At the start of the 2006 World Cup, a Radio Five Live presenter commented: “This World Cup has got a very international feel to it.” Stating the obvious is a criticism that could also be made against the title to this article, although the title does accurately sum up this topic.

Sometimes, people in the world of sport make less obvious comments such as David Beckham’s assessment of England’s poor performance against Paraguay in the same World Cup, when he observed “It was really difficult for us playing in the midday sun with the three o’clock kick off.” Even assuming Mr Beckham had forgotten to put his watch forward an hour after arriving from England…

As for dishonest assistance, the definitive test has been with us for some time, but it is probably fair to say that applying the test in practice remains problematic. Indeed, the very nature of the test for dishonest assistance involves consideration of an individual’s experience, knowledge, intelligence and actions. This means that every case of alleged dishonest assistance requires careful and detailed analysis.

Since the decision in Barlow Clowes International Ltd v Eurotrust International Ltd, the courts have consistently interpreted the test with the clear aim to avoid confusion in what is an already difficult area of law. To this end, I will comment on the recent decision in Abou- Rahman v City Express Bank of Lagos. Before doing so, and to put matters into context, a very brief summary (by implication, not doing the topic full justice) of the test for dishonest assistance follows.

Test for dishonest assistance

The “legal test” for dishonest assistance has been considered by three main decisions, namely:

  • the Court of Appeal in Royal Brunei Airlines v Tan;
  • the House of Lords in Twinsectra Ltd v Yardley; and
  • the Privy Council in Barlow Clowes International Ltd v Eurotrust International Ltd.

Until the decision in Barlow Clowes, the test could be defined as:

  1. was the solicitor dishonest by the ordinary standards of a reasonable and honest solicitor?; and
  2. if so, did he realise that he was dishonest by these standards. One area of ambiguity persisted following Twinsectra, and this was whether or not it was necessary for an individual to be aware that his conduct would be considered dishonest, by ordinary standards. The Privy Council in Barlow Clowes clarified the uncertainty in a relatively short period of time following Twinsectra and it was encouraging to see the courts act with such speed, given the potential consequences if the uncertainty had been allowed to persist.

In Barlow Clowes, the defendant argued that he was not aware that his conduct would, by ordinary standards, be regarded as dishonest and he relied on a misleading paragraph in Twinsectra which lent some support for the argument. This argument was rejected and Barlow Clowes clarified matters by stating that:

  1. a dishonest state of mind meant a consciousness that one is transgressing ordinary standards of behaviour; and
  2. the person need not have thought about what these standards were. The case provides a good working example of a dishonest assistance finding based on wilful blindness to investigate a clearly suspicious transaction, and it also emphasises the fact that there is no window into another man’s mind.

Abou-Rahman v City Express Bank of Lagos

This matter went to the Court of Appeal at the end of last year and the relevant facts are:

  • The claimants were the victims of a fraud and considered that the City Express Bank of Lagos (the bank) were liable to them for dishonest assistance, or in restitution for monies had and received.
  • The claimants had paid money to the bank on the fraudster’s instructions, and the money was then transferred on to another of the bank’s clients (the co-conspirator), who were also involved in the fraud and, in short, the bank was being used as a money laundering vehicle.
  • The bank’s local manager had suspected that the co-conspirator had been involved in money laundering activities, but it was held in the lower court that he had not held suspicions around this particular transaction.
  • The claimants appealed the decision of the lower court, arguing that the court
    1. had demanded too specific a knowledge of the fraud and
    2. had ignored the evidence relating to the local manager’s suspicions of the coconspirator.

The Court of Appeal upheld the decision of the lower court. The local manager had not held any particular suspicions at the time of the transactions involving the claimants, and therefore the general suspicion held about the co-conspirator was insufficient to support a finding of dishonest assistance against the bank.

Whilst not directly relevant given its findings, the Court of Appeal reaffirmed that the test for dishonest assistance was predominantly an objective test.

The decision in this case is a clear example of how difficult dishonest assistance cases can be, and how every such case is heavily dependant on its own facts. On close analysis of the judgment and the particular facts, to decide in favour of the claimants would have resulted in an unnecessary widening of the Barlow Clowes net and would have no doubt resulted in adding unwanted confusion to an already difficult subject, where practitioners have only recently enjoyed some clarity.

Conclusion

Sir Anthony Clarke, Master of the Rolls, made the valid observation in 2006 that to use terms such as “objective” or “subjective” when defining a legal test for dishonest assistance does nothing to elucidate matters, and indeed such terms themselves require elucidation. He went on to encourage courts to “say what they mean as clearly and unambiguously as possible”. To be fair to the courts, this is often easier said than done.

In order to reach a conclusion on an individual’s conduct, the question to ask is whether the individual was conscious of facts that would render his participation contrary to normally accepted standards of honest conduct. In order to answer this question, close analysis of what that person knew, said, and did (both before, at the relevant time and later) is required and such close analysis can only definitively take place in the court arena.