NEUTRAL CITATION
NO. [2004] EWHC 374 (Comm)
IN THE SUPREME COURT OF JUDICATURE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
MR JUSTICE GROSS
Wednesday 10th March 2004
BETWEEN:
-and-
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Derrick Dale (Clyde & Co) for the claimants
The defendants appeared in person
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INTRODUCTION
1. The Claimant ("Credit Suisse") is a bank incorporated under the laws of Monaco.
2. The First Defendant ("Mr. Attar") has been a customer of Credit Suisse since about February 2001, holding an account no. 101439 ("the account"), denominated in Euros. The Second Defendant ("Mrs. Attar") is the wife of Mr. Attar.
3. This case concerns a cheque dated 12th April, 2001 ("the cheque") for FF8,510,490, drawn by Carrefour France SAS ("Carrefour"), a French supermarket, on its account with Paribas BNP ("Paribas") and made payable to APGIS, an acronym for L'Association De Prevoyance Interprofessionelle Des Salaries (translated, the Salaried Professionals Provident Society).
4. On the 27th April, 2001, Mr. Attar presented the cheque to Credit Suisse for collection.
5. Subsequently, Credit Suisse credited Mr. Attar's bank account with the amount of the cheque ("the proceeds of the cheque").
6. On or about the 11th May, 2001, Credit Suisse transferred £525,000, part of the proceeds of the cheque, into an HSBC account (number 61369253) in Park Lane in the joint names of Mr. and Mrs. Attar ("the HSBC account").
7. In these proceedings Credit Suisse alleges that the cheque had been misappropriated. It seeks to recover from Mr. Attar the proceeds of the cheque and an indemnity in respect of any losses it has incurred to third parties in respect of the cheque. The claim is put in restitution and on the ground of Mr. Attar's alleged bad faith, amounting to dishonesty. As against Mrs. Attar, Credit Suisse claims repayment of the £525,000, referred to above, plus interest. The claim against Mrs. Attar is brought in restitution only; no allegations of bad faith are advanced against her. For their part, Mr. and Mrs. Attar deny any liability to Credit Suisse.
8. At the trial Credit Suisse was represented by Mr. Dale. Mr. and Mrs. Attar represented themselves.
9. It has been common ground between the parties that Monegasque law governed the receipt of the proceeds of the cheque. For reasons which will become apparent, that is plainly correct with regard to Mr. Attar. The position of Mrs. Attar is not entirely straightforward; the potential significance of the point is that, as will be seen, Monegasque law does not, on the evidence, have a defence of change of position. Accordingly, as Mrs. Attar is a litigant in person, the impact of English law will be addressed, notwithstanding the common ground hitherto.
THE START OF THE TRIAL
10. This trial was long-scheduled to commence on Monday 12th January, 2004; in the event, for administrative reasons, the intended start date was postponed until Tuesday 13th January. Nothing turns on that. On the 13th January, the Second Defendant ("Mrs. Attar") applied on behalf of both Defendants for an adjournment. Later in the day, the First Defendant ("Mr. Attar") also appeared and added his voice to the application.
11. The grounds of the application were twofold. First, that the First Defendant ("Mr. Attar") and Mrs. Attar wanted an adjournment to obtain funds for legal representation. Secondly, that Mr. Attar's ill-health meant that the trial should not proceed.
12. As I indicated at the conclusion of the argument, I was not minded to grant any adjournment for the purpose of obtaining funding for legal representation. In a nutshell, this leg of the argument involved an application for the further relaxation of a freezing order, obtained by the Claimant ("Credit Suisse") originally from David Steel J. and as subsequently amended ("the freezing order"), to permit Mr. and Mrs. Attar to use the funds (thus released) for legal representation. Not only were the difficulties here insuperable but the application was far too late, bearing in mind the inconvenience to which any substantial adjournment would have given rise and the real risk that costs thrown away by Credit Suisse would prove irrecoverable.
13. In a little more detail:
(i) The freezing order had already been relaxed in respect of English assets to cover living expenses and legal representation; but the funds have run out and legal representation has ceased. In particular, the freezing order was relaxed to permit the sale of an English property ("the West Kensington flat") - but although that property has been on the market since March, 2003, no sale has been made. In this regard, Credit Suisse cannot be asked to do more and no useful purpose would be served by an adjournment. The sale of the West Kensington flat has been in Mr. Attar's hands since March, 2003; likewise, he has been at liberty, since then, to borrow against the security of that property.
(ii) So far as concerns a house in France ("the Mougins property"), questions do arise on the somewhat opaque evidence of French Law as to whether any relaxation might prejudice Credit Suisse's security; be that as it may, the Defendants did not seek a relaxation of the freezing order in this regard when such matters were explored at a hearing before Tomlinson J., on the 3rd March 2003; nor has this matter been raised on any application subsequently. Again, in all the circumstances, it was now too late to seek a necessarily lengthy adjournment to pursue this issue.
(iii) Finally, so far as concerns certain assets of Mr. Attar in Monaco, these have been frozen as a result of criminal proceedings there; neither this Court nor the Claimant has power to "unfreeze" those assets. Accordingly, on the available material, an adjournment to permit Mr. and Mrs. Attar to obtain legal representation would serve no useful purpose.
14. The second ground of the application to adjourn was ill-health. Here, for reasons which it is now unnecessary to set out in detail, if the impression had been created that Mr. Attar was seeking to do everything possible to frustrate the commencement of the trial, he had only himself to blame. That said, following much delay essentially attributable to Mr. Attar, he submitted to a joint medical examination on the afternoon of the 13th January. In the event, a Dr. Parson, the General Practitioner who conducted the examination, concluded that by reason of back pain and related mobility or movement difficulties, Mr. Attar was not fit to attend trial during that week.
15. Although Credit Suisse nonetheless opposed any adjournment, it seemed to me plain, in the interests of justice, that the trial should be adjourned. Mr. Attar is a litigant in person. While it is true that Dr. Parson's conclusion could not have been determinative of the matter, it did not seem appropriate to second-guess it. Notwithstanding the unfortunate history in this regard (already touched upon), it would not have been right to require Mr. Attar to conduct the trial during that week in the light of Dr. Parson's conclusion. However, I made it plain to the parties that (subject to any further matters arising) the trial would be adjourned only until the following Monday (the 19th January) and that it was in all parties' interests that the trial should then proceed.
16. On Friday 16th January, Mr. Attar saw a specialist, a Dr. Martin. In summary, while Dr. Martin reported that treatment of Mr. Attar would continue, he concluded that Mr. Attar was fit to attend the trial in the week beginning Monday 19th January. Sensibly, in the light of Dr. Martin's opinion, Mr. Attar made no further application to adjourn the trial on health grounds. The trial therefore effectively commenced on Monday 19th January.
17. On the 19th January, Credit Suisse indicated an intention to apply for summary judgment. I was not minded to entertain this application at so late a stage and Credit Suisse did not pursue it. The trial therefore proceeded.
THE WITNESSES
18. As to witnesses of fact, Messrs. Poher, Spinazze and Schreier were called by Credit Suisse and attended to give oral evidence. For the Defendants, while Mr. Attar gave oral evidence and was cross-examined, Mrs. Attar, though she attended the trial throughout, chose not to do so. Mrs. Attar said that her husband had told the truth and there was nothing she could usefully add.
19. As to expert evidence, a Monegasque lawyer, a Mr. Canac produced a report and gave oral evidence, called by Credit Suisse. No expert evidence was called on behalf of Mr. and Mrs. Attar.
20. A Mr. Bogner, who could have been an important witness, left his employment with Credit Suisse in the aftermath of the incident concerning the cheque. According to Mr. Poher, Credit Suisse's in-house counsel and compliance officer, the bank could have instituted disciplinary proceedings against Mr. Bogner but the matter was instead dealt with amicably and Mr. Bogner resigned. Credit Suisse's complaint was that Mr. Bogner had not done his job properly in the matter of knowing his client. It may be added that, as will become apparent, Mr. Bogner was responsible for agreeing to process the cheque and had failed to notice that it was not negotiable (endorsable). I should underline that neither party alleged that Mr. Bogner was implicated in any dishonest dealing with the cheque. At all events, Mr. Bogner cannot now be found and is understood to be beyond the seas. In the circumstances, I admitted his witness statement pursuant to a Civil Evidence Act Notice. As Mr. Attar not unfairly pointed out, he would have wished to cross-examine Mr. Bogner. In assessing the weight to be given to Mr. Bogner's evidence, I of course take into account the fact that his statement evidence has not been tested in cross-examination.
THE FACTS
21. I turn to the facts. Much of the history is strongly disputed, moreover in a manner which leaves little room for innocent misunderstandings. Against this background, while I shall express some conclusions in the course of recounting the history, in the main it will be convenient to record the rival accounts and to defer conclusions until later.
(1) Mr. Attar
22. It is common ground that Mr. Attar was born in Beirut, in the Lebanon, in 1944. He holds dual Lebanese and British citizenship; the latter he acquired following his marriage to Mrs. Attar, who is a British citizen by birth.
23. Mr. Attar has been engaged in business ventures since about 1967, when he began trading using the name "Amfa" - an acronym of his full initials. Amfa was essentially an import-export business, based in the Lebanon. Amongst other activities, it exported goods to the Arabian/Persian Gulf and elsewhere. Though still in existence as a firm, it ceased trading in the mid-1990s. The Middle East had changed.
24. In about 1995, Mr. Attar established Gulf Media International ("GMI"), a family company. He was the Managing Director; shares were held by him, Mrs. Attar, their children and his Lebanese lawyer, a Mr. El Mir (of whom more, later). The company earned income from the rental of billboard space and the provision of trolley services at airports. According to Mr. Attar, the business of GMI was built up progressively between 1995 and 2001; by then, he was in a position to take out of the company some £300,0000 per year. The company's bank was the Beirut-Riyadh bank. GMI stopped trading some two years ago; Mr. Attar's evidence was that it had lost business by reason of the freezing order.
25. From about 1975/6 and following the unrest in the Lebanon, Mr. Attar moved between Italy and the Lebanon, although he continued, he said, to spend more time in the Lebanon. By about 2000/2001, he was dividing his time between the Lebanon and France, spending most of his time in France. GMI was, however, registered in the Lebanon and had an office there; that office was re-possessed by the Beirut-Riyadh bank after the making of the freezing order. Mr. Attar rented but did not own a home there. In France, Mr. Attar (or Mr. and Mrs. Attar, it matters not for present purposes), had owned a "holiday villa"; that villa was sold and the Mougins property was purchased. Mr. Attar's evidence was that he had only spent a few months in this country between 1994 and 2001. As for the West Kensington flat, he had paid a deposit on it when it was still under construction in 2000; it was not completed until about September 2002.
26. As to Mrs. Attar, by 2000/2001, she spent much of her time in France and a little time in England. She (not Mr. Attar) owned a property in Hampton Wick; it was not rented and was instead available for use by the Attar children when on holiday from university or boarding school.
27. By the beginning of 2001, Mr. Attar said that he had the following bank accounts:
(i) In the Lebanon, an account with the Beirut-Riyadh bank, already mentioned.
(ii) In France, an account with Societe Generale, used by Mr. and Mrs. Attar for household purposes concerning the Mougins property; interposing here, later, after the commencement of legal proceedings concerning the cheque, Mr. Attar had been asked to close this account and began banking with Paribas; additionally, at some stage, Mr. Attar appears to have had an account with Bank Entenial.
(iii) In England, Mr. and Mrs. Attar held a joint account, the HSBC account; this account was used for savings and household expenditure and was later used to pay solicitors' bills.
(iv) In Switzerland, Mr. Attar had opened an account with the UBS in the late 1990s, for investment purposes; Mr. Attar said that he had opened this account with a view to finding funds for investment projects in the Lebanon, as part of the re-building of that country after the earlier civil strife; nothing, had however come of these hopes and no funds had been deposited there.
28. Much of this material contains no more than background information about Mr. and, to some extent, Mrs. Attar which I have recorded for completeness. Some of it, I fear, involved an attempt by Mr. Attar to play down his connections with this country, going back to his attempt to stave off proceedings in this jurisdiction; in this regard it is noteworthy that in his first Affirmation, Mr. Attar asserted that his "permanent residence" was in Beirut, a claim which does not lie easily with the totality of the evidence as summarised above. For present purposes of course, all that is water under the bridge, though it remains relevant to one disputed issue to which I shall shortly come. Finally, material as to Amfa's trading, Mr. Attar's income from GMI, the joint HSBC account and the existence of the UBS account in Switzerland is relevant or potentially relevant to other more central issues, to be dealt with later.
Opening the account
29. Somewhat surprisingly, even the opening of the account (i.e., Mr. Attar's account with Credit Suisse) has generated its share of curiosity and controversy.
30. To begin with, although there was no dispute that Mr. Attar was introduced to Credit Suisse by Mr. Bogner, there was disagreement as to how this introduction came about.
31. According to Mr. Bogner's witness statement, he had known Mr. Attar for some years. In late 2000, Mr. Bogner was employed as a "relationship manager" by United European Bank ("UEB") in Monaco; he claims that he was Mr. Attar's relationship manager and that Mr. Attar had an account with UEB. In February 2001, Mr. Bogner was in the process of leaving UEB to join Credit Suisse (he actually commenced employment at Credit Suisse in or about April 2001). At about that time, Mr. Bogner states that Mr. Attar approached him and indicated that he wanted to open an account at Credit Suisse. Moreover, Mr. Attar did not wish to wait until Mr. Bogner had formally commenced employment at Credit Suisse.
32. For his part, Mr. Attar said that he had never personally held an account with UEB; his only connection with UEB was as the signatory on a trust account. As for Mr. Bogner, Mr. Attar believed that he had met him in 1999. Mr. Attar had referred in his first Affirmation to Mr. Bogner as his "relationship manager" only because that was Mr. Bogner's title. Mr. Bogner was aware that Mr. Attar had good contacts with businessmen in the Arab world; Mr. Bogner had asked Mr. Attar to introduce him to his business acquaintances, with a view to persuading them to open accounts at UEB so as to strengthen Mr. Bogner's position there. Mr. Bogner had not, however, pressed Mr. Attar to open an account at UEB himself. Mr. Attar had not wanted to open an account at Credit Suisse; it was Mr. Bogner who encouraged him to do so, with a view to Mr. Attar continuing to introduce Mr. Bogner to other potential customers.
33. At all events, on the 13th February, 2001, a meeting was arranged at Credit Suisse, attended by Mr. Attar, Mr. Bogner and Mr. Schreier, a banker at all material times employed by Credit Suisse ("the 13th February meeting"). The purpose of the meeting was for Mr. Attar to be identified to Credit Suisse, in effect as part of Credit Suisse's "know your customer" regime. Plainly Mr. Bogner, not yet an employee, could not undertake this exercise for Credit Suisse; hence, Mr. Schreier's presence at the meeting. The sources of information available to Credit Suisse at the meeting, were Mr. Attar's British passport, which he had brought with him and that which Mr. Attar told Mr. Schreier during the meeting.
34. In the course of the 13th February meeting an Account Application ("the application form") was completed. There was some dispute as to who completed it but I cannot think that matters. If it matters, I accept Mr. Schreier's evidence that an assistant of his completed the neat copy from a rough version compiled by him during the course of the meeting. The assistant then brought the application form back into the meeting, where it was signed by Mr. Attar. Thereafter it was signed by Mr. Schreier, by a Mr. de Maddalena (Chief Executive and a director of Credit Suisse) and by someone unidentified from the legal department.
35. The application form records (inter alia) that Mr. Attar was born in Beirut and was of "English" nationality; reference was made to his British passport details. Mr. Attar's "tax address" was given as "1 Wen House - 2B High Street, Hampton, Wick, Surrey ...". His profession/occupation was stated to be "entrepeneur".
36. There is further dispute as to the contents of the application form. Mr. Attar says, broadly, that he had made clear his dual British - Lebanese citizenship and did not wish to give an address in the United Kingdom as he did not live here. He alleges, however, that Credit Suisse preferred him, in effect, to emphasise his European rather than Lebanese connections; a French address would have given rise to "complications" and Credit Suisse preferred a London to a Beirut address. All these allegations are denied by Mr. Bogner and Mr. Schreier; in summary, their version of events is that Mr. Schreier simply recorded the information provided by Mr. Attar under the various headings. Mr. Attar said that he was a businessman, an expression which Mr. Schreier translated and recorded as "entrepeneur".
37. At or more probably subsequent to the 13th February meeting, a Customer Profile ("customer profile") was completed by Credit Suisse. Mr. Schreier and Mr. Bogner were responsible for its completion, a matter to which I shall return in a moment.
38. The customer profile included the following material:
Other bank accounts
HSBC London 25 years Royal Bank of Scotland LondonOrigin of the capital
Of Lebanese origin, our client left his country in the 70s. Rich Lebanese family. Our client has obtained British nationality.Estimated Wealth
Owner of Gulf Media, an advertiser in all the airports of the Persian Gulf. Owner of real estate in England, France and Lebanon.Source(s) of income
Income from his commercial activities in 'Gulf Media', income from rent and sale of real estate. Currency and share trading activities.Funds to come
70 million USD. Estimate wealth 150 million USD.
39. There was much controversy about the information recorded in the customer profile. The italicisation is added; it reflects those parts of the Customer Profile, the truth of which Mr. Attar denies; he further denied having given Mr. Bogner or Mr. Schreier any such information. He had never banked with the Royal Bank of Scotland; he had not left the Lebanon in the 1970s; he came, as Mr. Bogner well knew, from a middle class not a rich Lebanese family; he did not own land in England - only his wife did; he did not own real estate in Lebanon, instead he rented property there; he did not engage in currency and share trading; there were not US$70 million to come and nor was his wealth US$150 million or anything like it. All these matters said Mr. Attar, had been fabricated by Mr. Bogner to impress his new employers.
40. In his evidence, Mr. Schreier said that the customer profile was compiled from that which Mr. Attar said to him and from information given by Mr. Attar to Mr. Bogner. Mr. Schreier could not remember whether he was present when that information was imparted by Mr. Attar to Mr. Bogner and, for my part, I do not think he was. Mr. Schreier said that he remembered Mr. Attar telling him that he was the owner of Gulf Media and that he owned real estate. Beyond that, only Mr. Bogner could speak to the customer profile and, in particular, all the items which I have italicised.
41. Mr. Schreier further told me that Credit Suisse's minimum customer requirement for its private banking service (which this was) was ownership of assets worth Euros 500,000.
42. According to Credit Suisse minutes, apparently dated 12th April, 17th May and 7th June, 2001, Mr. Attar informed the bank that that he was expecting to deposit some US$15-30 million.
43. In the event, however, there was no activity on the account at all until the proceeds of the cheque came to be credited to the account.
44. Pulling the threads together on the opening of the account, certain conclusions can be stated at this stage:
(i) I am satisfied that both Mr. Bogner and Mr. Attar wanted the account to be opened. In the case of Mr. Bogner, this demonstrated to his new employers that he was introducing a new client. In the case of Mr. Attar, for whatever reason (see (ii) below) he must have wished to do so; after all, on his evidence, which I accept on this point (there is indeed nothing other than Mr. Bogner's statement to contradict it), he had never opened an account with UEB, despite Mr. Bogner's presence there.
(ii) It is not easy to discern any specific purpose for which Mr. Attar opened the account. It will be recollected that, for investment purposes, he already had available the UBS account in Switzerland. That said, the mere fact of a bank account being opened for no particularly good reason is not by itself remarkable. Certainly, I am not prepared to accept a submission later advanced by Mr. Dale, namely, that Mr. Attar opened the account with a view to subsequently depositing the misappropriated cheque. Plainly, in February 2001, Mr. Attar could not have known of the cheque which did not come into existence until April 2001. If and insofar as it was suggested that Mr. Attar might have had other nefarious purposes in mind, the suggestion is simply speculative and I say no more of it.
(iii) The information on the application form was supplied by Mr. Attar. He was not pressed into supplying that information by Credit Suisse. Having heard Mr. Schreier give evidence, I have no reason to doubt what he said either in this connection or with regard to the customer profile (see below). In the context of the account, all concerned were more interested in Mr. Attar's European connections rather than his Lebanese connections. There was nothing sinister in this. As already foreshadowed, in my judgment this debate only arose because of an attempt on Mr. Attar's part to dispute the jurisdiction of the English court over these proceedings.
(iv) As already anticipated, I accept Mr. Schreier's evidence as to what was said to him in connection with the customer profile.
45. What remains is the disputed material set out in the customer profile, in particular going to Mr. Attar's wealth and funds to come. As to this topic, a number of preliminary observations are in order. First, I am satisfied that it was inaccurate; US$70 million was not destined for the account, nor did Mr. Attar's "wealth" amount to US$150 million or anything like it. Furthermore, I am satisfied that the information in the Credit Suisse client minutes as to the forthcoming deposit of US$15-30 million was likewise inaccurate. Secondly, the Credit Suisse case that Mr. Attar supplied all this exaggerated and incorrect information depends and depends solely on Mr. Bogner. Mr. Schreier cannot assist. Nor can the minutes provide independent support; there is no evidence that anyone other than Mr. Bogner was involved in compiling them. Thirdly, the choice here is stark; either Mr. Attar falsely supplied this information; alternatively, Mr. Bogner fabricated it. Innocent if foolish "puffing" or exaggeration cannot account for the scale of this discrepancy.
46. The matter is not easily resolved. As for Mr. Attar, it is one thing, with respect, for him to inflate his own importance; it is another for him to supply figures which, on the evidence, were lacking in all realism. Further, I would not lightly conclude that Mr. Attar had deliberately supplied false information solely on the basis of Mr. Bogner's (statement) evidence. As for Mr. Bogner, it is again one thing for him to have been lax in getting to know his customer and to look uncritically on promises of future business; but another for him to have fabricated the figures - a very serious allegation indeed. In that regard, insofar as Mr. Attar suggested otherwise, a fabrication of this nature made no sense; Mr. Bogner had already secured employment with Credit Suisse and the invention of wholly fictitious prospects could only lead to certain disappointment in the not too distant future.
47. In the light of these difficulties, I do not propose to reach a conclusion on the origin of this false information in the customer profile in isolation. I shall instead return to this topic, with the benefit of the perspective gained from a consideration of the Credit Suisse case of bad faith against Mr. Attar as a whole.
(3) The cheque and Mr. Attar's account of how he came by it
48. As already recorded and as is common ground, on the 27th April, 2001, Mr. Attar presented the cheque to Credit Suisse for collection. Before coming to the events of the 27th April, it is necessary to say something about the cheque and Mr. Attar's account of the circumstances in which he came to obtain it.
49. The cheque was a non endorsable cheque; on its front, it stated clearly (in translation):
Not endorsable unless endorsed in favour of a bank, a savings bank or a similar institution.
On its reverse side, there is an asterisk, against which is written "APGIS"; immediately underneath (holding the cheque vertically), there is a signature, plainly beginning with a G and not resembling "Apgis" at all ("the G signature"). Underneath that signature is a further signature which, it is common ground, is that of Mr. Attar himself.
50. I turn next to Mr. Attar's explanation of how he came by the cheque. This was as follows:
(i) In the 1980s, Mr. Attar was introduced to a Mr. Jaber, a Lebanese national, by the Lebanese Ambassador to (what I shall for simplicity and ignoring name changes call) Zaire. Reassured by the reference from the Ambassador, in 1990, Mr. Attar, then, as will be recollected, trading as Amfa, entered into a contract for the sale and delivery of textiles to Mr. Jaber in Zaire; the price was US$266,017 payable in cash but on 90 day credit terms. There are, it must be said, some puzzles as to the documentation surrounding this transaction but, as Credit Suisse does not dispute its genuineness, no more need be said of that. Mr. Jaber failed to pay.
(ii) Having tried and failed to persuade Mr. Jaber in Zaire to pay the outstanding debt, in 1991 Mr. Attar brought proceedings against Mr. Jaber in the Lebanon. This was not an empty step; Lebanon was of course Mr. Jaber's country of origin and he owned property in the south of the country, albeit that such property could not be realised because of the political situation. Mr. Jaber, however, did not appear and Mr. Attar obtained a judgment in default from the Lebanese Court on the 16th or perhaps 26th June (it matters not which), 1992, in the amount of US$266,000. Mr. Jaber was also sentenced to three months imprisonment, in absentia. The judgment, it must be noted, did not award interest on the contractual claim; nor did it say anything about judgment debt interest. Thereafter, there was no contact between Mr. Attar and Mr. Jaber for some nine years, until 2001.
(iii) In March 2001, out of the blue, Mr. Jaber contacted Mr. Attar's lawyer in the Lebanon, Mr. El-Mir (to whom reference has already been made). Apparently, Mr. Jaber wished to pay the judgment debt plus interest. By letter dated 28th March, 2001, Mr. Jaber confirmed to Mr. El-Mir that he agreed to pay Mr. Attar US$910,000 in full settlement of the claim; in return, Mr. Jaber wished to receive a letter confirming the payment so that he could present it before the Court of Appeal in Beirut and escape the prison sentence.
(iv) Pausing here, it is convenient to note at this stage a number of features of Mr. Jaber's approach which were confirmed in the course of Mr. Attar's evidence. First, Mr. Jaber did not seek to negotiate at all, to pay a lower sum. Secondly, although the judgment said nothing about interest, Mr. Jaber offered from the outset to pay interest at some 20% per annum. In this regard, Credit Suisse produced evidence of a Lebanese judgment debt rate of 9%, fixed since 1986; in fairness, Mr. Attar disputed the correctness of this figure, said that there was nothing remarkable about a 20% interest rate figure and pointed to evidence which he produced of lending rates approaching or sometimes comfortably exceeding 20%. Thirdly, the calculation was not straightforward. As Mr. Dale demonstrated, simple interest at 20% per annum on a judgment debt of US$266,000 produces, over the time in question, a figure of approximately US$745,000 - not US$910,000. Mr. Attar's explanation was that the judgment debt was first converted into Lebanese Lira at the rate prevailing in September 1992; then a 20% annual rate of interest was applied to the figure thus obtained for a period of 8 years; thereafter, the total figure was converted into French Francs ("FF").
(v) Reverting to the narrative, by (copy) letter also dated 28th March, 2001, Mr. El-Mir confirmed to Mr. Attar that agreement had been reached with Mr. Jaber for payment of FF6,460,490 within three months. Mr. El-Mir advised Mr. Attar to accept the proposed solution. Mr. Attar followed that advice. The letter was a genuine letter from his lawyer. The original had been liened by his former (and unpaid) solicitors. Mr. Attar did not have the money to bring Mr. El-Mir to London to give evidence and, as a layman, had not thought of producing a statement from Mr. El-Mir, or had been put off the idea by the reservations voiced by Credit Suisse's solicitors.
(vi) In early April 2001, Mr. Jaber then telephoned Mr. Attar. According to Mr. Attar, Mr. Jaber said that a person named Jean-Marc Apgis, whom Mr. Jaber described as a "business associate, a French African national", would contact Mr. Attar and arrange to meet in order to pay him the agreed sum.
(vii) By a further letter dated 23rd April, 2001, Mr. El-Mir wrote to Mr. Attar saying that he had received a telephone call from Mr. Jaber. The settlement and compensation would be made "from a transaction with a merchant in Africa". The cheque would be greater than the agreed amount; therefore, to avoid "expensive transfers and exchange commissions and charges, and for Tax reasons", Mr. Attar was asked to accept payment of a cheque made out in FF, convert the amount into US$ and pay the difference to an Italian gentleman nominated by Mr. Jaber with whom Mr. Jaber had a business relationship. Mr. El-Mir further advised Mr. Attar that before he paid the difference to the "Italian gentleman", he should first ensure that the cheque had been collected and the proceeds credited to his account.
(viii) On the 24th April, 2001, Mr. Attar was telephoned on his mobile telephone by a man who identified himself as Jean-Marc Apgis (for simplicity, hereafter "Mr. Apgis"). Mr. Apgis identified himself as a business associate of Mr. Jaber. He wanted to meet with Mr. Attar to pay him. They agreed to meet in San Remo, Italy, on the 26th April, at 17.15, outside the railway station. The venue was chosen as it was a landmark. Mr. Apgis would identify himself by means of a sign with his name on it.
(ix) Mr. Attar and Mr. Apgis duly met and then proceeded to a small café nearby. Mr. Apgis was accompanied by two Italian men; one of the two identified himself as a Mr. Frassanito; the other was not identified to Mr. Attar but appeared to be a driver.
(x) Mr. Apgis handed over the cheque. Mr. Attar observed that it was made out to "Apgis". Mr. Apgis then signed the back of the cheque, with the apparent intention of indorsing it to Mr. Attar. Mr. Apgis also showed Mr. Attar what was said to be his identity card ("the identity card"), containing a photograph of him; Mr. Attar asked for a photocopy and Mr. Apgis went to a shop nearby and apparently made one, which he gave to Mr. Attar. As it is put in the Further Information supplied by Mr. Attar:
[Mr. Attar] ... believed that the photocopy of the identity card confirmed that the cheque had been duly indorsed by Mr. Apgis whom he believed to be the payee of the cheque.
(xi) Because the amount of the cheque exceeded the agreed sum of FF6,460,490 by FF2,050,000, as Mr. Attar had been forewarned, Mr. Apgis asked Mr. Attar to pay the difference to Mr. Frassanito once the cheque had cleared and Mr. Attar was in funds. Mr. Attar agreed and took Mr. Frassanito's contact details for this purpose. Mr. Frassanito wanted the amount paid as a lump sum in cash.
51. Pausing for a moment here, the identity card contained a signature beneath the photograph. The briefest of glances would reveal that the signature could not be that of someone with the name "Apgis". To an untutored eye, the signature does, however, resemble the G signature on the reverse of the cheque.
52. Understandably, Mr. Attar was extensively cross-examined on this account of events. It was put to him that his account was incredible and untrue. It was further put that, if true, the circumstances would have given rise to suspicion on the part of any honest businessman. Mr. Attar denied all this. He denied that the arrangements were clandestine or extraordinary. He entertained no suspicions whatsoever; he was pleased that the debt was to be paid. He had asked for a copy of the identity card, not because of any suspicions but because he knew that Credit Suisse would need it for its due diligence. In his pleasure at receiving payment, he did not "close his eyes" (as it was put to him) to suspicion of the truth. He did not notice the signature on the identity card; nor did he notice that the cheque was not negotiable (endorsable). Though the amount of the cheque exceeded what he could expect by way of two years' annual income from GMI, he said nothing whatever about the cheque to Mrs. Attar, until after the 28th June, when problems had first surfaced in connection with the cheque.
53. I refrain for the moment from expressing any conclusions with regard to Mr. Attar's acquisition of the cheque.
(4) Presentation of the cheque; the 27th April meeting and the crediting of the proceeds of the cheque
54. I come next to Mr. Attar presenting the cheque to Credit Suisse for collection. He met with Mr. Bognor ("the 27th April meeting"); no one else was present; no note was made of the 27th April meeting, at least at the time.
55. The accounts of what transpired at the 27th April meeting differ markedly. Mr. Bogner's witness statement says this:
21. At the meeting Mr. Attar told me that through the connections of Gulf Media International, he had personally entered into a sales contract with a Mr. Apgis. He said that he had sold Mr. Apgis computer hardware and that the cheque was in payment for that transaction. I did not ask for shipping documents because I had no reason to doubt his story. Mr. Attar asked how long it would take for the cheque to be credited to his account. Mr. Attar said the money belonged to him and was for investment ...
22. I reviewed the cheque and was satisfied that it was endorsed in Mr. Attar's favour by the original payee, "APGIS". I believed what I was told by Mr. Attar as to the background and his entitlement to the cheque. ... Seeing Mr. Attar as the bearer of the cheque with his signature on the back I was satisfied that it had been indorsed to him.
Subsequently, apparently on the 7th June, 2001, Mr. Bogner says that he recorded the explanation given to him by Mr. Attar at the 27th April meeting; the note in question says that the proceeds "are revenues due to him from his company Gulf Media International".
56. Here too, there is a stark conflict of evidence. Mr. Attar's version of events is that he presented the cheque to Credit Suisse because, living in Mougins, the bank in Monte Carlo was "next door". Moreover, having opened the account in February, it was time to activate it. At the bank, he went to see Mr. Bogner, rather than simply handing the cheque over to a cashier; the cashier would in any event have referred him to his relationship manager; this was private banking and his account was not a cheque account. He explained all the circumstances of his acquisition of the cheque, as outlined above, because he was aware of there being law as to money laundering. In summary, Mr. Attar explained to Mr. Bogner: (1) how the debt had arisen; (2) the arrangement that Mr. Apgis would pay him; (3) the meeting with Mr. Apgis; (4) the indorsement of the cheque; and (5) the need to repay the excess, once the cheque had cleared. Further, he volunteered and handed over the identity card to assist Credit Suisse with its due diligence inquiries. Mr. Bogner looked at the cheque and the identity card and pronounced himself satisfied. Mr. Bogner asked Mr. Attar to sign the cheque on the reverse side, which he did, so that Credit Suisse could proceed to collect the cheque for Mr. Attar's account and present it for payment. Mr. Attar denied that there was any contradiction between his approach to this meeting and his evidence that he had entertained no suspicions with regard to the cheque.
57. Mr. Bogner, for his part, denies both that Mr. Attar showed him the identity card during the 27th April meeting and that Mr. Attar gave him the explanation outlined above. Had the identity card been shown to him, Mr. Bogner would immediately have noticed the curiosity of the signature; had Mr. Attar's explanation of the background been given, Mr. Bogner would not have been satisfied and would have insisted on further inquiries being made.
58. It is common ground that Mr. Attar was then given a receipt for the cheque and that, thereafter, Credit Suisse proceeded to process it.
59. The cheque was paid by Paribas and, on or about the 9th May, 2001, Credit Suisse in turn credited the account with Euro 1,297,415, the proceeds of the cheque.
60. It is convenient to defer my conclusions on the true facts of the 27th April meeting until later. I turn to Mr. Attar's dealings with the proceeds of the cheque.
(5) Mr. Attar's dealings with the proceeds of the cheque: Initial dealings
61. It is common ground that Mr. Attar dealt with the proceeds of the cheque as follows:
(i) On the 11th May, 2001, he transferred the Euro equivalent of £525,000 to the (joint) HSBC account, held with Mrs. Attar.
(ii) Between the 9th and 22nd May, 2001, Mr. Attar withdrew Euro 160,071.47 (approximately £98,450, at the rate of exchange prevailing on the 11th May, 2001) in cash. These cash withdrawals were in varying amounts. Expressed in FF, they were as follows:
FF50,000 on the 9th May;
FF350,000 on the 10th May;
FF100,000 on the 11th May;
FF400,000 on the 14th May;
FF150,000 on the 22nd May.(iii) Between the 17th and 21st May, 2001, Mr. Attar used the balance of the proceeds of the cheque, namely, Euro 285,424.12 (approximately £175,000, at the rate of exchange prevailing on the 11th May, 2001) to purchase 86,842 Internolix AG shares ("the shares"). The shares then remained in the custody of Credit Suisse.
Paying Mr. Frassanito
62. It will be recollected that, on his account of events, Mr. Attar owed Mr. Frassanito FF2,050,000, a matter which of course is not common ground. Mr. Attar's evidence was that he discharged this debt by paying Mr. Frassanito (1) FF1,050,000 in cash, constituting the entirety of the cash withdrawals from the account referred to above; and (2) FF1,000,000 by way of a SWIFT transfer from the HSBC account. Mr. Attar's explanation as to the manner in which he paid Mr. Frassanito proceeded as follows:
(i) Mr. Frassanito wanted payment in a single lump sum. Accordingly, on the 9th May, Mr. Attar went into the bank, with Mr. Frassanito and asked Mr. Bogner for FF2,050,000 in cash. Mr. Bogner checked with the cashier and said that he could not do it by way of a single payment and would instead have to pay in tranches. There was a limit on the cash available in the branch, as the bank might need cash on any given day for other customers. On the 9th May, according to Mr. Attar, Mr. Bogner said that he could only withdraw FF50,000; he could return on the 10th May and withdraw FF350,000 and then on the 11th May and withdraw FF100,000. On the 11th May, Mr. Bogner said, they could discuss further withdrawals.
(ii) On the 10th May, Mr. Attar and Mr. Frassanito returned to the bank and duly withdrew FF350,000. Nothing more was said and they returned on the 11th May and withdrew FF100,000. Also on that day, Mr. Bogner said that Mr. Attar could withdraw FF400,000 on the 14th May and FF100,000 on the 22nd May. Mr. Bogner would explore whether the remaining FF1 million could be paid in cash on or after the 22nd May.
(iii) On the 14th May, Mr. Attar returned, as usual with Mr. Frassanito, to withdraw the agreed amount. The same procedure was followed on the 22nd May. On that day, Mr. Attar was told that it would take a long time for Credit Suisse to produce the remaining FF1 million in cash.
(iv) By this time, Mr. Attar said, Mr. Frassanito had become frustrated and was tired of waiting. Accordingly, Mr. Attar decided to pay him the balance of FF1 million by way of a SWIFT transfer from the HSBC account to Mr. Frassanito's account with the UBS in Switzerland. Instructions to this effect were given on the 21st May. On the 28th May, Mr. Attar sent a "chasing" letter to HSBC, complaining that the funds had not yet reached Mr. Frassanito's account and that "this has caused me a lot of embarrassment". Ultimately, as I understood it, the transfer of the FF1 million was effected.
63. This topic was strongly contested in the Credit Suisse evidence and in cross-examination of Mr. Attar. In his evidence, Mr. Poher, as noted, Credit Suisse's compliance officer, denied that there was any bank rule limiting the amount of cash withdrawals; further, in private banking there were frequently withdrawals of large sums every day and that Mr. Attar's withdrawals were not "very high" with reference to the normal way in which the branch operated. That said, as a matter of the bank's internal rules, transactions above Euro100,000 required justification from the Credit Suisse account manager in question. Very approximately, at the time in question, FF400,000, the highest individual withdrawal made by Mr. Attar, amounted to some Euro60,000. With regard to the purpose or destination of the withdrawals, the evidence was that no one at Credit Suisse knew anything of Mr. Frassanito. To the contrary, a "call report" (i.e. a note of a conversation with the client) generated by Mr. Bogner, dated the 22nd May, stated that Mr. Attar had explained the withdrawals by saying that the cash was to pay for renovations at the Mougins property.
64. Against this background, it was put to Mr. Attar in cross-examination, that he paid Mr. Frassanito (if the latter existed and he paid him at all) in the manner which he did, to avoid attracting attention to the sums transferred; moreover, he had lied with regard to the explanation given in the call report; overall the suggestion in cross-examination was that, in effect, the means adopted were clandestine and bore the hallmarks of dishonesty. All this, Mr. Attar denied; as with many of the bank's notes, he alleged that the call report had been fabricated. It was further put that if (which Credit Suisse denied) there had been any problem in obtaining cash from the bank, then Mr. Bogner could only have known on the day in question; he could not, for example, have known on the 9th May what amount of cash would be available on the 10th and 11th May. To this Mr. Attar said, "ask Mr. Bogner". Conversely, it was put to Mr. Attar that if Mr. Bogner did know what cash would be available on future days, then it was absurd to suggest that he could not have arranged for the entire sum to be available and that it was equally absurd for Mr. Attar to make repeated visits to the bank, in particular, routinely accompanied by Mr. Frassanito. Mr. Attar disputed all these suggestions too. Asked why he had given instructions for a SWIFT transfer on the 21st May if (as he had said) Mr. Frassanito only became frustrated on the 22nd May, he said that he may have made a mistake as to the precise dates. He had used the HSBC account to make the SWIFT transfer, not to make tracing more difficult but because he had sufficient funds there and he wanted to utilise the funds in the (Credit Suisse) account for investment. I return, later, to my conclusions in this regard.
Change of position
65. In their Points of Defence drafted by counsel and bearing Statements of Truth from them both, Mr. and Mrs. Attar had asserted both the applicability of Monegasque law and a defence of change of position. The evidence of Monegasque law I shall come to later. Confining myself here to the matters relied on in support of this defence and which, in the light of the Further Information supplied by Mr. and Mrs. Attar, remain live, these are as follows:
(i) The payment of FF2,050,000 to Mr. Frassanito. Save to note that Mr. Attar asserts that he would not have paid Mr. Frassanito had he known or believed that Credit Suisse would seek to recover the proceeds of the cheque, no more need be said in this regard for the moment.
(ii) A payment of £ 98,619.33 from the HSBC account. Mr. Attar's evidence was that this payment went to discharge a debt owed to a Mr. Abdallah, who had made an investment in GMI as a "silent partner". Their families had known one another for some 25 years; Mr. Attar had known Mr. Abdallah himself for some 17 years. The debt did not carry interest and Mr. Abdallah was not pressing for payment but the money had to be repaid sooner or later and Mr. Attar thought it right to pay, given that he had the proceeds of the cheque available. Mr. Attar would not have paid when he did had he known or believed that Credit Suisse would seek to recover the proceeds of the cheque. The payment route should be mentioned. On the 31st May, 2001, Mr. Attar transferred the funds in question from the HSBC account to his Swiss bank account with the UBS. On the 1st June, Mr. Attar withdrew Swiss Francs 249,000 in cash from the UBS and paid Mr. Abdallah in Geneva that amount in cash. Mr. Attar said that there was nothing odd about this payment; Mr. Abdallah wanted cash, UBS agreed to the cash withdrawal and he wanted to leave funds in the (Credit Suisse) account for investment. Although the funds had been transferred from their joint account at HSBC, Mrs. Attar knew nothing of this payment. She also knew nothing of the debt owed to Mr. Abdallah. Nor for that matter had Mrs. Attar ever met Mr. Abdallah, though he had invested in GMI, the Attar family company; nor had Mr. Abdallah ever visited their home. Mr. Attar said that there was nothing strange about any of this.
(iii) Credit and store card payments from the HSBC account in the total amount of £ 9,526.69. While these were sums which plainly had to be paid at some stage and arose in respect of shopping which Mr. and/or Mrs. Attar would have done in any event, Mr. Attar said that the debts would not have been paid in full or only the minimum monthly payments would have been made, had he known or believed that Credit Suisse would seek to recover the proceeds of the cheque. Self evidently, this statement could not be right with regard to the final payment under this head, an amount of £ 456.83 paid on the 20th July, 2001 and, therefore, after Mr. and Mrs. Attar were aware of the difficulties concerning the cheque. As to the other payments, these were made on the 12th and 14th June, 2001, at a time when Mrs. Attar knew nothing of the cheque at all.
(iv) A payment of £50,092.70 from the HSBC account to reduce the mortgage on Mrs. Attar's Hampton Wick property. Mr. Attar said that this was a voluntary repayment of capital; the mortgagee (HSBC) was not pressing. While the payment was obviously of benefit to Mrs. Attar (by increasing her equity in the property), it would not have been made had Mr. Attar known or believed that Credit Suisse would seek to recover the proceeds of the cheque.
(v) Payment of Euro 285,424.12 to purchase the shares: On Mr. Attar's evidence, the shares were bought on the advice of Credit Suisse. This investment was, in the event, remarkably successful. All the shares were sold, in six tranches, between 24th July and 30th October, 2001, realising in total a sum of Euro 545,251.50, a profit of some Euro 259,827.38 (amounting to some £197,712.72, using an exchange rate of Euro 1 = £0.69314). As Mr. Dale made plain, Credit Suisse did not seek to claim by way of restitution any profits earned by Mr. Attar on the transactions concerning the shares; however, in the event of a change of position defence succeeding, it was Credit Suisse's case that credit should be given for the profit in question. If need be, I shall return to that matter in due course.
(6) Discovery of the fact that the cheque had been misappropriated
66. On the 28th June, 2001, Credit Suisse was informed by employees of Paribas and Lyonnaise de Banque that the cheque had been misappropriated.
67. The background is well summarised in an undated internal memorandum prepared by Mr. Poher for the Credit Suisse management, containing a "running" diary of events and most likely completed on the 1st July 2001 ("the memorandum"):
On the 27th April ... [Mr. Attar] ... presented to us a cheque for the sum of FRF8,510,490.00. The cheque was drawn on the account of ... Carrefour, held by BNP Paribas, and was made out to the order of APGIS.
The security was sent for clearing, without anybody, it seems, having made any check of its regularity ... notwithstanding the fact that the sum of the remittance is very high ...
This cheque was finally presented for payment to BNP Paribas, and cleared on the 30th April 2001, with value date on the 7th May 2001.
On the 28th June, I was contacted in turn by BNP Paribas and Lyonnaise de Banque, which both allege a fraud with this cheque. These establishments are particularly astonished by the fact that the cheque had gone through Credit Suisse Monaco and they have asked me if we hold an account in the name of APGIS.
After checking with these two banks, it turns out that APGIS ... is .. a mutual provident society with which Carrefour insures its employees. The sum in fact corresponds to the payment of a subscription after a call for funds.
It also follows from various conversations with the representatives of these two banks that the origin of this fraud can be described in this way:
(a) Carrefour sent the cheque ... to APGIS by courier on the 12th April.
(b) On receiving the envelope, APGIS noticed that it was torn and noted the absence of the cheque.
(c) APGIS immediately informed Carrefour of the theft of the cheque.
(d) Against a letter of waiver from APGIS, Carrefour agreed to re-issue a cheque to the same sum.
(e) Although perfectly aware of the situation, Carrefour did not stop the cheque and did not lodge a complaint of theft.
(f) The cheque was finally presented for payment through our clearer, Credit Lyonnais, and was paid, as it had not been stopped.
(g) After having been debited for this operation twice, Carrefour asked to be given a copy of the cheque.
As for APGIS, it should be noted that this organisation is not implicated in this case in any way and that it now has no interest in action as it has been paid in full.
68. In summary, the ramifications for present purposes were these. The payee of the cheque was APGIS, not Mr. Apgis; the cheque was equivalent to an account payee only cheque and should not have been endorsed; the purported endorsement in favour of Mr. Attar was fraudulent; Mr. Attar was not entitled to the proceeds of the cheque.
69. I did not understand Mr. or Mrs. Attar to dispute these facts at the trial; they are in any event indisputable.
70. As to the present position between the banks in Monaco, I was informed by Mr. Dale (on instructions) that Carrefour has brought proceedings against Credit Suisse, alleging "manifest fault" in the collection of the cheque. Credit Suisse has defended the proceedings on the ground that Carrefour failed to inform it promptly of the loss of the cheque. Judgment is awaited in those proceedings.
(7) The 29th June meeting
71. Following the discovery of the misappropriation of the cheque, Credit Suisse arranged a meeting with Mr. Attar, to be held on the 29th June at the bank ("the 29th June meeting"). At this meeting, Credit Suisse was represented by Mr. Bogner, the relationship manager, Mr. Poher, the compliance officer and Mr. Spinazze, the internal auditor. A very wide gulf separates the parties' accounts of the 29th June meeting.
72. I begin with the Credit Suisse evidence. In the circumstances, Mr. Bogner's witness statement can be put to one side and I place no reliance on it.
73. Mr. Poher's account of the 29th June meeting in his oral evidence was straightforward and essentially accorded with a note he prepared within 1-3 days of the meeting and the memorandum (already referred to). It is again convenient to refer to the memorandum:
As for the client, we met him on the 29th June, with Christian Bogner and Frank Spinazze present. He asserted to us that he was nothing at all to do with this fraud and explained to us that this cheque represented payment for a commercial operation concerning a cargo of IT hardware. The purchaser, according to the client, is a certain Mr. Apgis (!) of French nationality, the director of a company established in the Democratic Republic of Congo, with delivery being made in the free zone of Limassol in Cyprus.
The client gave us a copy of Mr. Apgis' identity document which is manifestly forged and was fabricated for the circumstance.
We told the client that, on looking at the facts of the case, he could be considered a receiver of the proceeds of the theft of this cheque and, consequently, he was likely to be called to criminal account. We then told him that there was only one alternative:
(a) Either he repays us, and the funds are put in an escrow account while awaiting a decision [judgment] on the substance, thus demonstrating his good faith;
(b) Or else he refuses to repay us, and then he becomes a conscious receiver.
In both cases we said that we would have to lodge a complaint in Monaco, while stressing that, depending on the attitude he took, his situation would differ considerably.
Then the client declared to us that he was inclined to pay us these funds, but he added that he must first inform his advocate in Paris, Thierry Daou.
74. In cross-examination by Mr. Attar, Mr. Poher said that the meeting was conducted in English. Despite preferring to give evidence through an interpreter, Mr. Poher understood English well and there had been no misunderstanding. Mr. Poher was challenged on a number of aspects of his evidence. First, as to his recollection in the light of an erroneous reference in his witness statement to an interview with the Monaco police. As far as it goes, I accept that the lapse in recollection was unfortunate but it relates to a matter peripheral to the dispute here; in any event, on the central matters of Mr. Poher's evidence, he does have the support of the contemporaneous note and memorandum. No more need be said on that matter. Secondly, it was suggested that the note and memorandum were fabricated. Mr. Poher was dismissive of this allegation. Thirdly, it was put to Mr. Poher that there was no reference to criminal proceedings. Mr. Poher was adamant that there was a clear reference to such proceedings; that a complaint would be lodged, as is usual in Monaco, against persons unknown and that Mr. Attar was warned that such proceedings might have consequences for him. Fourthly, Mr. Attar disputed that the identity card was first shown to Credit Suisse at the 29th June meeting; he had shown it to Mr. Bogner at the 27th April meeting; Mr. Bogner had not remarked on it being an obvious forgery. For his part, Mr. Poher was again adamant that the identity card had been produced at the 29th June meeting; there had been a discussion about it - a discussion which he could remember very well. Mr. Attar had shown the Credit Suisse representatives a copy of the identity card "as justification". They looked at it; Mr. Spinazze copied it; they discussed it with Mr. Attar and made it clear that the card was a "crude forgery". It could be seen very clearly that the signature was not that of someone called Apgis; the signature was in the name of "Gaillard". Mr. Poher's recollection is that Mr. Attar's response was that he was not a specialist in French identity cards; he had thought it was valid when he had been shown it. Fifthly, Mr. Poher, remained clearly of the view that the explanation given at the meeting as to how Mr. Attar acquired the cheque was as set out in the memorandum; there had been no mention of Mr. Jaber, the judgment debt, Mr. Frassanito or any of the other facts forming part of Mr. Attar's explanation in these proceedings. Finally, sixthly, Mr. Poher denied that there had been any discussion of Credit Suisse looking to Mr. Attar for only 50% of the value of the cheque; instead, as recorded in the memorandum, Mr. Attar, albeit without making any offer, had said that he was inclined to pay but needed to consult his French lawyer. A further meeting was therefore necessary to consider where matters stood in the light of the legal advice which, by then, Mr. Attar would have received.
75. Mr. Spinazze's evidence largely supported Mr. Poher's. He too denied that there had been any linguistic misunderstanding. He was clear that there had been no mention of Mr. Jaber, a judgment debt or Mr. Frassanito. He was further clearly of the view that the identity card was a forgery. His evidence, however, diverged from that given by Mr. Poher in this respect; while Mr. Spinazze was certain that he had looked at the identity card and concluded that it was a forgery before making his statement, he could not recollect whether he had looked at it (and discussed it) in the course of the 29th June meeting. He thought that, on the 29th June, he had made a copy of the identity card but had looked at it later.
76. Mr. Attar's account of the 29th June meeting proceeded as follows. The account given by the Credit Suisse representatives was a fabrication. They were lying. They were all concerned as to their own positions and the risk of dismissal. The note and the memorandum were fabrications. The account given by Mr. Attar in these proceedings had been given by him to Mr. Bogner at the 27th April meeting and was repeated at the 29th June meeting. There was no mention of criminal or, indeed, civil proceedings. To the contrary, Credit Suisse was seeking his cooperation; the bank had acknowledged its responsibility in connection with the cheque, recognising, Mr. Attar recounted, that they were "in it together". Both had made mistakes with regard to the cheque. The bank had proposed a 50:50 settlement. For his part, he had agreed as an interim, provisional measure, pending the outcome of the Carrefour proceedings to pay either (1) 50% of the value of the cheque in cash or (2) to give a charge over the Mougins property, to the value of the 50% of the cheque. The bank had agreed to this in principle but had to go back to management for approval. Unfortunately, when Credit Suisse's lawyer had later written to his lawyer, the letter was in different terms; Credit Suisse had then sought payment of 100% of the value of the cheque. Mr. Attar denied that he was lying or was in any way guilty of bad faith or dishonesty; why, if he had been fraudulent, would he have left the shares with Credit Suisse?
77. Save for observing that, with regard to the 29th June meeting, there is no prospect of explaining the conflict of evidence between the parties as due to misunderstanding, I defer my conclusions for the time being.
(8) The 2nd July telephone conversation
78. In the documents, there is an internal Credit Suisse note, apparently contemporaneous, made by Mr. Poher and recording a "long (telephone) conversation" on the 2nd July, 2001, between him and Mr. Attar's French lawyers, Maitres Thierry Daou and Patrick Dijan ("the 2nd July telephone conversation"). The note includes the following:
I told them the facts briefly. They stressed Carrefour's liability for the commission of this offence. They also mentioned that the cheque was crossed ... and that, consequently, it is strange that Credit Suisse agreed to accept it for collection when the client was a different person from the beneficiary.
I replied to them that this was, at most, a civil fault, and that the main problem facing their client was of a criminal nature, that of concealing the proceeds of theft. They did not dispute this point and recognised that the best way of showing the client's good faith would certainly be for him to return us in full the sums credited after the collection of this cheque. Moreover they confirmed to me that they had advised the client to accede to our request to place [the funds] in an escrow account for the possible duration of proceedings.
... As for the escrow account, they repeated their agreement and said that it was up to us to determine the technical details with the client himself. I immediately informed Christian [Bogner] and asked him to call his client without delay. I think I understand from the report of the conversation with the client that he expressed his full agreement. It seems, however, that the client would like the sum to be placed more dynamically than in an ordinary term deposit. From the legal point of view, I do not see any disadvantage ... I suggest involving our counsel, Maitre Joelle Pastor ...
79. In his first affirmation, Mr. Attar denied that he had said or instructed his lawyers to say that he was willing to refund the full amount of the cheque. In his oral evidence, Mr. Attar appeared to go further and to deny that there had been any conversation between Mr Poher and his lawyers. He could not recall any contact between Credit Suisse and him between the 29th June and the next meeting (see below) held on the 6th July. There was a conversation, some time but it was between Ms. Pasteur and his lawyers and did not involve Mr. Poher. As for the note of the 2nd July telephone conversation, it contained false information.
(9) The 6th July meeting
80. It is common ground that a further meeting took place between Mr. Attar and representatives of Credit Suisse on the 6th July, 2001 ("the 6th July meeting"). Here, there appeared to be one or two peripheral areas of disagreement which I can at once put to one side. As it seems to me, it cannot matter whether the meeting was held in Mr. Bogner's office or in the office of Mr. de Maddelena; if it mattered, I would conclude that the meeting took place in Mr. Bogner's office. Next, there was some discussion as to whether Mr. de Maddelena was present at the meeting; insofar as it matters, which I do not think it does, I conclude that Mr. de Maddelena was not present throughout but put in a brief attendance at a late stage in the meeting. Without more ado, I turn to the substance of the meeting where there is, again, an acute conflict of evidence.
81. At this meeting too, Credit Suisse was represented by Mr. Bogner, Mr. Poher and Mr. Spinazze. Again, I pay no regard to Mr. Bogner's witness statement. It is convenient to begin with a note made by Mr. Poher, within ten days of the 6th July meeting, which reads as follows:
... The client said that he had taken advice from his advocates, Maitres Daou and Djian ... As for the demand to return the funds which Credit Suisse had made from the first interview, the client replied that he was prepared either:
(i) To have a guarantee at first call issued in favour of CSM by a bank (probably HSBC London);
(ii) To grant a mortgage of first precedence on his villa in Mougins.
These guarantees could be set up between now and the end of the month, subject to agreement between him and CSM. The client in fact made the setting up of this security conditional on a sort of contract which would be made with CSM, under the terms of which the parties would mutually agree not to take action against each other.
If such an agreement was concluded, he said he was even prepared to transfer a large sum so long as he was guaranteed that it would not be blocked. He added that he was ready, if appropriate, to convert the guarantee or the mortgage into a sum blocked in the books of CSM in the form of an escrow account.
Francois Poher then said to the client:
(a) that, as for the security offered, only the guarantee at first call might perhaps be acceptable, as for obvious reasons of lack of liquidity the mortgage would have to be rejected, and that in this case escrow remained the best solution;
(b) that, as for the agreement envisaged, it would be lacking in any force whether in criminal or in civil law.
At that time it was decided to suspend the interview immediately to allow ... Poher and ... Spinazze to report on it to ... de Maddelena. After they had briefly reported the facts and the content of the client's offer, Maitre Pastor, our counsel in Monaco, was contacted to give her advice. She confirmed that such an agreement would have no legal force and expose the establishment to criticism for a form of complicity with the client. It was therefore agreed with Maitre Pastor that she would get into direct contact with the client's lawyers to ask them to inform her of their position officially.
After this conversation, ... de Maddelena then returned to ... Bogner's office where the client still was and told him that from now on all correspondence would take place through the intermediary of our respective counsels ...
82. In his oral evidence, Mr. Poher essentially stood by this note. His practice, he said, was to take some notes during the meeting and then write up a "report" afterwards. That is what he had done here; this note as with his note of the 29th June meeting summarised the main points discussed in the meeting; it was not and did not purport to be a verbatim record. Mr. Poher accepted that during the course of the meeting many possibilities had been discussed; these included the opening of an escrow account and, at the suggestion by Mr. Attar, the possibility of creating a mortgage to the value of 50% of the cheque. Nothing was however decided or agreed; the matter was left for the lawyers to communicate, with a view to a solution by the end of the month. The "solution" related to civil proceedings; there could be no "solution" of the criminal proceedings - that was a matter which rested with the public authorities. However, if Mr. Attar reimbursed Credit Suisse in the full amount of the cheque, he need, said Mr. Poher, have no fear of criminal proceedings; that was because his exposure to criminal proceedings lay or was thought to lie with his position as a receiver of stolen property by virtue of his retaining the proceeds of the cheque after he had been informed of its misappropriation. Some days after the meeting Credit Suisse duly lodged its criminal complaint, as it had warned Mr. Attar it would. Given that there had been a fraud, Credit Suisse had no option but to take this course.
83. Mr. Spinazze gave evidence to much the same effect. The 50% point involved a proposal by Mr. Attar; it did not constitute an agreement. Matters were left with Mr. Attar to see his lawyer and revert to Credit Suisse by the end of July.
84. Mr. Attar's evidence was to now familiar effect. The note was a fabrication; the Credit Suisse employees were lying; he was not. Credit Suisse was pressing for 50% of the value of the cheque - whether by means of a guarantee, cash or any other form of security. Both Credit Suisse and he, Mr. Attar, were in it together; the 50% proposal from Credit Suisse reflected acceptance of its share of responsibility. That was right, said Mr. Attar; he had made a mistake in taking the cheque thinking it to be genuine; but the bank had made a greater mistake. Credit Suisse had not mentioned the commencement of legal proceedings. Mr. Bogner had gone out of the meeting and then returned with Mr. de Maddelena. The latter had stood by the door and said that the lawyers should do their homework on or on the basis of the 50% proposal. When, however, his lawyers received a letter from Credit Suisse's lawyers, the latter demanded 100% of the value of the cheque, not 50%, as he had thought they would in the light of the discussion at the 6th July meeting. As Mr. Attar saw it, Credit Suisse had declined his offer of interim security to the value of 50% of the cheque; the bank had then instituted a criminal complaint in Monaco and civil proceedings here; he would now leave it to this Court to rule on what, if anything, he owed to Credit Suisse.
85. In the event, no amicable solution was achieved between Credit Suisse and Mr. and Mrs. Attar. In August 2001, these proceedings were commenced. Beyond such matters as have already been mentioned, it is unnecessary to recount the procedural history which followed. It is, however, of some interest to note that in another "call report", this time dated 14th August, 2001 and thus very shortly after the commencement of these proceedings and the grant of the freezing order, there is the first documentary reference to a proposal from Mr. Attar. If the call report is accurate, which Mr. Attar disputes, the offer was to pay 50% of the value of the cheque then and to pay the balance within three months. There is no dispute that in fact no such payments have been made.
(10) Monegasque law
86. As already noted, Credit Suisse called Mr. Canac, who gave uncontradicted evidence on Monegasque law. A short summary of Mr. Canac's evidence will suffice:
(i) The principle of "good faith" was applicable to all contracts governed by Monegasque law.
(ii) By virtue of Art. 1223 of the Monegasque Civil Code, a recipient of property to which he is not entitled is unjustly enriched and is obliged to repay or return that property to the person from whom he receives it, regardless of the recipient's good faith. It follows that, at least for present purposes, liability in quasi-contract for restitution under Monegasque law is strict and is not fault based.
(iii) When a person receives property in the honest belief that he is entitled to it and thereafter becomes aware that he is not so entitled, he comes under an obligation to repay or return that property. If in such circumstances he does not do so, he may be exposed to criminal penalties.
(iv) Negligence on the part of the payer is no defence to a claim for restitution against the payee. Nor does it give rise to a right of set off or to counterclaim. Such negligence may expose the payer to other claims but is irrelevant to the position of a payee not entitled to the property in question. Liability in negligence is not to be confused with liability in restitution.
(v) In Monegasque law, there is no defence of change of position to a civil claim for restitution; the fact that a recipient has parted with the property in good faith is only of relevance in criminal proceedings.
THE RIVAL CASES IN OUTLINE
87. Mr. Dale advanced the Credit Suisse case under two main headings: (1) Restitution; (2) Damages and an indemnity.
88. The claim in restitution was brought against Mr. Attar, for the entire amount of the proceeds of the cheque plus interest and against Mrs. Attar in the sum of the £525,000 transferred to the HSBC account, again plus interest. In each case, the claim was unanswerable. Mr. and Mrs. Attar had received the proceeds in question, to which they were not entitled. The law governing the receipt of the proceeds of the cheque was, as Mr. and Mrs. Attar had themselves contended, Monegasque law. But Monegasque law disclosed no defence to the claim; good faith (if such there was) on the part of Mr. and/or Mrs. Attar was irrelevant; negligence on the part of Credit Suisse was likewise irrelevant; there was no change of position defence. If and insofar as English law was applicable (contrary to the common ground hitherto), then a change of position defence of course formed part of English law; however, on the facts it did not assist either Mr. or Mrs. Attar here.
89. The Credit Suisse claim for damages and an indemnity was brought against Mr. Attar only. Here Credit Suisse alleged bad faith; in other words, dishonesty. As an account holder, Mr. Attar owed Credit Suisse a duty of good faith. For Credit Suisse to succeed on this claim, it was not necessary to determine the precise role played by Mr. Attar in respect of the fraud concerning the cheque; that said, he had acted in bad faith throughout. He had made a number of false representations when he opened the account. His explanation of how he came to acquire the cheque defied belief; it was incredible and false. Alternatively, if that explanation was true, any innocent third party would have been put on inquiry. Mr. Attar's own account of events (if true) showed that he did entertain suspicions as to the provenance of the cheque; but if he did not, it was only because he shut his eyes to suspicion of the truth. Mr. Attar's evidence that he had told messrs. Bogner, Poher and Spinazze the same story as to the circumstances in which he had obtained the cheque as the version which he presented to the Court was untrue. Instead, the Court should accept the account of the 27th April, 29th June and 6th July meetings as given in the evidence of the Credit Suisse witnesses. Mr. Attar's allegations of fabrications on the part of these witnesses were wild and unfounded. The manner in which Mr. Attar withdrew cash in instalments was surreptitious and bore the hallmark of dishonesty.
90. The case for Mr. and Mrs. Attar proceeded as follows. As to restitution, Credit Suisse's fault in processing the cheque was greater than any fault of Mr. Attar in innocently taking the cheque. By the time Credit Suisse notified Mr. Attar of the fact that the cheque had been misappropriated, a variety of payments had been made which would not have been made had Mr. Attar known or believed that Credit Suisse would seek to recover the proceeds of the cheque; in other words, Mr. and Mrs. Attar had changed their position.
91. As to the claim for damages and an indemnity, Mr. Attar denied dishonesty throughout. The Credit Suisse case had relied on Mr. Bogner and was weakened by his absence. No false representations were made when Mr. Attar opened the account. Mr. Attar had been cheated twice by Mr. Jaber; first, as regards the failure to pay for the goods supplied; secondly, with regard to the cheque. As to the acquisition of the cheque, he had believed Mr. Jaber and Mr. Apgis. He had not realised that the endorsement of the cheque was a forgery. He, Mr. Attar could hardly be criticised for this, given the manner in which three major European banks had dealt with the cheque. He had not realised that the identity card was a forgery. He had told the whole story and produced the identity card to Mr. Bogner. He had not thought that there was anything obviously wrong with the identity card and had proceeded to have the cheque processed despite its non-endorsable nature. Mr. Attar had told the same story to messrs. Poher and Spinazze at the 29th June meeting. They had sought his cooperation; they recognised the bank's responsibility and that Credit Suisse and Mr. Attar were "in it together". No mention was made of criminal or any legal proceedings. Both then and at the 6th July meeting, Credit Suisse had proposed a 50:50 solution. But the bank had then changed its mind and demanded 100%. Mr. Attar had never stated that he would willingly refund 100% of the value of the cheque; nor had he instructed his legal representatives to make any such offer. The Credit Suisse witnesses had lied in their evidence and fabricated the various notes and the memorandum; they were concerned as to their own positions.
THE CLAIM IN RESTITUTION
92. Having set out the facts and rival contentions at some length, my conclusions and the reasons for them can be relatively shortly stated. I begin with the claim in restitution.
(I) Mr. Attar
93. It is indisputable that Mr. Attar received the proceeds of the cheque in Monaco when they were credited to the account, that the cheque had been misappropriated and that Mr. Attar was not entitled to those proceeds. It is common ground and plainly right that Monegasque law applies to the claim in restitution against Mr. Attar. I accept the unchallenged evidence of Mr. Canac that liability under Monegasque law in quasi-contract for restitution is strict and that there is no defence of change of position; furthermore, that negligence, if any, on the part of Credit Suisse would not afford Mr. Attar a defence to this claim. It follows that Mr. Attar has no defence to Credit Suisse's claim for restitution of the proceeds of the cheque; this claim accordingly succeeds in full.
94. As to ancillary matters:
(i) Subject to any argument which Mr. Attar may choose to advance when the judgment is handed down, I am minded to accept the basis for the calculation of interest as set out in the Third Witness Statement of Ms. Reynolds (dated 21st January, 2004). The precise calculation will of course depend on the date when the judgment is handed down.
(ii) As foreshadowed at the hearing, I shall be grateful for Mr. Dale's assistance with the form of the order, with particular regard to the position arrived at in the Carrefour-Credit Suisse litigation in Monaco.
(II) Mrs. Attar
95. As already explained, the claim here is in respect of the £525,000 part proceeds of the cheque, transferred into the (joint) HSBC account in London.
96. Monegasque law: Mrs. Attar's position under Monegasque law, if it applies, is the same as Mr. Attar's; she has no defence and the claim must succeed.
97. English law: As already mentioned, notwithstanding the common ground between the parties as to the application of Monegasque law, it did seem fair to Mrs. Attar to address the impact of English law, should it apply. First, because it is unclear to me whether Monegasque or English law should be applicable to this claim: see Dicey & Morris (13th ed.), vol. 2, at p.1485 and paras. 34-029, 34-036 and 34-037. Secondly, because English law does have the defence of change of position whereas Monegasque law does not. In the event, however, it is unnecessary to resolve the issue as to which law applies. Even if English law is properly applicable, I am satisfied that, in the circumstances of this case, the defence of change of position does not assist Mrs. Attar. Accordingly, the result of the application of English law is the same as that arrived at under Monegasque law: Mrs. Attar has no defence to this claim.
98. My reasons for saying that Mrs. Attar is not assisted by the defence of change of position are these:
(i) In the present context, the defence of change of position can be shortly summarised as requiring some causal link between the mistaken receipt of the overpayment and the recipient's change of position, which makes it inequitable for the recipient to be required to make restitution: Scottish Equitable plc v. Derby [2001] EWCA 369 [2001] 3 All ER 818. It is apparent that the change of position must be bona fide; otherwise there will be no injustice in requiring the recipient to repay: see, per Lord Goff in Lipkin Gorman v. Karpnale Ltd. [1991] 2 AC 548, at p. 579. Further, it is to be underlined that, as Lord Goff said, ibid, at p.580:
... the mere fact that the defendant has spent the money, in whole or in part, does not of itself render it inequitable that he should be called upon to repay, because the expenditure might in any event have been incurred by him in the ordinary course of things.
Still further, it will in general not be a detriment to pay off a debt which will have to be paid off sooner or later, at least unless the debt related to a long-term loan on advantageous terms when the position might be different: Scottish Equitable, supra, at [35], per Robert Walker LJ (as he then was). Finally, negligence on the part of the payer does not preclude recovery of the money mistakenly paid: ibid, at [19] - [25]. When these principles are applied to the facts of the present case, there are insuperable obstacles preventing Mrs. Attar from taking advantage of the defence of change of position.
(ii) To begin with, as already recorded, Mrs. Attar chose not to give evidence. The only evidence as to her state of mind came from Mr. Attar. According to his evidence, Mrs. Attar knew nothing of the cheque until after the 28th June, 2001, by which time it was known that there were difficulties in connection with it. Assuming that evidence to be true, it follows so far as Mrs. Attar is concerned and if her position is considered separately from that of Mr. Attar, that there is simply no causal link between the mistaken receipt of the cheque and any change of position on her part. For my part, I see no reason to question Mr. Attar's evidence on this point. Accordingly, there is a fatal objection to any change of position defence being advanced by Mrs. Attar; any such defence would be doomed to fail at the first hurdle, by reason of the absence of a causal link.
(iii) Turning to the individual items in respect of which the defence was maintained (and leaving to one side the absence of a causal link), it is convenient to begin with the credit and store card payments in the amount of £9,526.69. The defence of change of position is not available here because: (1) on the evidence, the expenditure would have been incurred in any event in the ordinary course of things; (2) as to the payment of £456.83 made on the 20th July, by then both Mr. and Mrs. Attar were aware of the difficulties concerning the cheque.
(iv) With regard to the payment of £50,092.70 to reduce the mortgage on Mrs. Attar's Hampton Wick property, there is no or no relevant change of position. First, Mrs. Attar has increased equity to the same value in the property. Secondly, the debt would have to be paid off sooner or later and there was no evidence that the mortgage was on advantageous terms of any description.
(v) No question of any change of position defence arises in connection with the expenditure of money to purchase the shares, given, as already described, the eminently successful nature of this investment.
(vi) What remains are the payments from the HSBC account of FF1 million to Mr. Frassanito and of £98,619.33 to Mr. Abdallah. First, Mrs. Attar, on the evidence, quite apart from knowing nothing of the cheque, knew nothing of these payments; accordingly, the necessary causal link cannot be established on this additional ground. That, really is an end to the matter. For completeness, however, secondly and as will be recollected, any change of position must be bona fide. In respect of these payments from their joint account and assuming that they were in fact made by Mr. Attar, I accept Mr. Dale's submission: namely, Mrs. Attar cannot avail herself of the defence of change of position unless Mr. Attar was acting in good faith. It follows that even if (contrary to my view) Mrs. Attar was right thus far, the question of whether she might have a defence in respect of these payments hinges further on the outcome of Credit Suisse's allegations of bad faith against Mr. Attar. Academic though it is, I therefore leave this point on restitution open until I have considered and determined Credit Suisse's case of bad faith/dishonesty against Mr. Attar.
BAD FAITH /DISHONESTY
(1) Preliminary matters
99. Determining these allegations: Given my conclusion that Credit Suisse's restitutionary claim succeeds in full, I did pause to consider whether it was appropriate to rule on the allegations of bad faith/dishonesty advanced under this heading. Having reflected, it seems both right and unavoidable that I should determine these allegations. First, because these allegations were fully debated at the trial. Secondly, because it is only if this case succeeds that Credit Suisse could be entitled in principle to an indemnity in respect of all losses sustained and/or incurred by it in relation to the cheque (for example, costs incurred in the Carrefour litigation in Monaco). Thirdly, because serious allegations, essentially of fraud, should not be left in limbo; they have been raised; they should be decided, one way or another. I therefore proceed to deal with this part of the Credit Suisse claim.
100. Mr. Attar's duty of good faith: There was no or no serious dispute that Mr. Attar did owe Credit Suisse a duty of good faith. As to the source of that duty, it arose out of the contractual relationship into which he entered with Credit Suisse upon opening the account. The contractual relationship was itself governed by Monegasque law and, in accordance with Mr. Canac's unchallenged evidence, was subject to the principle of good faith.
101. Knowledge and dishonesty: In argument, bad faith was treated as synonymous with dishonesty. The nub of the allegation was that Mr. Attar had behaved in bad faith (i.e., dishonestly) in presenting the cheque to Credit Suisse for payment. Plainly, if Mr. Attar had actual knowledge that he should not be presenting the cheque for payment, that would amount to dishonesty. For present purposes, in my view, the case of dishonesty would likewise be made good if Mr. Attar had "blind-eye knowledge" that he should not be presenting the cheque for payment; such blind-eye knowledge is equivalent to actual knowledge.
102. The question of "blind-eye knowledge" was considered by the House of Lords in Manifest Shipping Co v. Uni-Polaris Shipping Co [2001] UKHL 1 [2001] 2 WLR 170, in the context of s.39(5) of the Marine Insurance Act 1906 concerning the sending of a ship to sea in an unseaworthy state "with the privity of the assured". At [3], Lord Clyde said this:
Blind-eye knowledge ... requires a conscious reason for blinding the eye. There must be at least a suspicion of a truth about which you do not want to know and which you refuse to investigate.
Lord Hobhouse approached the matter as follows:
25. ... The illuminating question therefore becomes "why did he not inquire?" If the judge is satisfied that it was because he did not want to know for certain, then a finding of privity should be made. If, on the other hand, he did not inquire because he was too lazy or he was grossly negligent or believed that there was nothing wrong, then privity has not been made out ...
26. ... If the shipowner deliberately refrains from examining the ship in order not to gain direct knowledge of what he has reason to believe is her unseaworthy state, he is privy to the ship putting to sea in that unseaworthy state.
At [116], Lord Scott of Foscote put it this way:
In summary, blind-eye knowledge requires ... a suspicion that the relevant facts do exist and a deliberate decision to avoid confirming that they exist. But a warning should be sounded. Suspicion is a word that can be used to describe a state-of-mind that may, at one extreme, be no more than a vague feeling of unease and, at the other extreme, reflect a firm belief in the existence of the relevant facts. ... in order for there to be blind-eye knowledge, the suspicion must be firmly grounded and targeted on specific facts. The deliberate decision must be a decision to avoid obtaining confirmation of facts in whose existence the individual has good reason to believe. To allow blind-eye knowledge to be constituted by a decision not to enquire into untargeted or speculative suspicion would be to allow negligence, albeit gross, to be the basis of a finding of privity.
Though the context is very far removed from that of the present case, these statements of principle are nonetheless of the greatest assistance here; on the question of blind-eye knowledge, I direct myself in accordance with them.
103. The standard of proof: Under this heading, Credit Suisse advances serious allegations against Mr. Attar. Plainly, the burden is on Credit Suisse to prove its case. The applicable standard of proof is a balance of probability. Its application in a case such as this was authoritatively explained by Lord Nicholls in In re H [1996] AC 563, at p. 586:
... the standard of proof required in non-criminal proceedings is the preponderance of probability, usually referred to as the balance of probability. This is the established general principle ...
The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence ... Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation.
Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established ...
104. Mr. Attar's role: Mr. Dale submitted - and I agree - that for Credit Suisse to succeed on this aspect of the case, it is not necessary to establish the precise role played by Mr. Attar in respect of the fraud relating to the cheque. It suffices if Credit Suisse proves to the requisite standard of proof (as already explained) that Mr. Attar was dishonest in his dealings with the bank in connection with the cheque.
(2) Obtaining the cheque
105. I have earlier set out Mr. Attar's account of the circumstances in which he obtained the cheque. This account includes a number of striking features; in summary:
(i) Mr. Jaber contacted Mr. Attar in 1991 out of the blue; there had been no contact of any description for some nine years, since 1982.
(ii) Mr. Jaber made no attempt to negotiate on the payment to be made to Mr. Attar, with a view to obtaining some or any discount.
(iii) To the contrary, though the Lebanese judgment for US$266,000 had said nothing about interest, Mr. Jaber offered to pay interest on the debt. Indeed, the offer of Mr. Jaber to pay US$910,000 included an offer of 20% interest per annum. Even if this could be explained by reference to Lebanese lending rates (rather than the judgment debt rate of 9% per annum), simple interest at 20% per annum would (as already outlined) only have taken the principal figure from US$266,000 to US$745,000. To explain the movement from US$266,000 to US$910,000, it was necessary to convert the judgment debt into Lebanese Lira, apply a 20% rate of interest and then convert the total figure into FF.
(iv) The cheque would be handed over to Mr. Attar by an associate of Mr. Jaber, a Mr. Apgis, a man Mr. Attar had never previously met.
(v) The cheque, when handed over would be for an amount in excess of the agreed amount, by some FF2 million. After the cheque had been collected and the proceeds had been credited to his account, Mr. Attar was to pay the difference to an Italian gentleman, also previously unknown to Mr. Attar.
(vi) The arrangements for handing over the cheque to Mr. Attar were made on the telephone; these involved him going to meet Mr. Jaber's associate, outside the railway station in San Remo.
(vii) The cheque was not made out to Mr. Attar; it had to be endorsed over to him.
(viii) Mr. Attar asked for a copy of the identity card.
106. I saw and heard Mr. Attar give evidence. If I may say so, he conducted himself throughout the trial with courtesy and considerable charm. Nonetheless, I regret to say that I am unable to accept the truthfulness of this account. It is incredible and defies belief. It is possible that one or two of the circumstances could have been truthful; but not the account as a whole. The suggestion is wholly implausible that a recalcitrant judgment debtor - even one anxious to have a criminal penalty annulled - suddenly emerged after 8-9 years of silence, making an offer of the generosity already summarised, involving the payment by way of a cheque to a third party, for a sum greater than even the debt plus a liberal topping of interest, to be handed over in the circumstances described. This is fantasy or fanciful. Elaboration is hardly necessary. Mr. Attar cannot be mistaken. His evidence on this central matter must therefore be knowingly false. Taking fully into account the seriousness of the allegation and applying the standard of proof as explained in In re H (supra), I find Mr. Attar's evidence to be improbable. His was not an honest account of the events in question. He must have come by the cheque in some different way, which even now he has not disclosed. The inference is therefore irresistible that Mr. Attar knew something of the fraud concerning the cheque, enough, at the very least, to know that he was not entitled to the cheque or its proceeds and that he should not be presenting it to Credit Suisse for collection.
107. Let it be assumed, however, that the conclusion to which I have come as to the falsity of Mr. Attar's account is unduly harsh and mistaken and that his account is true in its essential particulars. If so, then, inescapably in my judgment, he had at the time blind-eye knowledge that there was something gravely wrong with the cheque he was receiving. No innocent third party, let alone an experienced businessman such as Mr. Attar, could have obtained a cheque for the amount and in the circumstances in question and not have entertained very real suspicions as to the provenance of the cheque. The facts (if true) reeked of money laundering, fraud or both. The arrangements made were clandestine and extraordinary. Mr. Attar denied that he had any suspicions. I reject this denial. If he did not make inquiries as to the provenance of the cheque it was not because of mere laziness or negligence; it was instead because he held a very real suspicion that such inquiries would have revealed the fraud relating to the cheque; he shut his eyes and asked no questions to avoid obtaining certain knowledge of that fraud.
108. It remains to deal with the copy letters from Mr. El-Mir (the Lebanese lawyer). No originals were available; that may be because, as Mr. Attar said, they had been liened by his erstwhile solicitors. Be that as it may, all I have to go on are the copies. Mr. Dale submitted that they did not ring true; I agree. They are stilted and unqualified. In my judgment, even assuming that the letters are genuine, no honest lawyer in Mr. El-Mir's position could have written them unless given wholly inadequate or misleading instructions. That is sufficient to dispose of the letters. It may be that Mr. El-Mir could have shed some light on the letters but no evidence was adduced from him. As will be recollected, Mr. Attar said that he could not afford to bring Mr. El-Mir to London; being a layman he had not thought of obtaining a statement from Mr. El-Mir or had been deterred by Credit Suisse's solicitors from doing so. I express no conclusion on whether Mr. Attar could have paid for Mr. El-Mir to attend to give oral evidence; I reject Mr. Attar's explanation for not producing a statement from Mr. El-Mir as untrue. Mr. Attar (and for that matter, Mrs. Attar) had a perfectly good grasp of the substance of these proceedings. Nor was Mr. Attar readily dissuaded from any course in the litigation that he was minded to follow. Natural instinct would have told Mr. Attar that, at the least, a statement from Mr. El-Mir would be important and helpful. The reason there was no such statement is that Mr. El-Mir had no truthful evidence to give which would assist Mr. Attar's case. The only realistic alternative is that the letters were not genuine at all - but it is unnecessary to explore that possibility further.
109. These conclusions are probably sufficient to decide the question of bad faith/ dishonesty against Mr. Attar and in favour of Credit Suisse. For it follows that when Mr. Attar presented the cheque to Credit Suisse he knew that the cheque had been the subject of a fraud and was one to which he was not entitled, or he had equivalent blind-eye knowledge thereof. Plainly he should not have presented it to Credit Suisse for payment. Doing so, involved a breach of his duty of good faith. The matter does not however end there. In a variety of other respects, I conclude that Mr. Attar's evidence has been untruthful; such conclusions serve to reinforce those to which I have already come.
(3) The 29th June meeting, the 2nd July telephone conversation and the 6th July meeting
110. Logically, the next matter to be considered ought to have been the presentation of the cheque at the 27th April meeting. But as that meeting was attended only by Mr. Attar and the absent Mr. Bogner, it is convenient to defer it for the moment and to consider first the 29th June meeting, the 2nd July telephone conversation, the 6th July meeting and Mr. Attar's (alleged) payments to Mr. Frassanito.
111. As already described, the 29th June and 6th July meetings have given rise to an acute conflict of evidence between Mr. Attar on the one hand and Messrs. Poher and Spinazze on the other, even putting Mr. Bogner's witness statement to one side; moreover, the gulf between these accounts cannot be bridged or explained by innocent misunderstanding. Regrettably, one or other account must be knowingly untruthful. After careful consideration, I have no hesitation in rejecting Mr. Attar's account and in preferring that given by Messrs. Poher and Spinazze. My reasons follow.
112. The contemporaneous documents: First, Mr. Poher's version of events, largely supported by Mr. Spinazze (a matter to which I shall return) accords with the contemporaneous documentation. Mr. Attar's version of events does not. In the case of the 29th June meeting, there is the memorandum and Mr. Poher's note. As to the 2nd July telephone conversation, Mr. Poher was a party to it, whereas Mr. Attar was not; there is an apparently contemporaneous note which supports Mr. Poher's account of it; that account is consistent with Mr. Poher's account of the 29th June meeting. Turning to the 6th July meeting, Mr. Poher's evidence here too is supported by at least a relatively contemporaneous note. Mr. Attar's robust response was that the Credit Suisse employees were all lying; the notes were fabrications; they were concerned to save their own jobs.
113. I am quite unable to accept Mr. Attar's allegations in this regard. These are serious allegations, if I may say so, wildly made. There is no objective basis for them. Whatever might be said of the sensitivity or vulnerability of Mr. Bogner's position, the same cannot be said in respect of Messrs. Poher and Spinazze. Mr. Poher was the in-house counsel and compliance officer. Mr. Spinazze's responsibility was internal audit. Neither had been at all involved in any prior dealings between Mr. Bogner and Mr. Attar. The foundation of Mr. Attar's charges therefore goes. I am satisfied that the contemporaneous records were not fabricated. Messrs. Poher and Spinazze had no reason and no motive to fabricate anything. Bearing in mind that these were summaries rather than verbatim records, they furnish a generally reliable account of what transpired at the 29th June and 6th July meetings, albeit with the flavour which comes from the maker of these documents (Mr. Poher) seeing events from the Credit Suisse perspective.
114. The explanation given by Mr. Attar as to how he obtained the cheque and its ramifications: As recorded by the memorandum, Mr. Attar's explanation as to how he obtained the cheque was as follows:
... [Mr. Attar] asserted to us that he was nothing at all to do with this fraud and explained to us that this cheque represented payment for a commercial operation concerning a cargo of IT hardware. The purchaser, according to the client, is a certain Mr. Apgis(!) of French nationality ...
For his part, Mr. Attar said in evidence that he gave the same explanation at the 29th June meeting as he had given to Mr. Bogner alone on the 27th April; namely, he told the bankers his version of events as given in evidence at the trial. Once the suggestion of fabrication is discarded, I regard it as inconceivable that any banker could have failed to take the most careful note of the account which Mr. Attar has maintained in his evidence; not least, any banker would have been sceptical and alarmed in, I suspect, equal measure. I therefore have no doubt in my mind that the explanation recorded in the memorandum accurately records the essence of what Mr. Attar told Credit Suisse at the 29th June meeting.
115. It follows that at the 29th June meeting, immediately after the "balloon had gone up" in respect of the cheque, Mr. Attar gave Credit Suisse a materially different explanation as to how he acquired it from that which he has asserted in Court. I do not see how this difference can be innocently explained. I am accordingly satisfied that on the 29th June, Mr. Attar knowingly gave Credit Suisse a false explanation as to his acquisition of the cheque. Why did he do so? The inference is unavoidable that he did so because, either he was himself complicit in the fraud in some way or, at the very least, he had blind-eye knowledge as to the cheque's unsatisfactory provenance. The giving of this false explanation therefore reinforces the conclusions to which I have earlier come, based at that stage solely on Mr. Attar's explanation of how he came by the cheque.
116. The identity card: I come next to the identity card. Here, in fairness to Mr. Attar, it is to be noted that Mr. Spinazze's recollection differed from that of Mr. Poher. It will be recalled that Mr. Poher said that the Credit Suisse representatives pointed out to Mr. Attar at the 29th June meeting that the identity card was a "crude forgery". Mr. Spinazze remembered being given the identity card but did not recall discussing it at that meeting and thought that he studied it later. The memorandum, while clear that the identity card was handed over at the meeting may not be conclusive as to when the forgery was discovered. That said, Mr. Poher's meeting note strongly supports his oral evidence, including as it does, the following passage:
At this stage of the discussion, the client showed us the copy of the ID card of the so-called Apgis. He pointed out that the latter had handed over this copy to account for his identity.
A rapid scrutiny of the document brought us to conclude that the ID card was forged and we advised the client about our feelings. He just replied that he did not know what a forged ID card was.
117. In my judgment, had it stood alone, I would not have thought of criticising Mr. Attar for failing to note that the signature on the identity card was not that of someone called "Apgis"; in these circumstances, it does not seem to me to matter whether Credit Suisse noticed the mis-matching signature at once or only after reflection. I therefore reach no firm conclusion on the one area where Mr. Poher's evidence differed from Mr. Spinazze's, though my inclination is to prefer Mr. Poher's account, supported as it is by his note. Moreover, the summary in the note is so inherently probable that it encourages confidence in the note's reliability.
118. More importantly, both Mr. Poher and Mr. Spinazze plainly recollect having been given the identity card at the 29th June meeting. That recollection is directly supported by the contemporaneous memorandum and Mr. Poher's note. I accept Mr. Poher's and Mr. Spinazze's evidence in this regard. Two consequences follow. First, this conclusion serves to undermine Mr. Attar's evidence that he had handed over the identity card to Mr. Bogner at the 27th April meeting, a matter to which I shall return. Secondly, the fact that Mr. Attar thought it appropriate to obtain a copy of the identity card and to produce it to Credit Suisse, suggests to me that he too had suspicions as to the cheque, contrary to his denials in evidence. I am unable to accept his explanation that he acquired the identity card to assist Credit Suisse with its due diligence. He obtained the identity card because he realised that sooner or later he might be called upon to justify or excuse his acquisition of the cheque. That the identity card, upon proper examination, was hopelessly inadequate for the purpose of lulling suspicion is neither here nor there. This conclusion too supports those to which I have already come as to the untruthfulness of Mr. Attar's account of events.
119. Other matters: At the trial there was considerable debate concerning other matters discussed at the two meetings and during the telephone conversation in question. Very largely this was a debate as to who had proposed what to whom in order to resolve the matter, whether Credit Suisse was minded to seek a refund of only 50% of the proceeds of the cheque and whether Credit Suisse had mentioned that proceedings (criminal and civil) would shortly be commenced. Ultimately, none of this matters and I can take it summarily. The highest Mr. Attar's case could be put was that he was disappointed with the conduct of Credit Suisse; no question of any estoppel arises. For my part, having heard the respective witnesses and read the documents in question, I am minded to prefer the Credit Suisse evidence here to that given by Mr. Attar, save that I suspect that the tone of the meetings may have been more conciliatory than the Credit Suisse memorandum and notes would suggest. The probabilities must be that, in the first instance at least, Credit Suisse would have sought Mr. Attar's assistance in resolving an embarrassment. But that can have no bearing on the issues which now fall to be resolved.
120. Summary: Pulling the threads together, in significant respects going to (i) Mr. Attar's false explanation as to his acquisition of the cheque and (ii) the production of the identity card, the evidence, in particular from the 29th June meeting, reinforces the conclusions to which I have already come as to Mr. Attar's bad faith in connection with his acquisition of the cheque.
(4) Paying Mr. Frassanito
121. I have already set out at some length Mr. Attar's evidence concerning his alleged payments to Mr. Frassanito; Credit Suisse does not of course admit that Mr. Frassanito exists or that Mr. Attar paid him at all. If Mr. Attar did not make the payments in question to Mr. Frassanito, then plainly his evidence will have been untruthful in that regard - and deliberately so, there again being no possibility of mistake.
122. I therefore proceed to consider this topic on the assumption in favour of Mr. Attar that he did make the payments to Mr. Frassanito in accordance with his version of events. On this hypothesis, however, I cannot avoid the conclusion that, as Credit Suisse's written Closing Submissions put it:
... Mr. Attar was participating in a fraud on Credit Suisse by this surreptitious withdrawal of cash in variable amounts so as not to bring too much attention to what was occurring.
In a nutshell, Mr. Attar's explanation of these events defies belief. His acts were not those of a man acting in good faith.
123. My reasons are these:
(i) If both Mr. Attar and Mr. Frassanito had been acting in good faith, there would have been no reason for cash withdrawals, let alone in variable amounts. Mr. Attar had sufficient funds in the account to have arranged a simple bank transfer of the entirety of the sums owed to Mr. Frassanito and thereby to have satisfied Mr. Frassanito's request for payment of a single lump sum.
(ii) I accept Mr. Poher's evidence that there was no bank rule limiting the amount of cash withdrawals and that Mr. Attar's withdrawals were not "very high" with reference to the ordinary operations of the branch. I do not accept Mr. Attar's evidence that there were any restrictions on his withdrawing whatever cash sum he wanted from the branch on any particular day.
(iii) If there was a problem with cash withdrawals on any particular day, then I cannot understand how Mr. Bogner could have known in advance what cash would be available on subsequent days.
(iv) If, however, Mr. Bogner was able to plan for future withdrawals, then it made no sense for Mr. Attar to return to the branch on repeated occasions and still less for Mr. Frassanito to accompany him; all that was needed was for Mr. Attar to arrange with Mr. Bogner for the full amount to be available on a particular day.
(v) In his evidence Mr. Attar distinctly stated that Mr. Frassanito had become frustrated waiting for the outstanding cash on the 22nd May and therefore Mr. Attar had arranged for the SWIFT transfer of the remaining FF1 million due to Mr. Frassanito. Confronted with the fact that he had given instructions for the SWIFT transfer on the 21st May (i.e. the day before Mr. Frassanito had become frustrated), Mr. Attar said that he may have made a mistake as to the precise dates. In this context, I regard that explanation as improbable. Mr. Frassanito's frustration was said to be linked to the news from the bank on the 22nd May that there would be a long wait for the remaining FF1 million to be available. There was no visit to the branch on the 21st May; indeed the last visit had been on the 14th May. I think instead that at this stage in his evidence, Mr. Attar was unfortunately saying whatever he thought most convenient at the time, in an effort to salvage an untenable explanation.
(vi) In summary, I conclude that Mr. Attar was making repeated, variable cash withdrawals from the account so as to stay under the monitoring limit of Euro100,000, in order to avoid attention being drawn to these transfers. The separate transfer of the FF1 million from the HSBC account was likewise made with a view to obscuring the full extent of the payments made to Mr. Frassanito. Finally in this regard, it is noteworthy that the Credit Suisse call report of the 22nd May records Mr. Attar's explanation for these cash withdrawals as being renovations at the Mougins property; I have no reason to doubt that the call report accurately recorded what Mr. Attar was saying to Credit Suisse; that his explanation was untrue lends confirmation to the view which I have formed as to Mr. Attar's dishonest conduct with regard to these cash withdrawals.
(5) Mr. Attar and Mr. Bogner: the 27th April meeting and the customer profile
124. So far, as will be apparent, none of my conclusions have rested on Mr. Bogner's statement evidence; that evidence has been put to one side. I must now return to those disputed matters which involve (always subject to the burden of proof) rival evidence given by Mr. Attar and Mr. Bogner, with no one else present. It is convenient to take these matters in reverse chronological order.
125. The 27th April meeting: This, it will be recollected, was the meeting at which Mr. Attar presented the cheque for collection. Subject only to Mr. Bogner's note of the 7th June, itself in any event too late to be of any real assistance, no contemporaneous documents assist.
126. Had matters rested with Mr. Bogner's statement evidence alone, difficult questions might have arisen as to whether Credit Suisse satisfied the standard of proof set out in In re H (supra) in respect of this meeting. It could here be said with justification that Mr. Bogner had his own interests to protect; in the aftermath of the debacle concerning the cheque, Credit Suisse was bound to be asking awkward questions of him, if only as Mr. Attar's relationship manager. But matters do not rest with Mr. Bogner's statement evidence alone. Evidence relating to the 29th June meeting has, in my judgment, a direct bearing on whom to believe in connection with the 27th April meeting. On the basis of that evidence and bearing fully in mind the seriousness of the allegations against Mr. Attar, I am satisfied that Mr. Bogner's account of the 27th April meeting is to be accepted and that Mr. Attar's account must be rejected
127. The evidence in question may be summarised as follows:
(i) I have already held that the account presented by Mr. Attar to Mr. Poher and Mr. Spinazze at the 29th June meeting of how he acquired the cheque was not that which he presented to the Court in his evidence. Mr. Attar does not say - and indeed it would be impossible to credit it if he did - that he told Mr. Bogner one thing on the 27th April and told Messrs. Bogner, Poher and Spinazze another on the 29th June. Mr. Attar says that he gave Mr. Bogner the same account on the 27th April as that which he gave at the meeting on the 29th June and that which he gave in evidence. Having disbelieved him in respect of the 29th June meeting, I am unable to accept his account of the 27th April meeting. The evidence from Mr. Poher and Mr. Spinazze therefore serves to dispel such doubt as I might have entertained relating to Mr. Bogner's evidence had it stood alone. Thus reassured, I should add this. Much as I regarded it as inconceivable that Messrs. Poher and Spinazze would have failed to remark on Mr. Attar's account of events had it accorded with that which he gave in evidence, so I regard it as inconceivable that Mr. Bogner (presented with that account) would have pronounced himself satisfied with the cheque without further inquiries. Faced with the tale told by Mr. Attar in evidence, the most supine banker could not have failed to wish to institute further inquiries. Upon reflection, the only circumstances in which it is conceivable that Mr. Bogner would not have been alarmed, would involve him being complicit in a fraud relating to the cheque; as already remarked, neither Credit Suisse nor Mr. Attar allege that he was.
(ii) An important point of difference between Mr. Attar's and Mr. Bogner's evidence concerning the 27th April meeting goes to whether Mr. Attar showed Mr. Bogner the identity card at that meeting. Again, my conclusions as to the 29th June meeting are relevant. I have already indicated that I accept Mr. Poher's and Mr. Spinazze's evidence that the identity card was presented at that meeting. I am therefore unable to accept that Mr. Attar handed over the identity card at the 27th April meeting. For completeness, nowhere did Mr. Attar say that he presented the identity card on both occasions. It follows that on this point too, I am driven to preferring Mr. Bogner's evidence (with all its frailties) to that of Mr. Attar.
128. It follows that when presenting the cheque to Credit Suisse for collection, Mr. Attar gave Credit Suisse an untruthful account of how he came by it. On the faith of that account, Credit Suisse proceeded to process it; whether Credit Suisse should in any event plainly not have done so for other reasons is, for present purposes, neither here nor there. As is now apparent, Mr. Attar maintained that untruthful account in later meetings. Once again, my conclusion here fortifies me in the conclusion to which I have come as to Mr. Attar's bad faith in connection with his acquisition of the cheque. In short, Mr. Attar's dealings with Credit Suisse were characterised by bad faith throughout, at least from the time when he acquired the cheque and including but not confined to, his presentation of the cheque for collection.
129. The customer profile: In the light of the conclusions already reached, this issue, going to the disputed material set out in the customer profile, is somewhat academic. I take it very briefly indeed. It will be recollected that I deferred a decision on this topic, so as to avoid dealing with it in isolation. Sadly, having considered Mr. Attar's thoroughly dishonest conduct in the round, I am driven to accept that the disputed material in the customer profile was falsely supplied by him. That Mr. Attar's precise motive for dishonesty at the stage of opening the account is unclear, does not dissuade me from this conclusion. The only alternative is altogether too unlikely; it would involve Mr. Bogner being dishonest in this respect and, coincidentally, Mr. Attar being consistently dishonest thereafter but not on this occasion. At all events, the conclusion at which I have arrived is consistent with the view taken by Credit Suisse; namely, that while Mr. Bogner was not suspected of dishonesty, he had not been diligent in the matter of knowing his client. It is, I think, unnecessary to say more on the customer profile and certainly nothing additional turns on it.
(6) A postscript as to the claim in restitution
130. For reasons much earlier explained, my conclusions as to Mr. Attar's bad faith are fatal to any chance Mrs. Attar may otherwise have had of availing herself of the defence of change of position in respect of the (alleged) payments from the HSBC account to Mr. Frassanito and Mr. Abdallah.
(7) Overall summary
131. It follows that Credit Suisse succeeds against Mr. Attar in respect of its allegations of bad faith/ dishonesty. In principle therefore, Credit Suisse is entitled to damages or an indemnity in respect of all losses sustained and/or incurred by it in relation to the cheque.
132. As discussed at the hearing, the precise form of order may turn on the position reached in the Carrefour litigation in Monaco; again, I shall be grateful for Mr. Dale's assistance in this regard - and on all questions of interest and costs.