England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		19/08/2016

Mr Justice Knowles :

Introduction

1. Mr Abdulrahman Mansouri ("Mr Mansouri") was formerly Assistant Foreign Minister for the Kingdom of Saudi Arabia. He died on 5 June 2010. He has a number of surviving relatives. The Claimant ("Mr Khouj") is the Administrator of his estate. In his life Mr Mansouri appears to have been a wealthy man. It is not clear what has become of that wealth.
2. Acropolis Capital Partners Limited ("ACP") and Acropolis Capital Management Limited ("ACM"), the Defendants, are companies incorporated in England and Wales. At all material times their offices were at 73 Brook Street in Mayfair, London. This litigation concerns the role of ACP and ACM, if any, in the financial affairs of Mr Mansouri.
3. Mr Khouj seeks declarations that ACP and ACM were Mr Mansouri's agents or fiduciaries between at least 2002 and Mr Mansouri's death. Mr Khouj says that as a result he is entitled to inspect any documents in their control relating to assets owned by Mr Mansouri or relating to transactions or other business or activity undertaken by or for them on behalf of Mr Mansouri.
4. In this judgment, and in the findings made in it, I seek to do the best I can on the evidence available at this trial. It is in the nature of Mr Khouj's search for information, and ACP and ACM's resistance to that search, that there may be further information not available at this trial which confirms or tends against the findings that I make. However the findings I make will govern the decisions that I make at this trial.

The Defendants' position

5. ACP states that it is an investment adviser regulated by the FCA. Taking together its statement of case and what was put by its Counsel at trial, ACP accepts that it has been an investment manager and investment adviser, but only for two funds, the Acropolis Multi-Strategy Fund ("the Multi-Strategy Fund") and the Acropolis Multi-Strategy Plus Fund ("the Plus Fund").
6. Offering Memoranda for the Multi-Strategy Fund and the Plus Fund show ACP as investment manager. An agreement dated 11 December 2008 between ACP and ACM, with an accompanying service level document, refers to ACP's appointment as investment manager and provides for ACM and ACP to share premises, facilities and equipment and for certain ACM staff to dedicate their time to ACP activities. ACP says in its Amended Particulars of Defence, that it ceased to act as investment manager of the Multi-Strategy Fund on 30 April 2009.
7. In its Amended Particulars of Defence, settled by previous Counsel, ACM had said that it is "a company which provides property and hotel management services as well as accounting and administration services, but it does not carry out investment management activities". Before it had the name Acropolis Capital Management Limited, ACM was known as Acropolis Tourism Development Limited. The name change came in 2002.
8. ACP's and ACM's Counsel at trial, Mr Gilead Cooper QC (appearing with Mr James Walmsley), put to Mr Khouj as part of the Defendants' case that ACP delegated some of ACP's role to ACM.
9. In a witness statement of 4 December 2013 Ms Carol Lapwood ("Ms Lapwood") described herself as an employee of ACM but the Company Secretary of ACP and ACM, Head of Operations for both companies, and responsible for all corporate records and statutory filings, treasury management and IP operations for both companies.
10. She stated that the directors of ACP are Mr Vinod Vaghadia ("Mr Vaghadia") and Mr Cameron Chartouni, while the directors of ACM are Mr Vaghadia and Mr Mostafa Fawzi. ACP and ACM were not, said Ms Lapwood, under common ownership: ACP was owned by Acropolis Capital Limited (registered as an investment manager in Guernsey) while ACM was owned by Acropolis Capital Holdings Ltd, a BVI company.
11. ACP and ACM accept that Mr Mansouri was a client of the Multi-Strategy Fund. They however deny they have any relevant relationship with or obligation to Mr Mansouri. From that position, and citing confidentiality of other clients, they have declined to assist Mr Khouj in his efforts to find out what has become of Mr Mansouri's wealth.
12. Those efforts include efforts to examine transfers or alleged transfers of assets to a Mrs Shahzaman Kurdi ("Mrs Kurdi"), a niece of Mr Mansouri. These are said by ACP and ACM to have been agreed by Mr Mansouri at 73 Brook Street shortly before Mr Mansouri's death.

Mr Nabil Chartouni

13. For many years Mr Mansouri spent time with Mr Nabil Chartouni in connection with his (Mr Mansouri's) financial affairs.
14. Mr Nabil Chartouni used an office at 73 Brook Street. He founded ACM in 1980 and was a director of ACM from the start. Mr Cameron Chartouni was sure that Mr Nabil Chartouni advised or had discussions with Mr Mansouri "around" these investments while Mr Nabil Chartouni was a director of ACM.
15. Mr Nabil Chartouni resigned as a director when ACM took that name in 2002, and was replaced by a friend. Ms Lapwood, writing for ACM, was still referring to him as "the Chairman" in 2008. There are a number of examples of matters concerning Mr Mansouri's financial affairs being referred to Mr Nabil Chartouni by staff of ACM or ACP before taking further action.
16. Pensaloca SA, a Panamanian-registered company, is beneficially owned by Mr Nabil Chartouni or members of his family. It is agreed that Mr Nabil Chartouni has management control of it.

Private Equity Investments

17. The most material assets in issue include eleven private equity investments (Arlington 1, Arlington II, Catterton IV, Catterton VI, CEA, Equivest, Gordon Labs, HIG, HIG Ventures, Horus and Seaport II). The initial investment date for a number of these investments is before 2002, when Mr Nabil Chartouni was a director of ACM.
18. There is some evidence to suggest that as at 31 March 2010 US$21,775,231 of capital was drawn for these investments and US$8,481,608 of capital had been returned (together with distributions of profit).
19. All of these private equity investments save HIG were made in the name of Caygill Holdings SA ("Caygill"), Abilene Investments Limited ("Abilene") or Wycliffe Investments ("Wycliffe"). Each of these was a company associated with Mr Nabil Chartouni. They and other like companies were sometimes referred to as "Chartouni family companies".
20. Mr Mansouri and Mr Nabil Chartouni had agreed that Mr Mansouri would have a share in each investment. The level of that share was 50%, 37.5% or 33%, depending on the particular investment. Whilst not a private equity investment it appears Mr Mansouri also had a 50% share in a contract for differences known as First Horizon. As for the HIG private equity investment, Mr Mansouri held this 100%.
21. Mr Cameron Chartouni is Chief Executive (and a director) of ACP and an employee of ACM. He is also Mr Nabil Chartouni's son. When he was asked about these investments by Mr Andrew Sutcliffe QC (appearing with Mr George McPherson for Mr Khouj), there was the following exchange:

"Mr Sutcliffe QC: So, looking back at your witness statement, paragraph 29, where you say in the second sentence, "Neither I nor anyone else at ACP or ACM was ever involved in making these arrangements," that requires correct[ion], does it not, because one of ACM's directors, namely your father, was involved in advising Mr Mansouri about these investments.

Mr Cameron Chartouni: Technically, yes, you're right, although I really considered him to be not giving him that advice as a director of ACM but rather in his own capacity.

…

Mr Sutcliffe QC: How was Mr Mansouri's interest, whether it was 50 per cent for most of them or, as you say, a lesser interest for two of them, how was it held?

Mr Cameron Chartouni: I'm not sure how his – so the investments into those private equity funds were held in Chartouni trust company names.

Mr Sutcliffe QC: Within the Chartouni trust company how was Mr Mansouri's interest held?

Mr Cameron Chartouni: I am not exactly certain how it was held, I can't say."

22. At the conclusion of his evidence, Mr Cameron Chartouni was asked by Mr Sutcliffe QC whether the private equity investments identified on a schedule showing Mr Mansouri's investments as at 31 March 2010 were still held today by the entities that held them then. He answered, and the exchange continued as follows:

"Mr Cameron Chartouni: Yes, I believe they do.

Mr Sutcliffe QC: Who do they hold those investments for?

Mr Cameron Chartouni: Those are held for the Chartouni family trust companies.

Mr Sutcliffe QC: Anyone else?

Mr Cameron Chartouni: Well, as per that schedule then I assume there's some portion thereof that is held for Mr Mansouri."

23. Anyone hearing that evidence would wonder why, if that is what Mr Cameron Chartouni, Chief Executive and director of ACP and employee of ACM, considers to be the position, ACP and ACM have not been more forthcoming in providing information to Mr Khouj.

Investments in the Multi-Strategy Fund or the Plus Fund (ASFL)

24. Investment in the Multi-Strategy Fund or the Plus Fund was, at least initially, by acquiring shares in Acropolis Select Funds Limited ("ASFL"), a Cayman Islands company of which Mr Nabil Chartouni is a director. Mr Mansouri acquired shares for US$3,700,000 in 2003 and 2006. The first purchase at least was facilitated by ACP acting by Ms Lapwood. From 2009 the investment was in the Multi-Strategy Fund rather than the Plus Fund.
25. The shares in ASFL (and thus the investment in the Multi-Strategy Fund) were redeemed and re-registered in the name of Mrs Kurdi in March 2011, after the death of Mr Mansouri. Their stated value at that date exceeded US$5.2 million.

Investment in the Park Lane Flat, and Tellico

26. There is no question that a flat in Park Lane ("the Park Lane Flat") was treated as Mr Mansouri's. However whether he enjoyed beneficial ownership of the flat itself or beneficial ownership of shares in a corporate owner of the flat is obscure.
27. The Park Lane Flat was registered in the name of Tellico Investments SA ("Tellico"). Shares in Tellico were originally held by a Kleinwort Benson nominee company, Borrowdale Nominees Ltd registered in Panama.
28. According to Mr Vaghadia, a director of ACP and ACM, the shares in Tellico were then registered in the name of Pensaloca in September 2010. The Park Lane Flat itself was sold, apparently after Mr Mansouri's death. In early 2011 the approximately £6,000,000 proceeds of sale were paid to Pensaloca.

Mrs Kurdi and April 2010

29. By April 2010 Mr Mansouri was seriously ill. The illness had developed very quickly.
30. Mr Mansouri was in London on 13 April 2010 in connection with medical treatment. Mr Khouj, and not ACP or ACM, disclosed copies of two letters dated that day, 13 April 2010. These are on a letterhead in Mr Mansouri's name and appear to bear his signature. One is addressed to Mr Nabil Chartouni ("c/o 73 Brook Street") and one is addressed to the Secretary of Tellico.
31. The first is in these terms:

"As discussed with you, I wish to transfer the ownership of [the Park Lane Flat] to my niece [Mrs Kurdi]. As you are aware, the apartment is owned through [Tellico].

Please arrange for the transfer of the shares of [Tellico] currently registered in the name of Kleinwort Benson's nominee company to [Pensaloca], to be held to the account of [Mrs Kurdi].

Please assist her in every way possible to manage [the Park Lane Flat] and to dispose of it if she so wishes."

32. The second is in these terms:

"Please arrange for the shares in [Tellico] beneficially held on my behalf through Borrowdale Nominees Limited to be transferred to and registered in the name of [Pensaloca]. Please forward the details of transfer to [ACM].

Please note that I have transferred the ownership of [Tellico] to my niece [Mrs Kurdi]."

33. Mr Vaghadia gave evidence of Mr Mansouri and Mrs Kurdi coming to "the offices of ACP/ACM" to meet Mr Nabil Chartouni on 13 April 2010, and that he was asked to join that meeting. According to Mr Vaghadia "Mr Mansouri said to me that he was giving [the Park Lane Flat], his investment in [the Multi-Strategy Fund] and his 'interest' in the private equity investments of the Chartouni family trust companies to Mrs Kurdi".
34. Mr Vaghadia says that he was shown "some signed letters from Mr Mansouri, addressed to Nabil Chartouni", and he recognises the first of the two letters above. He said that the second of the two letters "could have been with the letters addressed to Nabil Chartouni but I do not recall".
35. Mr Vaghadia continued:

"Being familiar with the requirements to transfer shares in ASFL, I mentioned that a share transfer form would have to be completed. Mr Mansouri asked me to fill in the form for him to sign. I filled in the relevant details for both Mr Mansouri and Mrs Kurdi and handed the form to Mr Mansouri, which he signed. The form was then given to Mrs Kurdi to sign and return directly to the Administrators of [the Multi-Strategy Fund], together with her identification documents. Mrs Kurdi said she would do so when she got back to Saudi Arabia."

36. A copy of a stock transfer form (transferor) in relation to 3096.2521 shares in the Multi-Strategy Fund appears to carry Mr Mansouri's signature and is dated 13 April 2010. A copy of a stock transfer form (transferee) is dated 1 June 2010 and appears to be signed by Mrs Kurdi.
37. The authenticity of the letters and stock transfer forms is challenged by Mr Khouj, as is the fact of a meeting on 13 April 2010 described by Mr Vaghadia. On the limited evidence at this trial, as between Mr Khouj and ACP and ACM, and for the purpose of the claims made at this trial, I accept the letters and the stock transfer forms as authentic, including their dates, and that there was a meeting. I do not however accept Mr Vaghadia's evidence that Mr Mansouri spoke to him at that meeting of giving "his 'interest' in the private equity investments of the Chartouni family trust companies to Mrs Kurdi".
38. Save where there was other confirmatory material I did not have confidence in Mr Vaghadia's reliability as a witness. His evidence was marked by an approach that showed no concern for or interest in Mr Mansouri on the one hand and determined loyalty to Mr Nabil Chartouni on the other. This informed his view of corporate and investment arrangements that on any objective view were of questionable coherence.
39. Mr Vaghadia's partisanship and the lengths to which he would go in that connection were shown by his readiness to make a false representation in an attempt to obtain information for Mr Nabil Chartouni and Mrs Kurdi's husband in connection with a private jet that Mr Mansouri had (directly or indirectly) owned. He admitted this under cross examination from Mr Sutcliffe QC and I consider the representation to have been deliberately false.
40. In the case of the Park Lane Flat there are the two copy letters. In the case of the Multi-Strategy Fund there are the copy stock transfer forms. There is not similar contemporaneous confirmatory material in relation to the private equity investments, and I do not trust Mr Vaghadia's formulation (quoted in paragraphs 33 to 35 above) of how he says Mr Mansouri described these.
41. I wish to emphasise that it is only for the purpose of the claims made at this trial and as between the parties to this litigation that I accept the letters and the stock transfer forms as authentic, including their dates, and that there was a meeting. At this trial I did not have the benefit of forensic expert evidence or of disclosure or evidence from Mr Nabil Chartouni or Mrs Kurdi. In light of these limitations my acceptance at this trial of authenticity and that there was a meeting is unlikely to carry weight in any different context and in any future proceedings involving parties other than or additional to Mr Khouj, ACP and ACM, and for my part I would not wish it to carry weight.
42. Mr Vaghadia also gave evidence in these terms:

"At a later date Nabil Chartouni explained to me that Mr Mansouri had gifted these assets to Mrs Kurdi because she and Mr Mansouri were very close and she and her husband had been helping him, both personally and in his businesses, particularly in his later years. I also understand, from Nabil Chartouni, that Mr Mansouri believed he had to gift assets to Mrs Kurdi before he died because he believed she would not inherit anything from him due to Saudi forced heirship rules."

43. I am not prepared to accept this evidence, of what Mr Nabil Chartouni said to Mr Vaghadia was the intention, purpose and belief of Mr Mansouri, as reliable evidence of what Mr Mansouri's intention, purpose and belief was. In addition to my assessment (above) of Mr Vaghadia as a witness, Mr Vaghadia's evidence tells me nothing of what Mr Mansouri in fact said on these aspects to Mr Nabil Chartouni. And Mr Nabil Chartouni is not at this trial to tell me himself.

Agency and fiduciary relationship: generally

44. In UBS AG (London Branch) and Others v Kommunale Wasserwerke Leipzig GmbH [2014] EWHC 3615 (Comm) Males J drew on two passages in speeches in decisions that had reached the House of Lords. Males J said:

"For the purposes of determining whether Value Partners was the agent of UBS and therefore of both parties, it does not matter whether the relationship between Value Partners and UBS was one which the parties regarded as an agency relationship. What matters is whether they had agreed to a relationship which, regardless of how they regarded it, amounted in law to an agency relationship. As Lord Pearson explained in Garmac Grain Co In v H.M.F. Faure & Fairclough Ltd [1968] AC 1130 at [594]-[595]:

"The relationship between principal and agent can only be established by the consent of the principal and the agent. They will be held to have consented if they have agreed to what amounts in law to such a relationship, even if they do not recognise it themselves and even if they have professed to disclaim it, … But the consent must have been given by each of them, either expressly or by implication from their words or conduct. Primarily one looks at what they said and did at the time of the alleged creation of the agency. Earlier words and conduct may afford evidence of a course of dealing in existence at that time and may be taken into account more generally as historical background. …"

In Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552 Lord Wilberforce cited this passage and continued at 587:

"The significant words, for the present purpose, are 'if they have agreed to what amounts in law to such a relationship…' These I understand as pointing to the fact that, while agency must ultimately derive from consent, the consent need not necessarily be to the relationship of principal and agent itself (indeed the existence of it may be denied) but may be to a state of fact upon which the law imposes the consequences which result from agency. It is consensual, not contractual. So interpreted, this formulation allows the establishment of an agency relationship in such cases as the present."

(In the latter case, Lord Wilberforce dissented (with Lord Reid) in the result, but that does not affect the contribution made to authority by the passage quoted).

45. Mr Cooper QC argues that it is central to the relationship of principal and agent that the agent can affect the legal relationship of his principal with third parties. This proposition is based on Article 1(1) of Bowstead and Reynolds on Agency (20^th edition), edited by Professor Watts and Professor Reynolds. However Article 1(4) additionally recognises the relationship of principal and agent where a person acts on behalf of a principal but has no authority to affect the principal's relations with third parties, provided that the relationship is a fiduciary one. The supporting text instances an introducing agent.
46. The agency described in Bowstead and Reynolds (above) at Article 1(1) is said to be a fiduciary relationship. A fiduciary relationship is also said to be "central" to the category of agency described in Article 1(4). On either basis therefore the search is for a relationship where trust, reliance and confidence is reposed by one person in another sufficient to cause the law to recognise that the latter owes a fiduciary duty or duties to the former; that the latter will act in the interests of the former rather than its own. It is not necessary that the latter is paid for the former's services: see Bowstead and Reynolds (above) at 6-035.
47. In F&C Alternative Investments Ltd v Barthelemy (No 2) [2012] Ch 613 at [225], Sales J (as he then was), offered a description of fiduciary duties that is, in my view, particularly suited to the present case. He described fiduciary duties as "obligations imposed by law as a reaction to particular circumstances of responsibility assumed by one person in respect of the conduct of the affairs of another." The description is cited in Snell's Equity (33^rd edition), edited by John McGhee QC, at 7-005.
48. If there is a fiduciary relationship then the duties owed in the circumstances of one relationship will not always be the same as those owed in the circumstances of another fiduciary relationship: see Henderson and Others v Merrett Syndicates Ltd and Others [1995] 2 AC 145 at 205 per Lord Browne-Wilkinson; Kelly v Cooper [1993] AC 205 at 214 again per Lord Browne-Wilkinson; and see further below.

Agency and fiduciary relationship: the investments

49. On 9 March 2006 Ms Lapwood wrote an email on behalf of ACM to Arbuthnot Latham as Pensaloca's bankers referring to a payment request for Euro 5,687,437.50 to be paid to Mr Mansouri once an identical sum had been transferred into Pensaloca's account. Explaining the transfers to Arbuthnot Latham, Ms Lapwood wrote "We have liquidated some investments and we are now transferring to him his portion."
50. Asked about this in cross examination there was the following exchange:

"Mr Sutcliffe QC: And what you are saying as I understand it is that ACM manages certain investments for the Chartouni family trust companies and Mr Mansouri, ACM has liquidated some of those investments and ACM is now transferring to Mr Mansouri his portion.

Ms Lapwood: ACM were doing, were providing the administration for Mr Mansouri's portion, to distribute his portion of this to Mr Mansouri.

Mr Sutcliffe QC: What I suggest is that the activities you describe, investment management, liquidation of payments, transferring to Mr Mansouri his portion, were all activities undertaken by ACM for Mr Mansouri, were they not?

Ms Lapwood: It was undertaken by me as an employee of ACM for the Chartouni family trust company, yes.

Mr Sutcliffe QC: For Mr Mansouri.

Ms Lapwood: What do you mean, for Mr Mansouri? I did this as Carol, an employee of [ACM] that was providing the administration for the Chartouni family trust company, [Caygill] to send these proceeds to Mr Mansouri.

Mr Sutcliffe QC: You had a joint role, did you not? You were acting for ACM on behalf of Chartouni family trust companies and Mr Mansouri.

Ms Lapwood: No, not and Mr Mansouri. This is me working for [ACM] looking after [Caygill's] side of the business."

51. I am quite sure it is unrealistic to see the email as a "one-off": in a later email from Ms Lapwood at ACM to a Ms Domeney at Arbuthnot Latham Ms Lapwood says she has just faxed through a payment request regarding Pensaloca and continues:

"The transfer IN is a distribution received on an investment we have with Mr Mansouri as a co-investor, the transfer OUT is to pass on most of the proceeds to Mr Mansouri."

52. When the exchange in evidence at trial is taken with the emails, I am satisfied that there is shown, on the balance of probabilities, the following: that ACM undertook or arranged dealings in investments of which Mr Mansouri owned part (at least beneficially), and that ACM authorised the handling of the money involved in those dealings in investments. Having heard that evidence, I do not accept Ms Lapwood's evidence that what ACM was "looking after" was only Caygill's "side of the business". Her answer was defensive. She gave no basis for the limitation in it.
53. Mr Cooper QC says that there is no instance of a request by Mr Mansouri that an investment be liquidated and of ACP or ACM acting on that request. I am not prepared to accept that a request from, or on behalf of, Mr Mansouri did not lie behind the liquidation of investments by ACM referred to by Ms Lapwood in her email of 9 March 2006. Evidence from Mr Mansouri is of course not available. The fact that a request is not recorded in documents of ACP and ACM disclosed in these proceedings is not the last word.
54. Mr Cameron Chartouni was shown copy requests in the period 1997-1999 from Mr Nabil Chartouni to Mr Mansouri for funds to be transferred to or to the credit of Arbuthnot Latham for onward transfer to Pensaloca, and to Arbuthnot Latham requesting transfer to Mr Mansouri by debit to an account of Pensaloca. All carry the 73 Brook Street address, one is signed by Ms Lapwood, and those headed in Pensaloca's name carry Ms Lapwood's email at ACM (in its former name).
55. In a further email to Arbuthnot Latham, dated 18 March 2004, Ms Lapwood wrote for ACM:

"I have just sent through payment for [Pensaloca] for value today, the payment is to be invested through [Caygill: this was blanked out in the disclosed copy] for Mr Mansouri who sent in the funds in the beginning of March.

To make up the $200,000 SG Hambros should have credited your account with $16,202.06 for [Pensaloca] value yesterday."

56. In evidence there was the following exchange over this:

"Mr Sutcliffe QC: … I just want to consider this email a moment. It is dated 18 March. You say Mr Mansouri sent in the funds in the beginning of March. Where would those funds have been sent? Not Pensaloca because you are saying that you sent them through a payment for Pensaloca today.

Ms Lapwood: I don't really understand this email, what I was talking about here, no, I'm sorry.

Mr Sutcliffe QC: Do not worry, it is 12 years ago but it looks like Mr Mansouri sent the funds somewhere else and you are now transferring them to Pensaloca.

Ms Lapwood: No, I couldn't tell you, I'm afraid, I don't remember.

Mr Sutcliffe QC: Would you have remembered that the company was Caygill if I had not told you, SG Hambros?

Ms Lapwood: I would not necessarily have known that, sir, no.

Mr Sutcliffe QC: You say the payment is to be invested for Mr Mansouri, do you see that?

Ms Lapwood: Yes, I see that.

Mr Sutcliffe QC: Would it be right that what you are saying in this email is that you acting on behalf of ACM are sending funds to Pensaloca which are to be invested for and on behalf of Mr Mansouri?

Ms Lapwood: I don't really understand this email at all, sir. I can't explain it, I'm sorry.

Mr Sutcliffe QC: It looks like you are providing a payment processing service for Mr Mansouri.

Ms Lapwood: I don't understand what I was talking about so I can't comment on that.

Mr Sutcliffe QC: In respect of an investment that was to be made for him in a Chartouni family trust company.

Ms Lapwood: Nothing in this email makes any sense to me so I can't explain what I was doing at that point to explain this email. I don't know."

57. In re-examination the email was looked at again:

"Mr Cooper QC: What I want to suggest to you is that your puzzlement about [the email] disappears if what has happened is simply that the word "request" has been missed out by mistake.

Ms Lapwood: I can't say that. I don't know what this is […]

Mr Cooper QC: No, but do you see the point that if you read in the word "request", "I've just sent through the payment request for Pensaloca," so the same form of –

Ms Lapwood: Right. I see what you mean. Okay. I'm with you now. Sorry. Yes. Yes, I guess that would make sense.

Mr Cooper QC: Does it now make sense to you?

Ms Lapwood: Yes. Okay. Because it probably – It would have been a payment request as opposed to – Yeah it may do. I'm not sure, sir. I don't know what I was talking about here."

58. Mr Sutcliffe QC submitted that not only was Ms Lapwood unable to explain the import of the email, she made no attempt to do so. I accept that submission. In my assessment, Ms Lapwood appreciated that the email was capable of supporting the view that ACM undertook or arranged dealings in investments of which Mr Mansouri owned (at least beneficially) part, and that ACM authorised the handling of the money involved in those dealings in investments. Her response was to try to avoid it by declining to engage with it.
59. I regret that I must record that there was evidence demonstrating that Ms Lapwood is prepared to mislead if it suits her purpose, and her purpose is often to do whatever she considers her employer wants. On 1 September 2010 she wrote to BNY Mellon because she wanted something from them. She said that she had received a message "this morning" from Mr Mansouri "saying that he wants to transfer his shares". She had not received any such message; Mr Mansouri had been dead for more than two months by this point.
60. In 2008 ACP sent a letter to Mr Mansouri describing him as a client and attributing the categorisation "eligible professional client" to him.
61. ACM produced investment reports in relation to Mr Mansouri's private equity investments, and also his investment in the Multi-Strategy Fund. These were prepared from investor information in relation to the investments made by Caygill, Abilene and Wycliffe. The last was sent by Ms Stephanie Tian of ACM to Ms Lapwood, Mr Purohit and Mr Issadeen under the subject line "Mr Mansouri's Quarterly Investment Report" on 28 April 2010. The investor information was held electronically by ACM. Mr Jayesh Purohit, financial controller of ACP and ACM, would undertake the calculations that were included for the Multi-Strategy Fund, although he said in evidence he was not aware of the purpose to which his calculations would be put.
62. The reports would be forwarded for comment from Mr Vaghadia and Mr Cameron Chartouni, and occasionally Mr Nabil Chartouni, and then finalised and sent by Ms Lapwood to Mr Mansouri or shown by Mr Nabil Chartouni to Mr Mansouri. I unhesitatingly reject as false Mr Vaghadia's evidence that these reports were not produced for Mr Mansouri but were instead produced for Mr Nabil Chartouni "for him to have the right numbers to discuss with Mr Mansouri". Ms Lapwood also kept Mr Mansouri updated by fax about capital calls and distributions. Mr Cameron Chartouni accepted that he would update Mr Mansouri on the performance of investments, both the Multi-Strategy Fund (or the Plus Fund) and private equity investments, at meetings attended by Mr Mansouri and Mr Nabil Chartouni.
63. The investments in the Multi-Strategy Fund or the Plus Fund (ie in the shares in ASFL) were reported to Mr Mansouri in broadly the same way as the private equity investments.
64. It was open to ACP and ACM to provide a clear account, if not from itself then by calling Mr Nabil Chartouni, or a witness from Pensaloca, of how requests were made by or on behalf of Mr Mansouri to make or liquidate investments, and to whom, and how they were acted upon. They have not done so. That is their entitlement but the consequence is that I must work with the evidence I have, and that includes the glimpses above. It is not as though Mr Nabil Chartouni in particular has stayed apart from these proceedings; he provided material to ACP and ACM in the course of the trial when it suited him or them: his diary is an example.
65. In an attempt to distance themselves from Mr Mansouri, ACP and ACM sought to rely on the absence of a retainer letter with Mr Mansouri, and the absence of a written contract with Mr Mansouri or a file kept by them in his name. In the context of this case, and of the way in which ACP and ACM operated, I do not feel able to treat any absence of these things as supporting ACP's or ACM's case. Rather, if they were absent they should not have been, and it is primarily ACP's and ACM's responsibility that they were absent. What were present were separate internal spreadsheets prepared by ACP and ACM dividing investments between Mr Mansouri's 50% and the 50% of the relevant Chartouni family trust company.
66. The demarcation of activity and responsibility between ACP and ACM was left unclear by them. They did not conduct themselves separately. They used the same individuals interchangeably. Whatever may have been their intention, there was no coherent divide in practice. I find both companies were equally part of the relationship with Mr Mansouri.
67. I accept without reservation Mr Khouj's argument that the proposition that the dealings of ACP and ACM involving Mr Mansouri were performed on behalf of Chartouni family trust companies, on the basis that instructions from Mr Nabil Chartouni to ACP and ACM were given by him on behalf of the Chartouni family trust companies, is artificial. When giving instructions to ACP and ACM Mr Nabil Chartouni was acting for ACP and ACM or on behalf of Mr Mansouri (either alone or jointly with the Chartouni family trust company).
68. There are some additional points to be made that are particular to the Park Lane Flat and Tellico. In the circumstances of the present case I am clear that the Park Lane Flat (and the ownership of Tellico) was an investment and not just a residence or an arrangement to provide residence.
69. I am satisfied that there is shown, on the balance of probabilities, that ACP and ACM undertook or arranged dealings in that investment for Mr Mansouri. Ms Lapwood accepted that she may have drafted a letter dated 15 July 2009 signed by Mr Mansouri and addressed to Kleinwort Benson (Guernsey) Trustees Limited. The letter reads:

"Tellico Investments S.A.

I write to inform you that I have decided to transfer the management of [Tellico] and my apartment in London [ie the Park Lane Flat] from yourselves to [ACM] whose details are as follows:

[ACM]

73 Brook Street

London

W1K 4HX

[Telephone]

Attention: Ms Carol Lapwood

Carol Lapwood will be in contact with you shortly in order to organise the orderly transfer of the company's records.

Please contact me if you have any queries."

70. ACP and ACM, through Ms Lapwood, changed the directors of Tellico to the Panamanian directors of Pensaloca, settled bills in relation to the Park Lane Flat and arranged for a power of attorney to be set up. The latter gave the attorneys power to sell the Park Lane Flat. The attorneys appointed by the power of attorney included Mr Cameron Chartouni but he claimed no recollection of it and that he "did not even know of Tellico". The other attorneys are Mr Nabil Chartouni, Mr Vaghadia and Ms Lapwood.
71. In the result I accept Mr Khouj's case:

a. that ACP and ACM undertook and managed private equity investments and an investment in the Multi-Strategy Fund or the Plus Fund and an investment in the Park Lane Flat or Tellico on behalf of Mr Mansouri;

b. that ACP and ACM used a bank account or accounts held by Pensaloca to make payments for and on behalf of Mr Mansouri, principally concerning the payment of capital calls and the receipt of proceeds or distributions in relation to the private equity investments;

c. that the circumstances gave rise to the requisite relationship of trust and confidence on which a fiduciary relationship is founded;

d. that ACP and ACM were the agents of Mr Mansouri in relation to the management of the assets forming the investments I have described in this judgment.

72. These conclusions do not exclude the possibility that others also had responsibilities as agents or fiduciaries or advisers to Mr Mansouri.

Other activity

73. From time to time quotations for private charter were obtained, purchases of foreign currency were made and renewal of car insurance was undertaken for Mr Mansouri. The evidence left me with the view that these were occasional incidental favours carried out for him, and completed. I do not think they establish an agency or fiduciary relationship in themselves, or at least one that lasted for longer than (say) the completed purchase or currency or insurance. I do not think that they assist one way or the other in relation to the conclusions that I have reached on investments.

The fiduciary duty or duties arising

74. In F&C Alternative Investments Ltd v Barthelemy (No 2) (above) at [222]-[223], Sales J (as he then was) summarised matters in this way:

"In some contexts, for instance in the paradigm cases described by Lord Browne-Wilkinson, the content of the fiduciary obligations which arise will be reasonably standard and well known, having been worked out in the cases over decades if not centuries.

… However, there has always been scope for fiduciary duties to be found to arise in a range of other contexts which have important similarities to the paradigm cases, but also significant differences. In those contexts, it is necessary to examine with some care what is the precise content of the particular fiduciary obligations arising in the specific circumstances of the individual case.

Fiduciary obligations may arise in a wide range of business relationships, where a substantial degree of control over the property or affairs or one person is given to another person. Very often, of course, a contract may lie at the heart of such a business relationship, and then a question arises about the way in which fiduciary obligations may be imposed alongside the obligations spelled out in the contract. In making their contract, the parties will have bargained for a distribution of risk and for the main standards of conduct to be applied between them. In commercial contexts, care has to be taken in identifying any fiduciary obligations which may arise that the court does not distort the bargain made by the parties … The touchstone is to ask what obligations of a fiduciary character may reasonably be expected to apply in the particular context, where the contract between the parties will usually provide the major part of the contextual framework in which the question arises."

The context will of course extend to the nature of the commercial transaction and not simply its terms: Neste Oy v Lloyds Bank plc (The "Tiiskeri") [1983] 2 Lloyd's 658 at 663 2^nd col. and 665 1^st col. per Bingham J (as he then was).

75. All this said, "as a general rule, it is a legal incident of [the relationship of principal and agent] that a principal is entitled to require production by the agent of documents relating to the affairs of the principal": Fairstar Heavy Transport NV v Adkins & Anor [2013] EWCA Civ 886; CLC 272 at [53] per Mummery LJ, with whom Patten and Black LJJ agreed; and see as regards the operation of the duty Equitas Ltd and anr v Horace Holman & Company Ltd [2007] EWHC 903 (Comm) at [26] – [28] per Andrew Smith J.
76. The present case offers no difficulty. It is plain that the law should and does recognise a duty on the part of ACP and ACM to account and provide records to Mr Mansouri in relation to assets of his where their position as agent or fiduciary extended to those assets. That is the duty that is relevant to the relief sought in the present case. There is no written engagement letter or contract in the present case that attempts to affect the position. The nature of the commercial transaction only reinforces it.
77. I will discuss remedies further with Counsel after this judgment is handed down but I am generally satisfied that ACP and ACM owed the duties contended by Mr Khouj: (a) a duty to account to Mr Mansouri in relation to transactions and other business conducted on his behalf (or jointly with another); (b) a duty to keep and maintain proper records of any transaction or other business conducted on his behalf (or jointly with another); (c) a duty upon request to provide Mr Mansouri with originals or copies of and records of transactions and other business conducted on his behalf (or jointly with another).

The duration of the relationship or the duties

78. On 9 November 2010 Mr Vaghadia, for ACM, wrote to Mr Khouj. He copied his letter to Mr Nabil Chartouni and others. Under the subject heading "Re: Mr Abdulrahman Mansouri" he said this:

"I have now discussed this matter with Mr Nabil Chartouni. He has advised that the investments made jointly with him by the late [Mr Mansouri] were gifted to [Mrs Kurdi] during his lifetime. As I have already mentioned to you, the ownership of the apartment in London that is managed by our company was also gifted to Mrs Kurdi during Mr Mansouri's lifetime.

As a result of the above mentioned, both Mr Chartouni and ourselves have a fiduciary responsibility only to Mrs Kurdi. Therefore we cannot discuss her financial affairs with you or Mr Mansouri's heirs as these assets are not part of Mr Mansouri's estate."

79. The recognition of fiduciary responsibility to the beneficiary is notable. If such a responsibility is recognised to Mrs Kurdi from 13 April 2010, then such a responsibility should logically be recognised to Mr Mansouri until 13 April 2010.
80. The period that is the subject of Mr Khouj's claim is 2002 to 5 June 2010. I am satisfied that the claim is good over that period. Importantly the relationship of agent or fiduciary did not, in my judgment, end on 13 April 2010. There is no evidence that anything was said or done at that date to end the relationship. The meeting did not, and nor did the letters dated 13 April 2010 or the share transfer forms. ACP and ACM were, on their own case, still acting on his instructions in taking steps to effect transfers to Mrs Kurdi.
81. In any event, generally speaking, the entitlement to require production by the agent of documents relating to the affairs of the principal survives termination of the agency: see Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marine Insurance Underwriting Agency Ltd and Another [1995] QB 174 at 185H-186B per Colman J).

Concluding observations

82. I would like to make five concluding observations.
83. First, regardless of whether ACP and ACM are obliged to disclose information to Mr Khouj, Mr Nabil Chartouni may be obliged to disclose information to him. So too may Mrs Kurdi.
84. Second, I express the hope that the game of "cat and mouse" of the last several years over information provision will not continue into the years ahead. The cost and delay must already be considerable. There may have been things to criticise in relation to Mr Khouj's approach too, including in proceedings in Saudi Arabia (where it was wrongly asserted that Mr Nabil Chartouni resided in Saudi Arabia), and in disclosure in these proceedings. However all that is less material to the fundamental subject that does need to be resolved, which is a precise accounting for assets that Mr Mansouri once had. I do not think it wrong to add that this is a matter also of respect for Mr Mansouri now he is dead. I am quite sure he would be deeply saddened by the current situation.
85. Third, the case illustrates the vulnerability of arrangements when an individual uses a mix of companies, structures, and undocumented arrangements to hold his or her wealth and "through" which to make investments. On the individual's death there is the risk, as here, that the facts are not known save by those who are not prepared to disclose them (and who may themselves not be known) or by those who rest with their own view of things and whose interest moves on to other things.
86. Fourth, at earlier stages in this case ACP and ACM sought summary judgment against Mr Khouj. They were unsuccessful, and it is just as well that they were. HHJ Mackie QC, sitting as a Judge of the Commercial Court, stated that "lack of completeness, clarity and perhaps candour in what has been provided by the defendants alone suggest to me that there must be a trial". His view was supported by the Court of Appeal. The trial has shown him to be right.
87. The final observation arises from the fact that there were late wholesale changes of legal representation on both sides in this case. I have watched with admiration the way in which the new legal teams picked up the challenge so as to conduct the trial fully and thoroughly. Their task was difficult because this was a case in which there were many facts to be explored, and things were rarely clear. As one consequence, at one point Mr Sutcliffe QC made a serious allegation that was not well founded; he immediately took responsibility and unhesitatingly withdrew it with complete professionalism. I pay tribute to him and to Mr Cooper QC and to their teams.