Younes v Chrysanthou & Anor

An alleged informal partnership or profit-sharing agreement must be established by the evidence. Commercial cooperation, descriptions of the parties as partners, or an expectation of reward do not by themselves prove such an agreement. Where the documentary evidence and parties’ conduct are inconsistent with the alleged arrangement, the court may reject it after assessing credibility and the evidence as a whole. Unsubstantiated accounts of cash payments cannot be accepted where the supporting records and explanation are unreliable. A claimant entitled beneficially to monies held through a company may recover the unpaid balance from the person who controlled and misapplied them.

Agila Younes claimed the unpaid balance of a US$6.379 million arrangement fee paid to Rufus Limited in connection with the Rusal Project. He contended that Rufus held the fee for him. Demetris Chrysanthou, Rufus’s sole director and shareholder, alleged an earlier partnership under which profits were to be shared equally and a separate 70/30 agreement relating to the fee. He also brought a counterclaim concerning the Al-Karima Project. The central issues were whether the alleged partnership or profit-sharing agreements existed, how much of the fee had been paid to Mr Younes, and whether the counterclaim was established.

1. Claim and counterclaim. The claim succeeded and Mr Chrysanthou’s counterclaim failed. The court found that Mr Younes was entitled to the unpaid balance of the JNR Fee, apparently US$2.9 million, subject to correction of figures and interest. Any issue concerning judgment against Rufus was reserved for submissions.
2. Alleged partnership. There was no real evidence of the alleged partnership or of any other agreement requiring the parties to share profits equally. The alleged arrangement was remarkably vague, undocumented and commercially unusual. Evidence that the parties sometimes described themselves as partners, or worked together on opportunities, did not establish a partnership. The evidence instead showed Mr Chrysanthou generally acting as Mr Younes’s factotum, with Mr Younes as the dominant party.
3. 70/30 agreement and payments. The alleged 70/30 agreement was also undocumented and contradicted by important inconsistencies in Mr Chrysanthou’s evidence. The court rejected his account of the cash payments said to have been made to Mr Younes. There was no satisfactory record of those payments and his explanation of the alleged contemporaneous notes was found to have been constructed during the evidence.
4. Counterclaim. The evidence concerning the Al-Karima Project did not support any partnership. The US$100,000 payment made to Mr Chrysanthou was found to have been assistance during a difficult financial period, not an advance of partnership profits. The evidence established only limited sums received by Mr Younes for his own benefit and did not establish the much larger profit alleged in the counterclaim.
5. The limitation defences did not arise once the alleged partnership and related agreements had been rejected.