Mercy Global Consult Ltd (In Liquidation) v Abayomi Adegbuyi-Jackson & Ors

In assessing equitable compensation, credit must be given for assets recovered or retained under proprietary claims where those assets represent traceable proceeds of the relevant breach. A personal award must avoid compensating the claimant twice for the same loss, including where liabilities overlap between trustees and third parties. Where assets have not been sold and no current valuation evidence is available, credit may be assessed by reference to purchase price less reasonable sale costs. A party subject to a general debarring order cannot ordinarily participate in determining quantum unless a narrow residual discretion applies. Applications for further post-judgment relief should be heard where affected parties have a proper opportunity to be heard. Interest may reflect the rate applicable to the underlying liability.

This was a consequential-matters hearing following the trial judgment in Mercy Global Consult Ltd (In Liquidation) v Abayomi Adegbuyi-Jackson & Ors, [2023] EWHC 3203 (Ch). The court was required to calculate equitable compensation, determine interest and costs, and give directions concerning rent and further enforcement relief.

The defendants sought an adjournment, permission to appeal and a stay. The claimant also sought post-judgment freezing orders, charging orders, third-party debt orders and relief concerning rental income. The central issues were the credits required for assets subject to proprietary claims, the effect of the debarring orders on participation in quantum, and the appropriate procedural course for unresolved enforcement matters.

1. Equitable compensation. Credit had to be given for all assets in which the claimant had established proprietary rights and which had been acquired with traceable proceeds of the fraud. Those assets remained available to the claimant and therefore could not also be treated as losses attracting personal equitable compensation. The same principle applied to the other director defendants.
2. The order should contain an overall cap preventing double recovery where liabilities overlapped. The cap was to be calculated after allowing the credits for proprietary assets.
3. Because the assets had not been sold, there was no valuation evidence, and a beneficiary would usually be entitled to benefit from an increase in value, credit was allowed by reference to purchase price less an allowance for sale costs.
4. The defendants were not entitled to participate in the quantum issue. The trial was not split, and the general debarring orders covered equitable compensation. No authority supported limiting their effect to liability.
5. Relief concerning rent, post-judgment freezing orders, charging orders and third-party debt orders was deferred to the forthcoming hearing on variation of the existing freezing orders, where affected defendants would have an opportunity to be heard.
6. Costs were ordered in favour of the claimant, subject to excluding claims against the unsuccessful or settled defendants, with a payment on account of £765,000. A stay and permission to appeal were refused. Money judgments were payable within 14 days. Interest was awarded at 2.5 per cent above base rate.

The judgment records that related appeals against pre-trial debarring orders were already before the Court of Appeal. Permission to appeal the December 2023 trial decisions was refused so far as the application could be dealt with by this court.