Patel v Mirza
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE RIMER
- LORD JUSTICE VOS
Areas of Law
- Contract Law
- Tort Law
- Criminal Law and Procedure
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
Chandrakant Patel appealed the dismissal of his claim for the return of £620,000 paid under an illegal agreement for insider trading, arguing he didn't rely on the illegality and shouldn't be barred from recovery. The appeal was allowed, with the court holding that since the illegal purpose was unachieved, Patel was entitled to recovery without proving repentance.
Judgment
Lord Justice Rimer :
The appellant is Chandrakant Patel, the claimant. The respondent is Salman Mirza, the defendant. Mr Patel’s appeal is against an order made on 5 July 2013 by David Donaldson QC, sitting as a Deputy High Court Judge in the Chancery Division, dismissing his claim for the repayment of £620,000 he had paid Mr Mirza between September and December 2009. On Mr Patel’s own case, he had paid the money to Mr Mirza for the purposes of an illegal agreement for insider dealing in shares in Royal Bank of Scotland Plc (‘RBS’). In the event, the agreement could not be and was not carried out because the expected inside information was not forthcoming, but the judge held that Mr Patel’s claim was still barred by illegality. The position would, the judge held, have been different if Mr Patel had withdrawn from the agreement before its implementation became frustrated, but he had not.
Mr Shepherd QC, for Mr Patel, submitted that (i) the judge was wrong to find that Mr Patel needed to rely on any illegality in making his claim; and (ii) the fact he had not withdrawn from the agreement before its performance was frustrated was also no bar to his claim. Mr McCormick QC and Mr Sadiq, for Mr Mirza, submitted that the judge’s order was correct.
The facts
George Georgiou was, until the financial crisis of 2008, a successful and wealthy property investor and dealer, although his fortunes then declined and he was adjudicated bankrupt in 2010. Mr Patel, also a wealthy man, became friends with Mr Georgiou in about 2004. They clubbed and socialised together. Mr Patel bought properties from Mr Georgiou and also offered Georgiou properties to friends, for which he received a commission. Mr Patel had a desk in Mr Georgiou’s Ilford office.
Mr Mirza was employed by Tullett Prebon Plc as a foreign exchange broker. He also had a personal spread-betting account with IG Index. He and Mr Georgiou had known each other since they were teenagers. Mr Mirza made at least two loans to Mr Georgiou.
Mr Patel and Mr Mirza first met at Mr Georgiou’s house at about the end of 2008 at one of Mr Georgiou’s Friday poker evenings. Mr Patel sought thereafter to interest Mr Mirza in buying cars and watches that he was able to source at a large discount.
In August 2009, Mr Georgiou told Mr Patel of a deal offered by Mr Mirza involving the use of Mr Mirza’s spread-betting account to bet on the movement of RBS shares. The claimed beauty of the deal was that Mr Mirza knew people