Liability found in Expropriated 'Cash and Carry' Business Profits

Law and Courts II

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The RSA business ran a Cash and Carry for approximately 13 years until sold, and during this period an 'off book' cash business operated simultaneously. The profits from the primary business, undeclared to SARS* were expatriated from RSA. The SARS enquiry lasted for years dealt with the scale of operational sums that swept up to R209 million plus. Documents available to the honourable Judge consisted mainly of SARS witness statements, a settlement agreement plus further a significant UK audit report to the HMRC* that covered the defendant’s personal affairs, meetings, historic tax affairs, London properties managed, middlemen, commission structures and many offshore structures a telling email remark by the auditors in lieu of quantification of assets request by HMRC “[y]ou tell us what you think he owes and we’ll pay”, sic. Due to the acrimony between claimants and defendant, collusion was at no stage suspected by either SARS or HMRC. The RSA profits concentrated into Swiss bank accounts [“SBA”] the claimants declared also belonged to them as per a shareholders’ agreement but which the defendant through a maze of audacious greed and pride reallocated via Power of Attorney, into control over every aspect of finance, investments and accounts dealing with assets, numerous SBA with corresponding regularly changed company names/account details [although the letterheads remained the same, sic].
The Trial was conducted remotely and persuant to the order of the Deputy Master Nurse for a split trial; quantum and disclosure being restricted separately while certain documents were curially permitted for discovery and others raised by the pleadings considered relevant and a few not relevant. In the introductory facts, two businessmen who resided in South Africa ["RSA"] were the claimants and the UK defendant with whom they signed agreement, who had assets and property related interests in partnership with his wife.

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Vide Gangat v Jassat, Neutral Citation Number [2021] EWHC 2644 (Ch); * South African Receiver of Revenue and Her Majesty’s Revenue and Customs respectively;
^ Al- Dwaisan v Al-Salam [2019] EWHC 301 HHJ. Company Law Today comments - the Court dealt successfully with liability, first.



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Brief summary
The full scope of the widespread operations referenced quite a trail of rental management fees and payments, RSA businessmen managing trust deeds with concomitant beneficiary interests, transfers of companies offshore, nominee and director payments, loans, bonuses, mortgage monies, all hidden from the claimants. The Judge cited Al-Dwaisan a [2019] trial^ where '[t]he claimant bears the onus of proving that the defendant has received property into their control in circumstances sufficient to import an equitable obligation to handle the property for the benefit of another' at para 20-015’, the defendant’s control being the key component.