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

Ground 2 is that the Judge erred in holding that JNFX had no realistic prospect of showing that the Use and/or Payment Representations (if made) were not false, alternatively were not false in relation to contracts 1 to 9.

In the light of my conclusions on Ground 1, I propose to concentrate on the Payment Representation. It is not disputed that it was made, and the question is whether it was false. I have set out the terms in which the Payment Representation is pleaded at paragraph 18(2) above and repeat that here for convenience, namely that Mr Mervyn represented that he intended to procure the payment by JNFX to the MultiChoice Africa account of all dollars due under the contracts.

I propose to consider contract 10 first as this stands rather apart from the other contracts (as recognised by the alternative ways in which Ground 2 is framed). In the case of the other contracts, there were some overpayments and rather more underpayments, but there was in each case at least substantial performance; in the case of contract 10 however no payment was made at all.

I will start by setting out the evidence relevant to contract 10 before the Judge. Mr Giwa says that on or around 7 September 2021 MultiChoice placed an order for $10m, transferring NGN 5,330m to GIP’s account. On 8 September Mr Giwa agreed with Mr Mervyn that he would transfer NGN 4,822m to Frontier’s account, and procured GIP to make an initial transfer of NGN 200m.

There were a series of e-mails between the parties on 8 September. These are also relevant to Ground 4 (the ostensible authority issue) so it is convenient to set them out here, as follows:

The evidence for Mr Giwa is that following the initial transfer of NGN 200m on 8 September 2021, GIP transferred NGN 3,500m to Frontier on 16 September, and a further NGN 1,221m on 22 September, making a total of NGN 4,921m.

Despite this, and despite Mr Mervyn’s e-mail of 16 September promising Mr Giwa that the $10m would be paid out on 30 September (set out at paragraph 38 above), no moneys were paid by then or at all.

On these facts (none of which were, or realistically were likely to be able to be, disputed) the question is whether the Payment Representation was false. As Ms Addy pointed out, a claim in deceit requires the representation to be false at the latest when acted upon. Here the transfers by GIP to Frontier took place over a period from 8 to 22 September 2021, so the full claim depends on whether the representation was false on 8 September. To put it another way, did Mr Mervyn on that date have a bona fide intention that the $10m would be paid? Or, to be more precise, has Mr Giwa shown that JNFX has no realistic prospect of disputing that he did not have that intention?

There is of course no direct evidence of Mr Mervyn’s intention. Nor is there likely to be at trial as it is not suggested that there is any realistic prospect of his giving evidence. Mr Giwa’s case therefore depends on inference. But if Mr Mervyn promises to pay Mr Giwa $10m, and despite receiving the necessary Naira to enable him to do it, completely fails to do so, it does not seem very difficult to infer that he had no intention of doing so. If he did intend to pay, why did he not do so?

Ms Addy concentrated her submissions on the inferences to be drawn in relation to the first 9 contracts, where although there were shortfalls, attempts were made to fulfil the contracts and substantial payments were in each case made. I will come back to the position in relation to those contracts below. But in relation to contract 10, her submission was that the Judge should not have rejected, as he did, the possibility that Mr Mervyn’s intentions were honest when the transaction was agreed, but that he subsequently got into difficulties related to the depreciation of the Naira. What the Judge said (in his judgment at [18]) was that he was unable to accept that this alternative explanation was the more plausible one, “or that it is an explanation which has any real prospect of being upheld at trial.”

I think this was a conclusion that he was justified in coming to. It is not as if there was a long period between the date when the representation was made and the dollars were due to be paid. Nor does it make sense to suggest that the reason that the dollars were not paid was due to some depreciation of the Naira. This might explain a shortfall, but not a complete failure to pay anything; in any event there was, and is, no evidence of a collapse or marked depreciation of the Naira (or of some cryptocurrency such as used by Mr Mervyn for his trading) in the relevant period.

Nor of course did Mr Mervyn ever proffer any such explanation (or any real explanation at all): on the contrary, he continued to promise payment in full. He sent Mr Giwa two International Wire Confirmations purporting to show payments from JNFX to MultiChoice Africa of $10,870,000 and $630,000 (ie totalling $11.5m) being in progress at 24 September, but Mr Giwa later ascertained that these were fake. On 6 October Mr Giwa e-mailed Mr Eisenberg complaining that these confirmations were fake. On 8 October he asked his lawyer to demand $14m (of which $11.5m was for MultiChoice) from JNFX, copying in Mr Mervyn; he explained in his evidence that the $11.5m was made up of the $10m for contract 10 and $1.5m towards earlier shortfalls, and was what Mr Mervyn had assured him could be delivered straightaway. On 13 October Mr Mervyn e-mailed him (copying in both Mr Green and Mr Eisenberg) as follows:

“On the mentioned payment, I was unable to meet up with this payment as agreed yesterday due to some funding issues.

I have discussed this internally and we will meet this payment of 11,500,00.00 USD on or before this coming Monday.

We also have a call at 10.30am or whenever it is convenient to go over this and put this on record, as well as put this commitment in a formal legal letter.

Once again, I apologise for these delays and misleading timescales and will ensure that this payment is met.”

(“This coming Monday” was 18 October.) This was followed on 19 October by an e-mail from Mr Green to Mr Giwa saying that “we are expecting funds in today”.

It seems clear from this that Mr Mervyn was still telling Mr Green and Mr Eisenberg that although there had been delays the payment would be made. The fake confirmations and repeated broken promises have all the hallmarks of a debtor who cannot pay, and was never in a position to do so, rather than someone who genuinely thought he would be able to pay but subsequently ran into unforeseen difficulties. Mr Bradley submitted that in the absence of any evidence of a market collapse, the inference that Mr Mervyn was dishonest when he represented that he intended the dollars to be paid was realistically not possible to rebut; the fact that nothing at all was paid strongly suggests that Mr Mervyn had overcommitted himself and was never intending to pay. I think this submission is well founded.

Moreover Mr Bradley pointed to other matters supporting this inference. First, there was evidence that at the same time as MultiChoice’s monies disappeared, other clients’ monies went missing too. It is admitted in JNFX’s Defence that in a video meeting in January 2022 between Mr Giwa, Mr Eisenberg and Mr Green (among others) JNFX explained that their understanding was that other companies had been caught in the same situation as MultiChoice Nigeria and had monies which had yet to be returned to them as a result of Mr Mervyn’s actions. There was evidence that another client of Mr Giwa’s called Delphinus was owed $2.5m in September 2021; and that a company called Greenov8 Global Platforms Ltd was owed $1m for Naira which it had transferred at the end of August 2021.

Second, there is the evidence that I have already referred to that Mr Mervyn sent Mr Giwa fake confirmations of transfers. As Mr Bradley submitted, if you are sending fake (and dishonest) confirmations of payment, it is a pretty sound inference that your conduct at the time is generally dishonest.

Third, Mr Bradley relied on the fact that JNFX itself had reached the conclusion that Mr Mervyn was dishonest. In the proceedings on the winding up petition that Mr Giwa presented against JNFX, JNFX’s position was that it had become embroiled in a fraud perpetrated by Mr Mervyn (as admitted in JNFX’s defence in this action).

Fourth, in a WhatsApp exchange between Mr Giwa and Mr Mervyn, Mr Mervyn admitted telling lies. This was on 2 October 2021 when Mr Mervyn wrote “I’ve just messed everything up with these lies”. It seems probable from the context that he is referring to the fake confirmations and promises that the funds were in, but it is not necessary to consider this in detail as on any view he is admitting to telling lies, and that is clear evidence of his dishonesty very shortly after entering into the transactions.

In those circumstances I agree that the Judge was justified in concluding that the evidence of Mr Mervyn’s dishonesty in relation to contract 10 was overwhelming. JNFX was not in a position to advance any positive case to the contrary, and the suggestion that Mr Mervyn might have honestly intended the contract to be fulfilled and run into unexpected difficulties does seem to me to be fanciful.

In this connection Ms Addy applied to adduce further evidence. This was opposed by Mr Bradley on the basis that the normal criteria for the admission of fresh evidence on appeal, even adopting the less exacting requirements on an appeal from an application for summary judgment (see Price v Flitcraft Ltd [2020] EWCA Civ 850 at [44]-[47] per Floyd LJ), were not met. We looked at the evidence on a provisional basis.

What it shows is that Mr Giwa agreed a transaction with Mr Mervyn for another client of his, Technocrat XP Ltd (“Technocrat”), shortly before contract 10, and this was duly fulfilled. The evidence is that the agreement was made some time prior to 23 August 2021 and was for the payment of Naira in return for $2.4m to be paid to Technocrat. After some delays $2.37m was credited to Technocrat’s account on 21 September 2021.

JNFX’s case is that this significantly undermines Mr Giwa’s case on the question whether Mr Mervyn was dishonest in relation to MultiChoice contract 10. But I do not think this is so. The fact that Mr Mervyn was able to procure payment of $2.37m to Technocrat on 21 September does not seem to me to show that he was also able to procure payment to MultiChoice – indeed the very fact that he did (nearly) fulfil the Technocrat contract but nothing was paid in respect of contract 10 for MultiChoice suggests that he was in no position to do both, as otherwise one would expect him to have done so. And if he could not fulfil both, it is not difficult to infer that he must have known that he was unable to do so; and to have gone ahead with MultiChoice contract 10 when he knew he could not fulfil it seems to me a clear case of a false and dishonest representation that he intended payment to be made. This is quite apart from the fact that the payment to Technocrat took place after Mr Giwa had sent him NGN 3,500m (the equivalent of over $7m) for MultiChoice contract 10 on 16 September, so it is entirely possible that it was only because of the payment under the MultiChoice contract that he was able to fulfil the Technocrat contract. There was also clear evidence that Mr Giwa told Mr Mervyn on 16 September that he would only send the balance of the Naira for MultiChoice contract 10 (a further NGN 1,221m, the equivalent of some $2.5m) if the Technocrat payment was made. In effect therefore by procuring payment of $2.37m to Technocrat, Mr Mervyn secured the payment in of an equivalent amount. None of this suggests that he had, or honestly thought he had, the funds to fulfil contract 10 for MultiChoice.

Even if admitted therefore I do not consider that the fresh evidence would cast any real doubt on the inference of dishonesty that the Judge rightly drew from the other material which I have referred to. It is in those circumstances unnecessary to consider whether JNFX satisfied the requirement of reasonable diligence so as to justify the admission of fresh evidence on appeal.

I would therefore dismiss Ground 2 of the appeal so far as it affects contract 10.

So far as concerns contracts 1 to 9, the position is not necessarily the same. Standing back from the detail, the story is of Mr Mervyn promising over the course of about a year that the contracts would be fulfilled. At the outset they were, and there is no reason to think his intentions were anything other than honest, but by the end, for the reasons I have given, he cannot have honestly intended that contract 10 would be fulfilled. At some point in the year therefore what had started as honest trading became dishonest. It is self-evidently a question of some difficulty to pinpoint the precise point at which this happened – that is where Mr Mervyn crossed the line from promises that he had every intention of keeping to promises that he must have known he could not honestly make.

If one examines the individual contracts the position can be seen to be as follows (see the table set out at paragraph 13 above):

For contract 9, I do not think there is a claim in deceit, whatever the position in contract. This is because Mr Giwa’s own evidence is that the contract was placed on 1 June 2021 for the payment of $10m at a rate of NGN 482 = $1 (and so would equate to NGN 4,820m), but that he agreed with Mr Mervyn that he would only transfer NGN 4,274m, the equivalent at that rate of $8,867,219, due to previous shortfalls and the netting off process: see paragraph 45 above. That was what was transferred, with $9m being received in return. The shortfall in payment of $1m would, if the contract claim is otherwise good, no doubt entitle Mr Giwa to claim the $1m in contract. But it seems to me fallacious to assume that the same is true in tort. It is trite law that a claim in contract entitles the innocent party to be put in the same financial position as if the performance promised had been received; but a claim in tort only entitles the innocent party to be put in the same financial position as if the tort had not been committed. Here the claim in deceit takes as its premise that Mr Mervyn was deceitful when he promised payment of $10m (and thereby represented that he intended the full $10m to be paid), and Mr Giwa’s case is that in reliance on that representation, Naira worth some $8.8m was transferred, in return for which $9m was received. In other words, although the full $10m was not received, by relying on the representation MultiChoice still received more than it paid. I do not see how in those circumstances it could have any claim in tort as it would have been no better off – in fact slightly worse off – if the representation had not been made, the contract had not been entered into, and nothing had been paid.

So what this claim comes down to is that Mr Mervyn was deceitful in relation to contracts 7 and 8. Here I think Mr Giwa’s own evidence is very pertinent. He says that generally shortfalls in deliveries were not considered a particularly concerning problem because everyone appreciated the difficulties of sourcing dollars with Naira and there was an expectation that the shortfalls would be made up for with overpayments on subsequent orders; even when substantial underpayments began to appear with contract 7 and the gap was approaching the $5m mark with contract 8 “it was not perceived to be of particular concern by MultiChoice especially given the economic environment of the constantly devaluing Naira (where the same or worse losses can be caused by simply holding onto Naira).” And of course Mr Giwa went on to place contracts 9 and 10 which he would scarcely have done if he had already concluded that Mr Mervyn was dishonestly deceiving him.

His contemporary perception of the shortfalls on contracts 7 and 8 therefore appears to have been to assume that Mr Mervyn was honestly intending to fulfil the contracts. I think it difficult in those circumstances to conclude that the case that he was in fact already making dishonest representations is so clear-cut that summary judgment should be given; at trial JNFX will be able to explore with Mr Giwa the whole question why the scale of the shortfalls on these contracts did not concern him at the time, and his answers may well add to the available evidence on the inferences to be drawn.

The Judge does not in his analysis distinguish between the various contracts, but simply treats the falsity of the Payment Representation as a single issue. Nor did Mr Bradley address us at any length on the earlier contracts. What he said was that the size of the shortfalls on contracts 7 and 8 could not be explained by difficulties in trading or depreciation of the Naira, but they evidence the intention of Mr Mervyn to start chipping away at what he could take before he went out with a bang in September 2021. That may be right; but for the reasons I have given I do not think it should be determined to be right before JNFX has had an opportunity to cross-examine Mr Giwa on the question.

I would therefore allow the appeal on Ground 2 in relation to the contracts other than contract 10.