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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2017/18.html
Cite as: [2017] EWCA Civ 18, [2017] WLR(D) 36

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Neutral Citation Number: [2017] EWCA Civ 18
Case No: A2/2015/2652/QBENF

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
Mrs Justice Andrews DBE

Royal Courts of Justice
Strand, London, WC2A 2LL
23 January 2017

B e f o r e :

LORD JUSTICE SIMON
Rt. Hon. SIR MARTIN MOORE-BICK
and
Rt. Hon. SIR STEPHEN TOMLINSON

____________________

Between:
Ikram Mahamat Saleh

Appellant
and


Director of the Serious Fraud Office

Respondent

____________________

Nicholas Yeo (instructed by Stephenson Harwood LLP) for the Appellant
Andrew Mitchell QC, Henry Forbes Smith and Fiona Jackson (instructed by the Serious Fraud Office) for the Respondent

Hearing date: 7 November 2016

____________________

HTML VERSION OF JUDGMENT APPROVED
____________________

Crown Copyright ©

    Lord Justice Simon:

    Introduction

  1. This is an appeal from the decision of Andrews J reported as Saleh v. The Director of the Serious Fraud Office at [2015] EWHC 2119 (QB), and is brought with the leave of the Judge.
  2. On 29 July 2014 Mostyn J had made a Property Freezing Order ('PFO') under Part 5 of the Proceeds of Crime Act 2002 ('POCA') in respect of £4,400,000 plus interest credited to an account at the Royal Bank of Scotland Plc in the name of Computershare Investor Services Plc. This money was the proceeds from the sale of 800,000 shares in a Canadian oil and gas company, Caracal Energy Inc, formerly named Griffiths Energy International Inc ('Griffiths'). It is convenient to refer to these shares as 'the Saleh shares.'
  3. The appellant ('Mrs Saleh') is the owner of the Saleh shares; and the respondent contends that her acquisition of the shares was part of a series of corrupt transactions, which involved personnel and companies connected to the diplomatic staff at the Chadian Embassy in Washington DC, that were entered into by Griffiths in order to promote its commercial interests in Chad.
  4. The appellant applied to discharge the PFO; and at the hearing before Andrews J a number of points were in issue. On this appeal the focus of the appellant's challenge to the PFO has narrowed. The sole issue is whether an order made on 16 April 2014 by the Court of Queen's Bench in Alberta (the 'Canadian Order') was an order in rem whose effect was such as to preclude the respondent from contending that the money is or was recoverable property for the purposes of Part 5 of POCA.
  5. Andrews J held that the Canadian Order did not have this effect; and the appellant challenges that decision.
  6. The background

  7. Mrs Saleh acquired the Saleh shares in September 2009 for the sum of Can$800 or £454.40 (at a price of Can$0.001 per share) as part of a private placement.
  8. At the material time, the Chadian Ambassador to the USA and Canada was a man named Mahmoud Bechir ('Mr Bechir'). His wife was Nouracham Bechir Niam ('Mrs Niam'). Mrs Saleh is the wife of Youssouf Takane ('Mr Takane') who was at the material time the Deputy Chief of Mission for Chad in the USA, also based at the Embassy in Washington, up to a point between August 2014 and March 2015.
  9. On 19 January 2011, following protracted negotiations, Griffiths's subsidiary, Griffiths Energy (Chad) Ltd concluded a Production Sharing Contract ('PSC') with the Chadian Ministry of Petroleum and Energy for the exploration and development of two oil blocks in Chad. The PSC granted to Griffiths the exclusive right to explore and develop oil and gas resources in these blocks. Subsequently, plans were made to float Griffiths on the London Stock Exchange by the end of the year.
  10. Following the sudden death of Brad Griffiths, the chairman and one of its founding shareholders in July 2011, a new and independent management team was hired to manage Griffiths. On 30 October 2011, in the course of due diligence enquiries preparatory to the planned flotation of the company, it was discovered that two sequential (and materially identical) 'consulting agreements' had been made between Griffiths and a Nevada corporation named Chad Oil Consultants LLC ('Chad Oil'). Under these agreements Griffiths promised to pay Chad Oil a 'consulting fee' of US$2 million if it succeeded in securing the development rights to the two oil blocks in Chad. Mrs Niam (the wife of the ambassador) was the sole officer, director and shareholder of Chad Oil.
  11. The sum of US$2 million was paid to Chad Oil on 10 February 2011 pursuant to the second of those consultancy agreements, entered into in January 2011, very shortly before the PSC was signed. Directions about the banking information for the deposit of the funds were given to Griffiths by Mr Takane (Mrs Saleh's husband).
  12. The Chad Oil consultancy agreements and the payment of the US$2 million 'fee' were drawn to the attention of the board of Griffiths, which instructed legal counsel at Gowling Lafleur Henderson LLP ('Gowlings') to carry out an internal investigation into all Griffiths' consulting agreements and transactions; and the planned sale of the company was put on hold.
  13. Gowlings' investigation unearthed, among other matters, the following information.
  14. The first of the consultancy agreements between Griffiths and Chad Oil, dated 15 September 2009, replaced an earlier agreement in identical form made on 30 August 2009 between Griffiths and a Maryland company named 'Ambassade du Tchad LLC' which was owned and controlled by the ambassador, Mr Bechir. That agreement had provided for a US$2 million fee to be payable to that company if Griffiths were awarded the concession in respect of the oil blocks on or before 31 December 2009 (or such other date as the parties agreed). The agreement had been signed on behalf of Griffiths by Mr Naeem Tyab, the business partner of Mr Griffiths and another of Griffiths' founder shareholders.
  15. In early September 2009, Griffiths's external legal counsel advised Mr Tyab that the ambassador was a government official and that Griffiths could not (in effect) deal with him commercially. This advice led to the original consultancy agreement being rescinded and replaced shortly afterwards by the first of the consultancy agreements between Griffiths and Chad Oil, a company that had been incorporated in Nevada five days earlier, on 10 September 2009. The original consultancy agreement with Ambassade du Tchad LLC was used by the Griffiths lawyers as the template for the subsequent Chad Oil consultancy agreements.
  16. On the same date as the first consultancy agreement with Chad Oil was signed, 15 September 2009, Mrs Saleh, Mrs Niam and a man named Hassan (a former religious teacher of the ambassador's children) simultaneously subscribed for a total of 4 million 'founders' shares' in Griffiths, ostensibly as part of a private placement of 40 million common shares at the nominal price of 1 Canadian cent each. The signed subscription agreements were accompanied by payment for the shares.
  17. Mrs Niam subscribed for and was allotted 1,600,000 shares in her own name; and Griffiths admitted in later criminal proceedings in Canada that Mrs Saleh and Mr Hassan were nominated by Mrs Niam to acquire a total of 2,400,000 founders' shares in Griffiths on the same terms as those on which she acquired her shares. 1,600,000 shares were allotted to Mr Hassan, with the share subscription agreement relating to his shares being signed by Mr Bechir, as was the Western Union money order payment for the shares in Mr Hassan's name. The remaining 800,000 were allotted to Mrs Saleh. Her payment for the Griffiths shares was also made by means of a Western Union money transfer. The payment was in the sum of US$745, the equivalent of Can$800.
  18. The whole of the issued share capital of Griffiths was purchased by Glencore Plc for £5.50 per share in or around July 2014, and Computershare Investor Services Plc acted as the stock transfer agent. This explains how the money came to be transferred into its bank account, and how it is that this money is the subject of the PFO.
  19. The total amount of shares acquired by Mrs Niam, Mrs Saleh and Mr Hasan was the equivalent of 10% of the shares on offer; and although the purchase price was the same for all the subscribers, they were the only three 'outsiders' who were offered this opportunity to invest in Griffiths.
  20. It is the respondent's case that there is no obvious reason why any of them would want to make even a modest investment in a recently-formed private Canadian oil and petroleum company, unless they were in a position to know that in due course Griffiths would acquire rights over the oil blocks in Chad.
  21. In circumstances that I will come to, it was admitted by Griffiths in Canadian criminal proceedings that Mrs Niam subsequently took steps to have Mr Hassan's shares transferred to her company, and then into her own personal account, using a Power of Attorney granted to Mr Bechir purporting to give him authority over Mr Hassan's shares.
  22. As a result of the Gowling investigation, which included interviews with Mrs Saleh and Mr Takane, the board of Griffiths decided that it should voluntarily report itself to the Canadian law enforcement authorities. Thereafter Griffiths co-operated fully with the police investigations in Canada, including waiving privilege over communications with its former external legal advisers. It was accepted by the Public Prosecuting Service of Canada ('PPSC') that it would not have unearthed the corruption had it not been for Griffiths' self-reporting; and it was this that made the PPSC amenable to entering into a plea bargaining arrangement with Griffiths.
  23. The Canadian proceedings

  24. On 22 January 2013, at the Queen's Bench Court of Alberta, Calgary (before Brooker J), Griffiths pleaded guilty to a single charge of violation of s.3(1)(b) of the Corruption of Foreign Public Officials Act 1999, on the basis of a Statement of Facts agreed between Griffiths and the PPSC. It was fined the relatively modest sum of Can$10,350,000 because of its extensive co-operation with the authorities, and on the basis that the Crown was not alleging, and Griffiths did not admit, that any influence was actually realised.
  25. At the hearing, prosecuting counsel informed Brooker J that the Crown would be seeking forfeiture of the shares issued to Mrs Niam, Mrs Saleh and Mr Hassan under s.490.1 of the Criminal Code of Canada ('the Code') as being the proceeds of crime within the meaning of s.462.37 of the Code and being 'offence related property'. 'Offence related property' has a broad definition in s.2 of the Code, and includes any property, within or outside Canada, by means or in respect of which an indictable offence under the Corruption of Foreign Public Officials Act is committed, or that is used in any manner in connection with the commission of such an offence.
  26. Brooker J noted that Mrs Niam, Mrs Saleh and Mr Hassan were not parties to the Agreed Statement of Facts, and indicated to prosecuting counsel and counsel for Griffiths that they ought to be given notice of any forfeiture application by the Crown.
  27. Counsel for Griffiths, Ms Robidoux, informed the judge that although Griffiths had admitted that the opportunity to purchase shares by Mrs Niam constituted part of the unlawful compensation that was paid to her, and that it would indirectly benefit her husband, Griffiths did not admit, and took no position on whether, the shares purchased by Mrs Saleh and Mr Hassan fell into the same category.
  28. A Notice of Forfeiture Application was issued by the PPSC on 11 February 2013 in respect of the shares issued to Mrs Niam, Mrs Saleh and Mr Hassan on the basis that:
  29. … providing the ability to acquire founder shares in [Griffiths] was a direct or indirect reward, advantage or benefit given to a public official to induce the official to use his or her position to influence any acts or decisions of the foreign state … for which the official performs duties or functions.
  30. In the course of the forfeiture proceedings, a without notice application was made for a 'Management Order' (which appears to be the Canadian equivalent of a PFO) supported by an affidavit sworn by the officer in the case. The claim in respect of Mrs Saleh was based on the role played by her husband in endeavouring to ensure that Griffiths was successful in obtaining the relevant contracts in Chad. It was the prosecution case that she was being rewarded as an incentive to her husband, in the same way as Mrs Niam.
  31. On 14 June 2013 the Court made a Management Order directing the Minister of Public Works and Government Services or his designate to take possession and control of the shares until they were 'returned in accordance with the law or forfeited to Her Majesty'. The shares were described in the order as 'common shares of Griffiths Energy International Inc' although by the time the Management Order was made, Griffiths had changed its name to Caracal Energy Inc. The name change had occurred on 23 May 2013, and this was the name under which Griffiths eventually floated on the London Stock Exchange later that year. The share certificates relating to the Griffiths shares were seized by the police in Canada pursuant to this order.
  32. On 7 August 2013, Brooker J began hearings in the forfeiture applications against Mrs Saleh and Mrs Niam. This was the first occasion at which they appeared by counsel. The defence put forward by Mrs Saleh (by Motion served on the same date) was that the Gowlings investigation had disregarded her diplomatic status and that her property was protected from seizure under the Vienna Convention 1961. It is apparent from the transcript that this was a directions hearing and that an issue arose as to the disclosure that should be given by the prosecution prior to any substantive hearing.
  33. Brooker J stood the matter over to see if this issue could be resolved by agreement; and the PPSC subsequently provided some voluntary disclosure, including disclosure of the statements that Mrs Saleh had made to the Gowlings investigators and copies of certain correspondence. Mrs Saleh and Mrs Niam contended that the voluntary disclosure was inadequate.
  34. At a further hearing on 28 February 2014, Brooker J observed that the Crown's written submissions recognized that procedural fairness required a measure of disclosure, and ruled that the applicants were entitled to disclosure from the Crown, although the nature, extent and basis for the disclosure would have to be determined. A date was fixed for that argument to be heard on 16 April 2014. As Andrews J observed, that hearing was not, and was never intended to be, the hearing of the substantive application for forfeiture of the shares.
  35. Prior to this, on 6 November 2013, counsel for Mrs Saleh had filed a notice of motion seeking an order quashing and dismissing the forfeiture application in respect of her Griffiths shares, inter alia on the basis that the evidence on which the PPSC relied was inadmissible because it had been obtained in violation of the Vienna Convention. The argument was that this inadmissible evidence had been used to obtain the Management Order. A further point was made that it was impermissible to seek forfeiture in respect of her interests if she had not been joined in a criminal prosecution.
  36. This motion was never heard or ruled upon by the Canadian court because, by a letter dated 4 April 2014, the Chief Federal Prosecutor informed the court and the lawyers for Mrs Niam and Mrs Saleh that the Crown would be withdrawing the applications for forfeiture against them both. The letter said that Mr Rodych (Crown counsel) 'will take appropriate steps to formalize that decision through filing notice on the record or addressing the matter before the court on April 16, 2014.' The reasons for the decision to withdraw the forfeiture applications in Canada have never been explained.
  37. The hearing on 16 April 2014 began with Mr Rodych confirming the contents of the 4 April letter and applying to withdraw the forfeiture application against Mrs Niam and Mrs Saleh. He then referred to the shares and indicated that counsel (Mr Beresh QC, for Mrs Saleh and Mr James, for Mrs Niam) would be making applications in relation to the shares which had been seized.
  38. Mr Beresh QC then put a draft order before the court. This was not in the form of a consent order. It was an order which Mr Rodych had signed to signify his approval of its form. Mr Rodych asked the court to consider it. The document was headed:
  39. In the matter of an application by the applicant [the Crown] pursuant to sections 462.37 and 490.1 of the Criminal Code for forfeiture of proceeds of crime and offence related property.
  40. The typed word 'Consent' was deleted by hand and initialled by prosecuting counsel to make it plain that it was an 'order', but not one made by consent. Similar manuscript annotations were made at the end of the order, above the signatures, deleting the word 'consented' in the phrase 'consented to by' and stating that it was 'approved as to form' only.
  41. The preamble recites the chronology of the search warrant, the seizure of the shares, the management order and the notice of forfeiture, and continued:
  42. AND WHEREAS the Prosecution has served Notice upon counsel for [the Appellant] that it intends to withdraw the Application for Forfeiture in relation to [the Saleh shares] [6th recital]
    AND WHEREAS no evidence has been presented by the Applicant, Her Majesty the Queen, in the Right of Canada, upon which this Honourable Court could conclude in favour of the Applicant that section 490.5(4) has been satisfied and it therefore appearing that [Mrs Saleh] is innocent of any complicity in any indictable offence that resulted in the RCMP seizure of her shares in [Griffiths] or that the said Saleh shares in [Griffiths] were likely to have been used in connection with the commission of an unlawful act by either [Mrs Saleh] or by [Griffiths] [7th recital].
    AND WHEREAS the Applicant, Her Majesty the Queen, in the Right of Canada has confirmed that it has no intention of appealing from its decision to withdraw the said forfeiture application [8th recital].
    …
    AND WHEREAS counsel for all parties to the said Forfeiture proceedings have made representations to this Honourable Court, in relation to [the Appellant] [10th recital]
    IT IS ORDERED AND ADJUDGED THAT:
    …
    3. This Order/Judgment of this Court is to be construed as a judgment in rem, in that the 800,000 common shares issued by Griffiths Energy International Inc. (now Caracal Energy Inc.) to the Respondent, Ikram Mahamat Saleh, are neither crime related proceeds nor offence related property but were, at all times from the date those shares were issued to her, continuously and beyond the date of this Order/Judgment, her property lawfully acquired by her;
    4. The Respondent, Ikram Saleh, shall be entitled to provide a certified copy of this order to Caracal Energy Inc.'s transfer agent and registrar, Computershare Investor Services plc at its principal office in Bristol, United Kingdom, or to Computershare Investor Services Inc. at its principal offices in either Calgary or Toronto, when she surrenders her Share(s) Certificates, evidencing her ownership of common shares in [Griffths] (now Caracal Energy Inc), in exchange [for] share certificates to be issued by Caracal Energy Inc;
    …
  43. I have added numbers to the recitals for convenience; they are not in the order. For present purposes it is only necessary to refer to part of the exchange between Mr Beresh QC and the Court in relation to the draft order.
  44. Mr Beresh: If I might take a few moments of the court's time. I appreciate my friend's frankness in relation to this in the notice we received. As a result, or course, there are certain matters that arise and flow directly from that decision. I've reduced that to an order which my friend has signed this morning, not as a consent order but as an approved order.
    And you should note, in the interim, since this application commenced, Griffiths changed its name to Caracal Energy Inc. And there has recently been an offer to purchase the interest by a further company which I've named in my order. And it's my request that the court consider this order. I think it's appropriate in the circumstances, particularly that it has been approved by my friend.
    …
    The Court: Does the Crown have any comments on the order? You approved it as to form, but you didn't consent to it.
    Mr Rodych: I don't take opposition to it, My Lord. There's matters in there that are beyond my capacity, but I don't take issue with - and I leave it to the court to make an order in that - in that respect.
    The Court: Okay. The only thing I was questioning was the - I suppose I can get around it, in the sense that whereas no evidence has been presented by the Queen upon which I could find in favour of the - the 490 has been satisfied; therefore, appearing that Saleh is innocent of any complicity.
    All right that's just a recital in any event.
    Mr Beresh: It is. It comes directly from the Criminal [Code]
    The Court: Okay.
    Mr Beresh: Yes
    The Court: All right
    Mr Beresh: Thank you.
    The Court: The order is granted.
    Mr Beresh: Thank you.
  45. Without hearing anything further by way of submission, Brooker J made the order in the form that was put before him.
  46. Before turning to the argument on this appeal it is convenient to mention three points in relation to the Canadian Order and the hearing.
  47. First, Brooker J was not taken through the document by counsel nor was it explained to him why the Court was being invited to make an order in those terms, beyond the observation that 'certain matters' arose and 'flowed directly' from the decision of the prosecution not to proceed. The reason for its terms would only become apparent later.
  48. Secondly, the separate order in relation to Mrs Niam's shares, drafted by her counsel, provided for the discharge of the Management Order in her case and the right to inform Caracal Energy Inc. with a copy of the Order in terms similar to paragraph 4 of the order relating to Mrs Saleh. However, it contained neither the exculpatory 7th recital, nor paragraph 3 of that order.
  49. Thirdly, as Andrews J noted, the words in the 7th recital, 'section 490.5(4) had been satisfied' are inapposite. Section 490.5(4) of the Code deals with a situation in which offence-related property is forfeited pursuant to an order made under s.490.1(1) and a third party claims an interest in that property. Section 490.5(1) provides a mechanism for a person with such an interest to apply by notice in writing for an order under sub-section (4); and s.490.5(4) allows the judge, on hearing such an application, to make an order 'declaring that the interest of the applicant is not affected by the forfeiture and declaring the nature and the extent or value of the interest.' As Andrews J observed, section 490.5(4) could not apply since no forfeiture had been ordered which would have triggered the operation of section 490.5. In a close analysis of the relevant provisions of the Code, at [40]-[50] of her judgment, Andrews J concluded that the order must have been intended to be made under s.490.4(3). As she noted at [43], the power of the Canadian Court to make such an order would arise if it were satisfied on the information before it that the person concerned 'appears' innocent of complicity or collusion in the offending; and this was not the same thing as being satisfied that the person concerned was in fact innocent of such complicity or collusion. The lack of evidence was a matter specifically raised by Brooker J in the course of argument, although he decided that it did not matter since the 7th recital was 'just a recital in any event.'
  50. The effect of the Canadian Order

  51. The argument on this appeal, as it was before Andrews J, related primarily on the effect of paragraph 3 of the Canadian Order.
  52. Mr Yeo submitted that this provision contained an express adjudication which gives rise to an estoppel per rem judicatem, see Khan v. Goleccha International Ltd [1980] 1 WLR 1482, Brightman LJ at p.1490F
  53. The only sensible approach to the law, in my view, is to treat an issue as laid to rest, not only if it is embodied in the terms of a judgment, or implicit in the judgment because it is embodied in the spoken decision, but also if it is made in the face of the court or implicit in a consent order.
  54. He submitted that the PPSC had accepted that Mrs Saleh appeared to be innocent of complicity in any indictable offence, and on this basis the Canadian Court had expressly and definitively lent its authority in 'a judgment of the Court' (described as 'to be construed as judgment in rem') to a conclusion that the Saleh shares were 'neither crime related proceeds', nor 'offence related property'. It followed that paragraph 3 of the Canadian Order amounted to a declaration as to the status of the Saleh shares which was binding as against the world, and that it was not open to the SFO in this country, nor indeed anyone else, anywhere else, to contend otherwise. It was in this context that he drew attention to the fact that, on the basis of paragraph 4 of the Canadian Order, it was not open to Caracal Energy Inc. to challenge Mrs Saleh's ownership of the Saleh shares in the light of paragraphs 3 and 4. He argued that his client should not be further vexed in this jurisdiction on a matter that has been conclusively determined in her favour in the Canadian proceedings.
  55. I do not accept this argument.
  56. It is clear that a foreign judgment which is final and conclusive on the merits is conclusive as to any matter thereby adjudicated upon, and cannot be impeached for any error either of fact or of law, see Dicey, Morris & Collins, The Conflict of Laws, 15th Edition at 14R-118. The principle applies with equal force to foreign judgments in rem and in personam, see Castrique v. Imrie (1870) LR 4 HL 414. The difference between judgments in personam and in rem is that the former are conclusive only between the parties and their representatives, while the latter determine the status or disposition of property on a basis which is valid against the whole world and not merely between the parties, see Pattni v. Ali [2006] UKPC 51, [2007] 2 AC 85, Lord Mance at [21]. Although a foreign judgment will not be characterised as a judgment in rem unless the foreign court characterises it as such, the fact that it does so is not dispositive of the issue so far as the rules of private international law are concerned. Whatever the appearance of the judgment it will only be regarded as a judgment in rem if it is made by a court with jurisdiction to determine proceedings where the function of those proceedings is to determine rights or status as against the world. Findings which are merely incidental to a determination that the court is required to make in personam are not binding on the world at large.
  57. These points were not in dispute on this appeal.
  58. The argument turned on whether the Canadian Order of 16 April 2014 was (1) final and conclusive on the merits, and (2) was a judgment in rem so as to bind the SFO and preclude any claim in the present proceedings. As was pointed out by Sir Stephen Tomlinson in the course of argument, the matter might be tested by asking whether the Canadian Order had the effect of preventing anyone who had a better right to the shares than Mrs Saleh from asserting such a claim.
  59. The decision of the House of Lords in The Sennar (No.2) [1985] 1 WLR 490 throws light on what is meant by 'final and conclusive on the merits'. The speech of Lord Brandon, with whose conclusions and reasons the other members of the Judicial Committee agreed, sets out the relevant principles (at p.499F), when dismissing an argument that the decision of the foreign court in that case was only procedural in nature and not a decision on the merits.
  60. In my opinion, this argument is based on a misconception with regard to the meaning of the expression 'on the merits' as used in the context of the doctrine of issue estoppel. Looking at the matter negatively a decision on procedure alone is not a decision on the merits. Looking at the matter positively a decision on the merits is a decision which establishes certain facts as proved or not in dispute; states what are the relevant principles of law applicable to such facts; and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned. If the expression 'on the merits' is interpreted in this way, as I am clearly of opinion that it should be, there can be no doubt whatever that the decision of the Dutch Court….
  61. I have no doubt that Mrs Saleh's legal representatives intended to bring into existence a judgment which could be relied on as conclusive on the merits and take effect as a judgment in rem. The 7th recital contains the observation, 'and it therefore appearing that [Mrs Saleh] is innocent of any complicity in any indictable offence'. However, the word 'therefore' links this conclusion to a lack of evidence not to proof of facts. The only facts recorded were that the prosecution had withdrawn its application and there was no evidence upon which the Court could conclude that the forfeiture provisions were satisfied. The 7th recital was introduced by reference to an inapposite provision of the Code and was plainly not the subject of any decision. As Andrews J noted, no evidence had been presented upon which such a finding could be made either way.
  62. Paragraph 3 of the order is linked to and follows from the 7th recital. However, its terms were neither explained by Mrs Saleh's counsel nor considered and ruled upon by the Judge. The Judge was not informed that it was intended to bar any enforcement authorities from pursuing proceedings in their own courts under their own law. Not only had there been no evidence which might justify such a consequence, there was no submission which might justify it, particularly in circumstances where there was no equivalent provision in respect of Mrs Niam. Furthermore, the prosecution (as the other party to the order) did not consent to the order, and prosecuting counsel made clear that there were matters in the order which 'went beyond [his] capacity'.
  63. In the light of the circumstances set out above, it cannot be said that the Canadian Court intended that the order should have the effect for which Mr Yeo contends. Furthermore, and perhaps more materially, the Canadian Order was plainly not the product of a decision-making process, in which the relevant facts were considered and weighed, in which the relevant principles of law were set out and applied to the facts found, and from which a conclusion was reached, see The Sennar (No.2) above. There was no judgment in that sense at all, simply an order procured in the circumstance I have described. All that paragraph 3 of the Canadian Order achieved was the appearance of a decision on the merits and the depiction of an order in rem. On proper analysis it was in fact neither.
  64. Furthermore, even if Mr Yeo were right in his contention that the Canadian Order operates in rem, the only respect in which it did so was in relation to title to the shares in Griffiths. As Andrews J expressed it at [100] of her judgment:
  65. The whole purpose of this Order was to restore the shares to their lawful owners, Mrs Saleh. Above and beyond making it clear to anyone who might be concerned about it that she had title to the shares, and could confer clean title to the purchaser, the Court was not seeking to achieve a final ruling on their status that would bind the whole world.
  66. As Lord Mance observed in the Privy Council decision in Pattni v. Ali [2007] AC 85 at [22].
  67. The authorities give guidance as to some of the factors which can assist to determine whether a judgment has in rem effect against all the world - inter omnes. They include the nature and terms of the court's jurisdiction … A second point is that even a judgment which would otherwise be regarded as in rem will not have that effect if made simply by consent of the parties who are before the court: cf Spencer Bower, Turner & Handley, para 235, where footnote 8 refers to Jenkins v Robertson (1867) LR 1 Sc & Div 117.
  68. The way in which the order came to be made is similar to that described in critical terms by Buckley LJ in Wallersteiner v. Moir (No.1) [1974] 1 WLR 991, at 1028 H:
  69. I wish to add a few words about the form of the order made by the judge. The order which he made was on the lines of a minute which had been prepared and submitted to him. There was little or no discussion about its form. Following the prayer in the counterclaim, it contains a large number of declarations, including declarations that Dr Wallersteiner has been guilty of fraud. I am more familiar with the practice in the Chancery Division than in any other division of the High Court, but it is probably in the Chancery Division that more use is made of declaratory relief than elsewhere. It has always been my experience and I believe it to be a practice of very long standing, that the court does not make declarations of right either on admissions or in default of pleading. A statement on this subject of respectable antiquity is to be found in Williams v. Powell [1894] W.N. 141, where Kekewich J, whose views on the practice of the Chancery Division have always been regarded with much respect, said that a declaration by the court was a judicial act, and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied by evidence. If declarations ought not to be made on admissions or by consent … Where relief is to be granted without trial, whether on admission or by agreement … and it is necessary to make clear upon what footing the relief is to be granted, the right course, in my opinion, is not to make a declaration but to state that the relief shall be upon such and such a footing without any declaration to the effect that that footing in fact reflects the legal situation.
  70. In the light of these conclusions it is unnecessary to deal with the other points raised in the Respondent's Notice: that if the Canadian Order were to preclude the SFO from pursuing the proceedings in this jurisdiction, it would be inconsistent with the statutory regime established by POCA; and that, even where the requirements for the recognition and enforcement of in rem judgments are satisfied, the Court retains a residual discretion to depart from the ruling to avoid injustice.
  71. For the reasons set out above I would dismiss the appeal.
  72. The Rt. Hon Sir Martin Moore-Bick

  73. I agree.
  74. The Rt. Hon Sir Stephen Tomlinson

  75. I also agree.


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