CA-2024-001254 - [2025] EWCA Civ 961

As set out above, Mr Giwa’s deceit claim relied on Mr Mervyn having made two false representations, the Use Representation and the Payment Representation (see paragraph 18 above). By Ground 1 of the appeal JNFX contends that the Judge erred in holding that JNFX had no realistic prospect of showing that the Use Representation was not made. It is to be noted that no challenge is made in respect of his conclusion that the Payment Representation was made, and hence, as accepted by Ms Addy, success on Ground 1 would not be sufficient by itself to succeed in the appeal. Mr Bradley was for that reason inclined to dismiss this Ground as academic but I think it should be considered on its merits.

The Judge dealt with the making of the two representations together at [12] to [16] of his judgment. At [12] he summarised Mr Giwa’s case on the two representations as set out in his pleading. At [13] he gave an overview of JNFX’s defence, noting that it advanced no affirmative case on the question of Mr Mervyn’s deceit and that the thrust of its case was that even if Mr Mervyn’s liability in deceit was established, there was no realistic prospect of fixing JNFX with liability for his conduct. At [14]-[15] he considered and rejected a submission that the representations, being statements of intention, were not capable of founding a claim in deceit. That is not challenged on appeal – unsurprisingly, as it is well established that if a person says that they intend to do something and at the time have no such intention, that is deceitful: the state of a person’s mind is famously as much a fact as the state of their digestion, and to lie about your intentions is just as capable of founding an action in deceit as any other lie.

At [16] the Judge says:

“There is no evidence in the present case to suggest that Mr Mervyn did not, at the time he made the Representations, have the intention alleged and no real prospect of any such evidence being obtained.”

That is rather odd, and I cannot help thinking that something has gone wrong with the sentence as the Judge is not here dealing with the falsity of the representations but whether they were made, and in any event the whole of Mr Giwa’s case depends on Mr Mervyn not having had the intention alleged. It may be that what the Judge meant is that there was no evidence that Mr Mervyn did not claim to have the intention alleged. Be that as it may, the Judge continues (after noting that even if Mr Mervyn participated in the proceedings, which was itself unrealistic, he would be hard pressed to dispute Mr Giwa’s case):

“JNFX asserts that with the benefit of further disclosure and cross-examination of Mr Giwa, there has to be a realistic prospect of showing that the Representations were not made, but I am not persuaded that there is any substance in that assertion, in relation both to what further disclosure and what cross-examination suggested by JNFX might realistically lead to that conclusion.”

That concludes his consideration of the question whether the representations were made, and he then went on to consider the question of the falsity of the representations.

I think it is fair to say that this analysis does not really explain why he concluded that the Use Representation was made, and it is necessary to consider what the relevant evidence before him was.

I start with whether there was any evidence of an express representation in writing that the Naira sums transferred by Mr Giwa would only be used to acquire dollars in performance of the contracts. There was scant evidence of this. Mr Bradley referred us to one e-mail in 2017 at the outset of Mr Giwa’s dealings with Mr Mervyn (for another client, not for MultiChoice) in which Mr Mervyn asked Mr Giwa to confirm “the following trades with [CMR]”. The trades were set out in a table showing CMR as buying $1.2m and selling NGN 441,600m. It is perhaps arguable that that amounted to an express representation that the Naira would be used by Mr Mervyn to acquire the dollars, although I do not regard that as at all obvious; in any event it is not suggested that any similar e-mails exist for the MultiChoice contracts. Mr Bradley also pointed to an e-mail right at the end of the relationship on 16 September 2021 in which Mr Mervyn said (in relation to contract 10):

“With regards to the updated settlement date for the Multichoice 10,000,000.00 USD settlement, this payment will be paid out with MT103 on or before Thursday 30th Sept 2021. This date reasonably factors in time to trade the funds…

This is a forward payment against past funds received today 16^th Sept 2021”

That I accept is rather better evidence of an express representation that the Naira received that day would be traded to produce the $10m to be paid on 30 September 2021. But by itself it does not establish that similar representations were made for contracts 1 to 9; and we were not shown anything similar for those contracts.

In the absence of any express written representations, Mr Giwa’s case must depend either on oral representations, or representations made impliedly or by conduct. Taking next the question of implied representations, Ms Addy said that there was nothing necessarily implicit in the contracts which required the very Naira transferred to be used to acquire the dollars promised in return. If all that is agreed between A and B is that A will transfer a certain amount of Naira to B, and B will transfer a certain amount of dollars to A, that does not require B to use the Naira to acquire the dollars: the contract can be fulfilled by B using dollars that he happens to have available to him, or by using dollars that he acquires using other funds. Ms Addy referred to such a transaction as a transaction on a contractual debt basis rather than a proprietary basis.

As a matter of principle I think there is quite a lot to be said for this submission. Take for example contract 3. Mr Giwa’s evidence on the making of this contract (given in his first affidavit, sworn in support of the application for the freezing injunction, but also relied on before the Judge) is as follows:

“In around 14 October 2020, MultiChoice placed its third order for US$5,000,000 with me, transferring NGN 2,375,000,000 to [CMP]. On 15 October 2020, Mr Mervyn and I agreed I would transfer NGN 2,320,000,000 for the delivery of US$5,000,000 by 30 October 2020. I believe the rate for this order was NGN 464. On the same day, [CMP] transferred the agreed sum to the ChamsSwitch [First Capital Monument Bank] Account.”

That is effectively all that he says about the terms of this contract (although he elsewhere explains that the arrangement was that the dollars to be paid in return for the Naira would be credited to MultiChoice Africa’s account in London). A simple agreement that Mr Giwa would arrange for NGN 2,320m to be transferred to ChamsSwitch’s account in return for the delivery of $5m to MultiChoice Africa’s account is not on the face of it what Ms Addy calls a proprietary contract. It does not expressly oblige Mr Mervyn to use the Naira to acquire the $5m; and I think it is doubtful that it imposes any implicit obligation to do so. So long as he duly procured payment of the requisite amount of dollars, one would have thought it irrelevant how he did so. If that is right, it must also be doubtful whether entering into such a contract involves any implied representation by Mr Mervyn that he intended to use the Naira only for this purpose. I readily accept, given the sums involved, that it is perhaps unlikely that Mr Mervyn would have $5m lying around and in practice Mr Giwa no doubt assumed that Mr Mervyn would only be able to fulfil the contract by trading the Naira. But that seems to me a different point. To say that Mr Giwa assumed (and reasonably assumed) that Mr Mervyn would use the Naira to acquire the dollars to fulfil the contract is not the same as saying that Mr Mervyn impliedly represented that he intended to do so.

So I think there is at least room for argument whether there was any implied representation. Much the same goes for representation by conduct, as no particular conduct by Mr Mervyn is identified other than his conduct in holding himself out as willing and able to contract on the terms that he did.

That leaves oral representations. Mr Giwa’s evidence does assert oral representations, as follows:

“Mr Mervyn always represented to me that, for each company to which funds were sent and in each case, such Naira sums would be used only for the purposes of being converted by JNFX into U.S. dollars and deposited by JNFX once converted into the relevant nominated account for MultiChoice Africa. Without this assurance, which was given to me by phone and was the basis of all trades with Mr Mervyn even prior to the MultiChoice transactions, I would never have transferred any Naira sums to JNFX or any other entity nominated by Mr Mervyn.”

So the question becomes whether JNFX would have any real prospect of challenging or undermining that evidence if there were a trial. JNFX is unlikely to be able to call any evidence of its own on this question, and there is no reasonable likelihood that Mr Mervyn would be available to give evidence at trial. And it is perhaps doubtful if further disclosure would add anything relevant. But JNFX would be able to cross-examine Mr Giwa on this statement. And here I think that it is not fanciful to suppose that they might get somewhere. Without rehearsing all the points that might be made in cross-examination, Mr Giwa’s own evidence is that deals in the parallel market were made very informally by “phone, text messages or e-mail”, and in this context his statement as to the assurance given him by Mr Mervyn, which is very general and does not give details, might perhaps be open to challenge in cross-examination.

Moreover there is evidence, from Mr Giwa himself, which suggests that the transactions between him and Mr Mervyn were far more complex than a straightforward swap of Naira for dollars with the particular Naira transferred always being used to acquire the dollars in question. He explains in his affidavit that the exercise of reconciling all payments between MultiChoice and JNFX had been extremely difficult, intricate and time consuming; it took him four months with the assistance of his solicitors to produce a reconciliation, and even this was incomplete as he was unable to trace the origin of certain dollar payments. The results are collected in a “Reconciliation Narrative” annexed to his affidavit. He there explains that he was processing transactions with Mr Mervyn not just on behalf of MultiChoice but also of other clients, and that he had approximately 15 such other clients during 2021. Moreover it appears that the dealings between Mr Giwa and Mr Mervyn did not keep the affairs of each of his clients rigorously separate. Thus he says that he and Mr Mervyn “employed the deliberate strategy of attempting to overfund MultiChoice when possible”; and he refers several times to what he calls a process of “netting off”. He variously describes this as: “netting off of the entitlements/obligations between me and the FX dealer at that point in time across all our transactions”; “netting off between me and JNFX to account for debts accumulated on transactions for different clients”; “the continuous process of netting off between us”; and “the netting off process I described … i.e. by JNFX making commensurate payments to my other clients in lieu of the funds owed to me for overpaying MultiChoice.”

I do not find these accounts of the netting off process as clear as they might be, but they do suggest that Mr Giwa and Mr Mervyn acted on the basis of some sort of global account across different clients such that Mr Giwa did not always consider it necessary to transfer the precise amount of Naira to Mr Mervyn specified in any particular contract. Thus for example Mr Giwa’s evidence in relation to contract 9 is that he agreed with Mr Mervyn that he would transfer NGN 4,274m in the expectation of receiving $10m, and that he believed the rate agreed was likely to have been NGN 482 = $1. At that rate, as he explains, NGN 4,274m would only equate to $8,867,219; but Mr Mervyn agreed that JNFX would deliver $10m. Mr Giwa’s explanation is that “this had been due in part to the outstanding sums owed to MultiChoice that had begun to build, but also due to the netting off process”. Mr Giwa’s evidence is that in the event JNFX delivered $9m on 29 June 2021. By that date the full amount of NGN 4,274m had not been transferred but only NGN 3,374m (the equivalent, at a rate of NGN 482 = $1, of some $6.9m). The balance of NGN 900m was not transferred until 1 July 2021. On these facts it would seem that Mr Giwa was not expecting the full $10m to be wholly funded by the Naira he had agreed to transfer, nor was the $9m in fact received all derived from the Naira he had transferred.

All of that might be thought to cast doubt on Mr Giwa’s statement that throughout the relationship he only dealt with Mr Mervyn because of the latter’s assurance that the Naira he transferred would be used only to procure the dollars required. I think the position is not as clear as the Judge thought. In those circumstances I accept Ms Addy’s submission that the fuller investigation of these matters that would be possible at trial, and the cross-examination of Mr Giwa on them, might add to or alter the evidence available to the trial judge on this issue.

I would therefore accept that the Judge should not have found that JNFX had no real prospect of success on this issue, and that this Ground is well founded. As already explained, however, this is not by itself enough to mean that the appeal should be allowed.