The Supreme Court has upheld the Central Bank of Nigeria’s appeal that those alleged to be dishonest assisters in a breach of trust or knowing recipients of trust assets are entitled to plead a statutory limitation defence. BLP’s success has resolved once and for all a limitation issue which has been the subject of conflicting case law for almost a century.
Facts of the case
The Claimant claims to be the victim of a fraud allegedly instigated by the Nigerian State Security Services in 1986. He says that he paid over US$6 million to an English solicitor to be held on trust for him and that in fraudulent breach of that trust, the solicitor paid out the money to the CBN. The CBN argued that the English Courts should not assume jurisdiction to hear and determine the claim on the grounds that there was no serious issue to be tried since the claim was time barred under the Limitation Act 1980 (“the Act”). This was the issue considered by the Supreme Court.
A majority of their Lordships found:
- that a stranger to a trust, such as the CBN was alleged to be, is not a trustee for the purposes of section 21(1)(a) of the Act;
- that an action “in respect of” any fraud or fraudulent breach of trust to which the trustee was party or privy did not include an action against a party such as the CBN, which is not itself a trustee; and
- accordingly, a party alleged to have been an accessory to a fraudulent breach of trust is not prohibited from relying on a statutory limitation defence by section 21 of the Act.
The Supreme Court held that there was no serious issue to be tried and held that English Courts had no jurisdiction to hear and determine the claim.
BLP’s win in the Supreme Court has brought clarity to almost a century of conflicting case law on this limitation point. Although superficially a technical point of law, the judgment has very real practical implications: it is now clear that a claimant cannot bring claims against alleged accessories to breaches of trust more than six years after the relevant event (in this case the events complained of allegedly happened almost 25 years ago) to the clear prejudice of a defendant whose personnel may have changed or records destroyed.
The Supreme Court’s decision marks the successful culmination of four years of jurisdictional challenges led by BLP on the CBN’s behalf and affirms the purpose of and policy behind the Limitation Act.