Ashley & Anor v Jimenez & Anor

On an application concerning service and jurisdiction, a party relying on a disputed foreign jurisdiction agreement must establish the validity of that agreement on the better of the argument, bearing the ordinary burden of proof. A jurisdiction clause is construed by applying ordinary principles of contractual interpretation, in its commercial and factual context. For service out, the claimant must show a serious issue to be tried, a good arguable case within a jurisdictional gateway, and that England is clearly or distinctly the appropriate forum. A Quistclose trust may arise by operation of law where money is paid for a restricted purpose, even though the recipient was not party to the underlying contract. Under the Brussels Recast Regulation, the place of the resulting obligation to restore trust money is not necessarily the place where the harmful event occurred.

The claimants alleged that £3 million was paid to South Horizon for the acquisition of an indirect interest in a French golf-course development, but that the promised shares were never transferred. They advanced claims in contract, deceit, misrepresentation, trust, dishonest assistance, knowing receipt and restitution.

The defendants applied to set aside service, challenge jurisdiction and rely on an alleged agreement dated 17 September 2008 containing an exclusive UAE jurisdiction clause. The claimants alleged that the agreement was forged. The court had to determine the validity and scope of that agreement, service out on Mr Jimenez, and jurisdiction over South Horizon under the Brussels Recast Regulation.

1. The 17 September Agreement. The defendants bore the burden of proving that the agreement containing the UAE jurisdiction clause was executed. The applicable standard was whether they had the better of the argument on that material jurisdictional fact. The handwriting evidence, inconsistencies in the defendants’ evidence, timing of production, unexplained absence of financial records, and conflict with contemporaneous documents meant that the claimants had the better of the argument. The agreement was therefore not established as valid.
2. Construction. Alternatively, the UAE jurisdiction clause did not extend to the investment dispute. The agreement concerned South Horizon’s agency for the sale of Newcastle United and remuneration for that work. It did not govern the earlier property investment or money allegedly reconstituted as commission under a later oral arrangement.
3. Service on Mr Jimenez. The claimants showed a serious issue to be tried and a good arguable case under the relevant Practice Direction 6B gateways. The deceit claim satisfied the damage requirements because the payment was made from an English account and the representations were arguably made and acted upon in England. The contract was arguably made in England and governed by English law, applying the Rome Convention’s closest-connection analysis. The claimants also showed a good arguable case under the trust and restitution gateways, although not under gateway 12. England was clearly the appropriate forum, despite connections with Cyprus, Dubai and France.
4. Trust claims and South Horizon. A Quistclose trust could arise by operation of law when South Horizon received money subject to a restricted purpose. For service purposes, it was properly treated as a species of resulting trust. However, under the Brussels Recast Regulation, the harmful event for the breach of trust occurred where the money was paid away, in Cyprus, rather than where the claimant would have received payment. Article 7(6) also did not apply because the trust was not created orally and evidenced in writing in the required sense, and its domicile was unlikely to be England.
5. The application based on the 17 September Agreement was dismissed. Permission to serve Mr Jimenez out of the jurisdiction stood. The court declared that it had no jurisdiction over South Horizon. The remaining applications were dismissed.