to claimant in the event that:

(i) no petition is made to the House of Lords within 28 days;

(ii) such petition is made and refused;

(iii) permission is given by the House of Lords and appeal is subsequently dismissed.

(Order not part of approved judgment.)