CHAN. 1999 0787/3
IN RE:  SUPREME COURT OF JUDICATURE 				
COURT OF APPEAL (CIVIL DIVISION)					
ON APPEAL FROM THE CHANCERY DIVISION			
THE HON. MR JUSTICE RIMER
Royal Courts Of Justice 
Strand, London, WC2A 2 LL

Tuesday 9th May 2000
Before:

 	THE VICE-CHANCELLOR:  	The Rt. Hon.  Sir Richard Scott
						The Rt. Hon. Lord Justice Buxton
						The Hon. Mr Justice Gage 
B E T W E E N

	TRUSTOR AB (A SWEDISH LTD COMPANY)
	Applicant	
	- and -
		
	LINDSAY JAMES TREVOR SMALLBONE AND OTHERS	Respondent	

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040,  Fax No:  0171 831 8838
Official Shorthand Writers to the Court)
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Mr S. Smith  instructed by Allen and Overy, Solicitors for the Applicant
Mr R. Hollington QC instructed by Charles Buckley, Solicitor for the Respondent

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Judgment
As Approved by the Court

Crown Copyright ©

The Vice-Chancellor:- 
The Litigation
1.	There is an appeal and a cross-appeal before us from the judgment of Rimer J., given on 25 June 1999.
2.	The claimant, Trustor A.B., is a company incorporated in Sweden.  At the time when the events which have given rise to this litigation began it was a holding company with investments in the steel, engineering and automotive parts industries.  Its share capital consisted of A shares and B share.  The A shares and B shares had equal capital value but the A shares carried 10 votes per shares, the B shares 1 vote per share.  Whoever held or controlled the A shares had control of Trustor.
3.	In June 1997 Lord Moyne purchased the A shares from a Mr Norberg.  The purchase price was SEK 241 (some £19 million at the rate of exchange of SEK 12.5 to the £, a rate which, for convenience, has been applied to all SEK figures in the litigation).  Following Lord Moyne’s acquisition of the A shares the board of directors of Trustor was reorganised.  Lord Moyne became chairman and an associate of his, Mr Smallbone, became managing director.
4.	A new bank account was then opened for Trustor at Barclays Bank, Cheapside branch, and about SEK 770 million (£61.6 million) of Trustor’s money was transferred into that account.  The opening of the account had been arranged by Lord Moyne and Mr Smallbone.  No authority to do so had been given by Trustor’s board of directors.  Withdrawals from the account required, under the bank mandate that was given, the signatures of any two Trustor directors.  But the only approved signatures on the mandate were those of Lord Moyne and Mr Smallbone.  Of the SEK 770 million transferred into the Barclays account about SEK 486 million (£38.88 million) was paid out under the joint signatures of Lord Moyne and Mr Smallbone without the authority of the Trustor board.  The action in which the order of Rimer J was made was brought by Trustor against a number of defendants into whose hands the £38.8 million, or part of it, had come, or through whose hands the money had passed.
5.	The first defendant is Mr Smallbone himself.  The second defendant is a company, Introcom (International) Ltd, incorporated in Gibraltar.  It is owned and controlled by Mr Smallbone via a Liechtenstein trust.  The third and fourth defendants are Guinness Management Ltd (GML) and M&A Financial Services Ltd (M&A).  GML and M&A were companies of which Lord Moyne and Mr Smallbone were directors.  M&A was Mr Smallbone’s company.  GML was a company the shares in which were, apparently, owned by a Lord Moyne trust.  The details regarding the ownership and control of GML and M&A do not matter for present purposes.  Nor is it necessary to identify any other of the eleven defendants.  Lord Moyne is not among them, although he was the recipient of a considerable amount of Trustor’s money.  Other action, to which I will refer later, has been taken by Trustor in relation to Lord Moyne.
6.	The relief claimed in the action against Mr Smallbone was a combination of, first, unquantified damages or compensation for conspiracy and breach of duty and, second, restitutionary relief in respect of the specific misappropriations that he had personally received.  Against the other defendants the remedies claimed were restitutionary, based upon their receipt of Trustor money with knowledge, imputed to them via one or other of  Lord Moyne and Mr Smallbone, of the impropriety of the payments to them.
7.	In considering the issues raised by this appeal it is necessary, in my opinion, to keep in mind the distinction between the unquantified damages claims against Mr Smallbone - and also Lord Moyne, although not made in this action - the remedy for which, if  proved, would be damages for loss caused by the wrongful act or omission in question, on the one hand, and, on the other hand, the restitutionary claims, under which an obligation to account for and repay Trustor’s money actually received would, if the claims can be established, be the remedy.
8.	On 3 June 1998 Trustor made an application under RSC Order 14 for summary judgment against Introcom.  The basis on which this application was made was that money belonging to Trustor amounting in total to about £20,285,000, consisting of SEK 166.7 million, FIM 70.45 million and £404,000, had been paid to Introcom out of Trustor’s Barclays, Cheapside account without the authority of Trustor’s board.  The money had been paid into an account opened for Introcom with Barclays Bank, also at the Cheapside branch.  Introcom had paid out most of this money but, after a freezing injunction had been granted ex parte on 16 March 1998 and confirmed inter partes on 1 April 1998, Introcom disclosed that on 2 April 1998 there still remained £529,052 in the bank account.
9.	On 13 August 1998 Master Bowman ordered Introcom to pay over to Trustor the balance still standing to its credit in its Barclays bank account.  The further hearing of the Order 14 application was stood over.  The £529,052 had been reduced since 2 April by living expenses and legal expenses which the injunction had permitted Mr Smallbone to draw from the account and what was left, £361,000, was paid over to Trustor under the 13 August 1998 order.
10.	On 13 October 1998 Master Bowman completed the hearing of the Order 14 application against Introcom.  He ordered Introcom, after credit had been given for the money paid over under the 13 August 1998 order, to pay Trustor the SEK 166.7 million, FIM 70.45 million and £404,000 that it had received from Trustor.  Introcom appealed against this order.
11.	In the meantime Trustor had made an Order 14 application against Mr Smallbone, GML and M&A.  The claims against GML and M&A were based upon the sums of  Trustor money that those companies had received from Trustor’s Barclays, Cheapside, account.  In the period August to October 1997, GML had received £1,699,977 odd and SEK 2 million (totalling about £1.86 million).  In the period July to August 1997 M&A had received £32,500 and SEK 1,425,792 (totalling about £146,563).  Trustor was seeking summary judgment for repayment of these sums.  The summary judgment claim against Mr Smallbone was based on allegations of breach of duty on his part in causing or permitting the £38.88 million to be paid out of Trustor’s Barclays, Cheapside, account.  Some part of these funds had found their way, via Introcom, to Mr Smallbone personally.  After allowance had been made for £33,334 in respect of director’s remuneration to which, it was accepted, Mr Smallbone was entitled, the balance of the Trustor money he had received was £426,439.  So Trustor was seeking summary judgment for repayment of the £426,439, final judgment for damages to be assessed and an interim payment in respect of the damages.
12.	Introcom’s appeal against Master Bowman’s Order of 13 October 1998 and Trustor’s Order 14 application against Mr Smallbone, GML and M&A came on together before Rimer J. in March 1999.  The hearing took several days.  Rimer J. handed down his reserved judgment on 25 June 1999.
13.	He held, in effect, that none of the four defendants had any defence on liability.  Introcom, GML, M&A and Mr Smallbone were each liable to account to Trustor for the amount of Trustor money that each had received.
14.	As to the payments made to Introcom, Rimer J. said this:-
	“In my judgment, not a penny which was paid to Introcom was paid lawfully.  The money which Mr Smallbone procured to be paid to it was paid without authority and in breach of the duties he owed Trustor as its managing director.  Introcom must be treated as knowing that and anyway received the money as volunteer.  The payments were not binding on Trustor and in principle it ought to be entitled to recover the money so paid” (pp.19/20).
15.	He held, however, that Introcom had arguable defences as to the amount of the money that it should be ordered to repay.  I will describe these defences later.  So Rimer J. set aside the 13 October 1998 order for payment and substituted an order that Trustor have final judgment against Introcom in the sum of £1 million (in addition to the sums paid under the 13 August 1998 order), together with a further sum in respect of interest.  The question whether Trustor was entitled to any additional payment from Introcom was to await trial.
16.	As to the liability of Mr Smallbone, GML and M&A, Rimer J ordered them to pay to Trustor the sums they had respectively received, that is to say, £426,439 (Mr Smallbone), £1.7 million odd and SEK 2 million (GML) and £146,563 (M&A), together, in each case, with interest.  He also gave Trustor final judgment against Mr Smallbone for damages/compensation to be assessed, and ordered Mr Smallbone to make an interim payment of £1 million together with interest.  Mr Smallbone had relied on the same defences as to the amount of his liability as had been relied on by Introcom.  The validity of these, the judge held, had to be decided at trial.
17.	Both in respect of the claim against Introcom and in respect of the claim against Mr Smallbone the success achieved by Trustor on its Order 14 applications was substantially less than it had sought.  Trustor had argued that the defences relied on that had induced the judge to limit the extent of the recovery that Trustor could obtain under its summary judgment applications were insubstantial or misconceived.  However, the judge gave Trustor permission to appeal and Trustor has done so.
18.	Mr Smallbone and Introcom, too, asked for permission to appeal.  Rimer J. refused permission.  They renewed their applications for permission to this court and, by an order of 5 November 1999, it was directed that the applications be dealt with on the hearing of Trustor’s appeal with the defendants’ appeals to follow if permission were granted.
19.	Before the judge Mr Smallbone appeared in person and, according to the cover sheet of the judgment, Introcom, GML and M&A were unrepresented. I imagine that, in reality, Mr Smallbone was representing Introcom as well as himself.  Perhaps he was representing GML and M&A as well.  Before us Mr Robin Hollington Q.C. has represented Mr Smallbone and Mr Smallbone has addressed us on behalf of Introcom.  He produced a written authority from the Board of Introcom authorising him to do so.
20.	GML and M&A have not been represented before us.  There is, therefore, no application before us by either GML or M&A for permission to appeal.  The only live applications are those by Mr Smallbone and Introcom.
The Defences
21.	No argument has been put before us, unlike Rimer J., challenging the conclusion that the circumstances in which the £38.88 million left Trustor’s Barclays, Cheapside, account constituted an unlawful misappropriation of Trustor’s money made without authority from Trustor’s board of directors and a breach of duty by Mr Smallbone.  As to this, Rimer J said, at p. 37 of his judgment:-
	“Trustor’s claim in this respect is, in principle, ... unanswerable ...”.  
The arguments put before us by Mr Hollington, on behalf of Mr Smallbone, have been directed solely to the amount of the damages or compensation for breach of duty that Mr Smallbone can properly be ordered to pay now.
22.	As to the restitutionary claims made against Mr Smallbone and Introcom, it has not been argued that the judge was wrong, in principle, in concluding that Mr Smallbone and Introcom were accountable for the sums of Trustor money that they had respectively received.  What has been said, however, is that other recoveries made by Trustor must be taken into account and that the amount Mr Smallbone and Introcom are liable to pay may, in the end, be nil.  At the least, it is submitted, the amount of their liability is at present too uncertain to justify  any immediate order for payment.
23.	There are four matters, in particular, that are relied on.  Before I describe them, however, I should deal with an application made on behalf of Mr Smallbone and Introcom for additional evidence, not before Rimer J, to be allowed to be placed before us.  The additional evidence consists of an affidavit sworn by Mr Smallbone on 11 November 1999 with a number of exhibits, a witness statement in answer dated 17 December 1999 by Mr Guy Wilkes, a solicitor with Allen & Overy, and, finally a witness statement by Mr Smallbone in response dated 13 January 2000.  This evidence, for the most part, endeavours to bring up to date the attempts made by Trustor to make recoveries from Lord Moyne.
24.	In my opinion we should admit this additional evidence.  The extent of the recoveries made by Trustor from Lord Moyne and others are obviously of relevance to the extent of the summary judgment relief that Trustor can be awarded against Mr Smallbone and Introcom.  Trustor cannot recover the same sum twice.  The additional material is not material that the defendants could reasonably have been expected to have placed before Rimer J.  So I would admit the additional evidence.
25.	I must now describe the alleged recoveries and other matters on which Mr Smallbone and Introcom rely as off-sets against their own liability.
	1. The SEK 417 million
26.	Lord Moyne had an account with Lanschot Bank in Luxembourg.  Trustor, too, had an account with Lanschot Bank.  On 6 November 1997 Lord Moyne transferred the sum of SEK 417 million (£33.6 million) from his account to Trustor’s account.  Trustor’s auditors were informed that this had been done and they informed Trustor’s board.  On 7 November 1997 a Trustor board meeting took place in Stockholm.  Lord Moyne and Mr Smallbone were recorded in the Minutes as being present “by telephone”.  The Minutes contain the following relevant passage:-
	“It was decided that all monies held in foreign bank accounts should be brought back to the company’s bank accounts in Swedish banks as soon as possible.  Lord Moyne mentioned that there might be certain restrictions”.
27.	It is worth noting that at this board meeting Mr Smallbone “confirmed that no monies are missing from the company’s bank accounts”  The Minutes of this board meeting record, also, that Mr Smallbone was replaced by Mr Bjornsson as Trustor’s managing director.
28.	The decision calling for re-patriation of monies held in foreign bank accounts applied, obviously, to the money held in Trustor’s Barclays, Cheapside, account.  It also appeared to apply to the SEK 417 million that had been credited to the Lanschot Bank, Luxembourg, account.  And by a letter dated 7 November 1997, signed by Mr Bjornsson, the new managing director, Trustor instructed Lanschot Bank to transfer the SEK 417 million to Trustor’s account with Skandinaviska Enskilda Bank, Stockholm.  By a letter to Trustor dated 20 November 1997 Lord Moyne confirmed that the SEK 417 million paid into Trustor’s Lanschot Bank account was:-
“to cover any outstanding balances due from Introcom ... with any surplus to cover the account of Thomas Jisander which I understand were held at Barclays Bank in London.  These monies paid to you were strictly as a repayment and are not any form of unsecured or repayable loan”.
29.     Lanschot Bank did not comply with the instruction given by the letter of 7 November.  The reason it did not is that it received a claim to the SEK 417 million from International Trade and Credit Bank Ltd (ITCB).  ITCB is a bank incorporated in the Cayman Islands.  On 19 November 1997 ITCB lodged at the Luxembourg District Court a petition asking, among other things, for the SEK 417 million to be made the subject of a sequestration order and protected until the claim of ITCB to the money had been adjudicated upon.
30.    ITCB’s case, as set out in a letter dated 23 December 1997 from its directors to the Luxembourg public prosecutor, was, in summary, as follows.  Lord Moyne had represented to ITCB that Trustor intended to purchase a block of shares in a U.S. company called Bancorp.  He represented that he, Lord Moyne, was the owner of the Bancorp shares, having acquired them by means of a loan from Trustor.  He told ITCB that the loan from Trustor had to be repaid and the Bancorp shares re-sold to Trustor.  So he asked ITCB to make him a bridging loan of SEK 417 million for two days.  In those two days, four steps were to be taken.  First, ITCB was to make a loan to Lord Moyne of SEK 417 million.  Second, Lord Moyne was to pay that sum to Trustor in repayment of the loan from Trustor.  Third, Trustor was to purchase the Bancorp shares from Lord Moyne for the SEK 417 million.  Finally, Lord Moyne was to repay ITCB the SEK 417 million loan.  These steps were to be carried out on 6 and 7 November using the parties’ accounts at Lanschot Bank.  The ITCB letter said that at a meeting on 5 November in the offices of Lanschot Bank the requisite four transfer orders were signed and lodged with the Bank.  The transfer order relating to the payment of SEK 417 million from Trustor to Lord Moyne (the third step) was signed by Lord Moyne on Trustor’s behalf under a proxy which had been signed by himself and Mr Smallbone as directors for Trustor.  The first two steps were carried out.  ITCB paid the SEK 417 million to Lord Moyne and Lord Moyne paid the sum to Trustor.  But the 7 November 1997 letter from Trustor to Lanschot Bank had, as it would have appeared to the Bank, countermanded the transfer order purportedly signed on Trustor’s behalf by Lord Moyne and frustrated the third step of the arrangement.  As the third step did not take place, the fourth step, the repayment by Lord Moyne of the SEK 417 million loan from ITCB, did not take place either.
31.     ITCB’s letter of 23 December referred to the inconsistency between the transfer order signed by Lord Moyne on 5 November and the instructions to Lanschot Bank given by Trustor on 7 November (the letter referred inaccurately to 6 November) and submitted that:-
	“It is established beyond doubt that it was not the intention of Lord Moyne and/or Trustor that the funds should be repaid to ITC Bank within two days, as fraudulently misrepresented to ITC Bank”.
The letter concluded by saying that:-
	“For the above reasons, ITC Bank herewith files a criminal complaint against unknown for fraud ... according to article 486 of the Luxembourg Criminal Code”.	
32.	As a result of ITCB’s petition to the Luxembourg Court, the SEK 417 million in Trustor’s Lanschot Bank Account was sequestrated.  It will remain sequestrated until the issues are resolved in the Luxembourg Courts.  And the rival claims by ITCB and Trustor to the money cannot be dealt with until ITCB’s criminal complaint has been disposed of.
33.     Mr Hollington has argued before us, as Mr Smallbone had argued before Rimer J., that the SEK 417 million had been paid to and accepted by Trustor, as evidenced by the instructions given by Trustor to Lanschot Bank on 7 November.  Lord Moyne’s intention,  evidenced by his letter of 20 November, was to repay to Trustor sums due from Introcom and Thomas Jisander.  Thomas Jisander is the 5th defendant in the action.  Very substantial sums, had been received by Thomas Jisander out of Trustor’s Barclays, Cheapside, account.  So although the repayment from the SEK 417 million of the sums transferred from Trustor to Introcom would have left a balance of about SEK 163.4 million, there would have been nothing left if the balance had been set against the sums alleged to be repayable by Thomas Jisander.  There is no doubt that the letter of 20 November indicated Lord Moyne’s intention that the whole of the SEK 417 million should be applied by Trustor in discharge or part discharge of its claims arising out of the payments made from its Barclays, Cheapside, account.
34.     Trustor is resisting the claim to the SEK 417 million which has been put forward by ITCB and, points out Mr Hollington, it may be that at the end of the day Trustor will have succeeded in establishing its prior claim to the money.  So, it is submitted, at this summary judgment stage the defendants must be allowed to bring into account the SEK 417 million as a recovery Trustor has made.  If the SEK 417 million is brought into account the shortfall in recovery by Trustor of the money unlawfully paid out of its Barclays, Cheapside, account is reduced from £38.88 million to about £5.52 million.  That lower figure should, it is submitted, be treated as the maximum that Trustor can recover under its applications for summary judgment.
35.	Rimer J. accepted this argument.
	2. The Moyne Shares
36.	Money was paid to Lord Moyne  out of the Trustor funds that had been transferred to Introcom from Trustor’s Barclays Bank, Cheapside, account.  Rimer J. refers to payments of SEK 115 million on 2 July 1997 and £145,000 on 15 August 1997.  Substantial sums were also paid to Mr Thomas Jisander both by Introcom and also direct from Trustor’s account.  Mr Jisander made substantial payments to Lord Moyne.  The relevance of these payments is the judge’s finding that:-
	“Lord Moyne appears to have used part of the money paid to him to pay Mr Norberg for his Trustor shares which is as unlawful under Swedish law as it is under English law”.
37.	Before Rimer J. it was argued that Trustor was likely to succeed in recovering Lord Moyne’s Trustor shares, or their value.  Mr Smallbone put their value at about SEK 200 million (£16 million).  But the judge said that since Trustor had not yet achieved any recovery against Lord Moyne, or in respect of his Trustor shares, Trustor’s claims in that regard should be left out of account in considering the amount that Mr Smallbone and Introcom should be ordered to pay on the summary judgment applications (p. 25).
38.	The additional evidence before us casts a good deal more light on Trustor’s claims against Lord Moyne than was available before the judge.
39.	Lord Moyne appears to have placed some of the Trustor shares in the name of a Swedish company which he owned and controlled, Lord Moyne Holding A.B., and kept some in his own name.  Following the discovery by the other directors of Trustor of the misappropriation of the SEK 486 million and the investigation into the circumstances in which this had happened and into what had become of the money, Trustor,  on 25 December 1998, was put into compulsory liquidation.  Trustor was certainly not insolvent.  The liquidation appears to have been requested by minority shareholders (see p. 6 of Trustor’s Directors Report for 1998).  
40.	In November 1997 a number of Trustor shareholders had made damages claims in Sweden against Lord Moyne and Lord Moyne Holding A.B. and had obtained orders sequestrating their respective assets.  Similar claims were made by Trustor itself in December 1997 and Trustor, too, was granted sequestration orders (see page 7 of  the 1998 Directors’ Report).  The sequestrated assets included all the shares in Trustor that Lord Moyne had acquired.  
41.	According to the 1998 Directors’ Report:-
	“Trustor asked the court to declare Lord Moyne bankrupt, based on Trustor’s claims against him following his improper actions against Trustor ...  The District Court granted the application and the Court of Appeal did not accede to Lord Moyne’s appeal.  Lord Moyne has since appealed to the Supreme Court ...”.
The 1998 Report went on to note that the Trustor shares “formed part of the bankruptcy” and commented that “... according to the bankruptcy rules Trustor is entitled to receive payment from these shares for any claim Trustor may have against Lord Moyne, provided that the bankruptcy is confirmed” (p. 8).
42.	Lord Moyne’s receiver in bankruptcy then took steps to have Lord Moyne Holdings A.B. wound up.  The Report commented that “... according to the bankruptcy regulations, Trustor is entitled to receive payment from the Trustor shares for any claim for damages that Trustor may have against Lord Moyne Holding A.B.”.  (p. 8).
43.	I should refer also to the liquidator of Trustor’s half yearly Report, 1 January to 30 June 1999.  This Report records that the Swedish Supreme Court rejected Lord Moyne’s request for a re-hearing of the bankruptcy application.  His bankruptcy was accordingly confirmed.  The exhibits to Mr Smallbone’s affidavit of 11 November 1999 include a letter dated 8 June 1999 to Lord Moyne from his solicitors in Sweden informing him that “the bankruptcy stands and all the shares registered on you will be sold and the money will be transferred to your creditors i.e. Trustor”.
44.	Mr Wilkes, in paragraph 3 of his witness statement, says this about the sale of the Trustor shares:-
	“I am instructed by [the] liquidators of Trustor, that Trustor has reached agreement with the Receiver of Lord Moyne and Lord Moyne Holding A.B.  As part of the agreement, Trustor was able to purchase for a cash sum:
	(i)	all of Lord Moyne’s shares in Trustor:
	(ii)	Lord Moyne’s shares in Lord Moyne Holding A.B. ((i.e.) the entire share capital).
	The only substantial asset of Lord Moyne Holding A.B. is a substantial number of shares in Trustor.  Its shares in Trustor remain with Lord Moyne Holding A.B.”.
45.	Mr Wilkes went on to say that the precise terms of the agreement with the receiver were confidential and price sensitive.  In paragraph 7 he said “the Receiver’s agreement to sell the shares to Trustor [has] not yet extinguished the liability of Lord Moyne or Lord Moyne Holding A.B. to Trustor”.  As to Lord Moyne Holding A.B., Mr Wilkes drew attention to the oddity of the position.  Trustor had become, under the agreement with the receiver, the sole shareholder of Lord Moyne Holding A.B., whose only substantial asset was shares in Trustor and whose only, or main, creditor was Trustor by virtue of its damages claim.
46.	The position, therefore, seems to be that Trustor has acquired from Lord Moyne’s receiver in bankruptcy (a) the Trustor shares held by Lord Moyne and (b) the shares in Lord Moyne Holding A.B. whose only asset is its Trustor shares.  Trustor appears to have paid a cash consideration the amount of which, for commercial reasons, it is not willing to disclose.  In due course Trustor will become entitled to a dividend in Lord Moyne’s bankruptcy and a dividend in the winding up of Lord Moyne Holding A.B.
47.	Mr Hollington has submitted that, in effect, Trustor has recovered all the Trustor shares purchased by Lord Moyne and must give credit for their value in its recovery claims against the defendants in this action.
		3.  The Section 5 Point
48.	It is submitted on behalf of Mr Smallbone and Introcom that a statutory remedy, available to Trustor against Lord Moyne under section 5 of the Swedish Companies Act, must be exhausted before recovery can be made against others.
49.	Section 5 is in the following terms:-
	“ Where a payment has been made to a shareholder in contravention of this Act, the payee shall repay the amount together with interest thereon ... Where payment has been made in the form of a dividend the payee is liable to repayment only provided the company proves that he realised or should have realised that the payment was made in contravention of this Act.  The persons who took part in the resolution regarding the payment or its implementation or in the preparation of the adoption of an incorrect balance sheet serving as the basis for the resolution, shall be liable pursuant to Chapter 15,  sections 1 to 4, for any deficiency in the amount of the repayment”.
50.	At p. 27 of his judgment, Rimer J summed up the argument being put to him:-
	“Mr Smallbone’s case is that, at any rate as regards those moneys which were paid to Lord Moyne (a shareholder of Trustor) via Introcom, that section shows that Trustor must exhaust its recovery remedies against Lord Moyne first, and can only look to him and others involved in the resolution for, or implementation of, the Moyne payments (which would include Introcom) for any deficiency”.
51.	Rimer J., expressed the opinion that a summary judgment application was not the right occasion to give a conclusive answer as to the effect of section 5 on Trustor’s claims in the action in England.  He went on, however, to conclude that the section 5 argument “... can in principle present no hurdle with regard to the recovery of the sums of money which Introcom itself retained or which it paid to persons other than Lord Moyne”.
52.	He expressed the same opinion with regard to Trustor’s claim to recover the £426,439 retained by Mr Smallbone.
	4. Mr Smallbone’s Additional Point
53.	An additional point relied on before us, but not before Rimer J., was based on the contents of Mr Smallbone’s affidavit sworn on 11 November 1999.
54.	In paragraph 12 of the affidavit Mr Smallbone said that Trustor had frozen some SEK 42 million (£3.4 million) held for the account of Mr Thomas Jisander and his companies.  He said that Mr Jisander was disputing Trustor’s claim, contending that the sum was due to him (Mr Jisander) for services rendered to and work done for Trustor.  Mr Smallbone argues that either Mr Jisander’s claim is good, in which case the money was properly paid to him and should be deducted from the amount recoverable by Trustor, or, alternatively, Mr Jisander’s claim will fail, in which case the money will sooner or later be released to Trustor.
55.	Mr Wilkes’ response, in his witness statement of 17 December 1999, pointed out that the money had been frozen by the Liechtenstein and Swiss criminal authorities, not by Trustor.  Trustor, he said, had not commenced any proceedings in either Liechtenstein or Switzerland in respect of this money.  No recovery in respect of the SEK 42 million had yet been made by Trustor.

General Approach
56.	It is necessary for us, on this appeal, to decide what, if any, impact these points should have on the orders that can properly be made in favour of Trustor at this stage in the litigation.  Let me start by trying to analyse more closely than I have yet done the nature of Trustor’s claims.
57.	As against Mr Smallbone, Trustor has two types of claim.  First, Trustor has a claim against him for breach of duty.  This is a claim which is plainly governed by Swedish law.  Trustor is a Swedish company.  Mr Smallbone was its managing director.  The consequences of his actions and omissions in breach of his obligations to Trustor in that capacity must be determined by Swedish law.
58.	Second, Trustor has claims based upon what happened to its money, the SEK 770 million that found its way into the bank account that had been opened in its name at Barclays Bank, Cheapside.  Whether or not the SEK 770 million was transferred there with the authority of the Trustor board, the money, while in that account, was still standing in Trustor’s name.  No misappropriation had yet taken place. SEK 486 million (£38.88 million) that was paid out from that account has not yet been recovered.  Most of  this had been paid out to Introcom but some had been paid direct to others.  All these payments were made without the authority of the Trustor board.  That that was so was disputed before Rimer J., was so held by him and has not been disputed before us.  The impropriety of the payments was known to the recipients.  That, too, has not been disputed before us.
59.	The payments made to Introcom were made from Trustor’s account in England to Introcom’s account in England.  The consequences of these payments, in an English court at least, are therefore to be determined by English law.
60.	Under English law the owner of the moneys, Trustor, is entitled to restitutionary remedies.  Trustor’s remedy to recover the money still held in Introcom’s account was a straightforward common law remedy for money had and received.  The remedy was given effect to by Master Bowman’s Order of 13 August 1998.  There is no challenge to that order.
61.	In addition, Trustor is entitled, under English law, to treat Introcom as a constructive trustee of the money it received from the Trustor account.  There is, in my opinion, no conflict of laws problem about this.  The money was both paid and received in England.  So the proper law of the constructive trust is the law of England (see Rule 200(1)(c), Dicey’s Conflict of Laws, 13th Ed., p. 1485).  Introcom, the constructive trustee, paid some of the money to Mr Smallbone.  Mr Smallbone, of course, had knowledge of all the relevant facts.  Indeed, it is through Mr Smallbone that the requisite knowledge of the impropriety of the payments from the Trustor account is properly to be imputed to Introcom.  It follows, in my judgment, that Mr Smallbone, in turn, became a constructive trustee of the Trustor money received via Introcom.  Here, again, in my opinion, no conflict of laws problem arises.  The instruction for the payment of the  money from Introcom to Mr Smallbone was given in England and acted on in England in relation to money in England.  Under English law Mr Smallbone became, in my judgment, a constructive trustee of the money paid to him wherever it was paid.  
62.	As the judge remarked (at p. 34 of his judgment), there was no clear evidence as to where Mr Smallbone received the money. But the judge relied on the unreported judgment of Chadwick J., given on 15 June 1994, in The Arab Monetary Fund -v- Hashim and the unreported judgment of Moore-Bick J., given on 16 November 1998, in Kuwait Oil Tanker Company -v- Abdul Fattah Sulaiman Kaled Al Buder, and concluded that Mr Smallbone held the money received from Introcom as a constructive trustee.  I agree with the judge’s reasoning although I do not think it was strictly necessary.  He considered the conflict of laws question and the application of Rule 200(1)(c) on the footing that a free-standing constructive trust under which Mr Smallbone was the trustee came into existence as a result of his receipt of the money from Introcom.  A simpler approach, justified by the facts of this case,  is to treat Mr Smallbone as holding the money under the constructive trust which came into existence upon Introcom’s receipt of the money from Trustor.  The proper law of that constructive trust is, in my opinion, unquestionably English law.  Mr Smallbone cannot, in my judgment, possibly contend that his receipt of the money from Introcom placed him in any better position than Introcom.  It is not, in my opinion, necessary that a separate constructive trust should have come into existence on Mr Smallbone’s receipt of the money.  The conflict of laws difficulties considered by Chadwick J. and Moore-Bick J. in the two cases referred to by the judge do not, in my judgment, arise in the present case.
63.	It must be borne in mind, however, that Trustor’s restititutionary remedies are restitutionary.  There can be no double recovery.  The form of order made should be such as to ensure that there is no double recovery.  I do not think there is any particular difficulty in devising an order which would prevent any double recovery.  Let me try and illustrate what I have in mind.
64.	Introcom receives £20 million, say, from Trustor.  It holds that £20 million as constructive trustee and is accountable to Trustor for it.  Introcom pays £10 million of the £20 million to A, £5 million to B and £5 million to C.  Each of A, B and C has notice that it is Trustor’s money, is a constructive trustee of the sum he has received, and is accountable to Trustor accordingly.  In these circumstances Trustor is, in my view, entitled:-
	(a)	to an order against Introcom and A for the repayment of £10 million;
	(b)	to an order against Introcom and B for the repayment of £5 million; and
	(c)	to an order against Introcom and C for the repayment of £5 million.
65.	In respect of each order, the position is no different from the position where any order is made requiring payment of a specified sum by two defendants who are jointly and severally liable.  Any payment made by either discharges, pro tanto, the other.  The claimant can enforce the order against either or both, but can never recover more than the specified sum.  Any question of contribution between the two defendants is a matter for them and no concern of the claimant.
66.	The position is, in my judgment, the same in the present case.  All the Trustor money received by Mr Smallbone came to  him via  Introcom and is money for which Introcom is accountable to Trustor.  As to £426,439, Introcom and Mr Smallbone are jointly and severally accountable.  As to the money received by GML, Introcom and GML are jointly and severally accountable.  As to the money received by M&A, Introcom and M&A are jointly and severally accountable.  
67.	Mr Smallbone’s liability for damages for breach of duty, on the other hand, is nothing to do with restitution and nothing to do with accountability.  It is to do with loss.  Trustor’s recoverable loss caused by Mr Smallbone’s breach of duty must be assessed.    Trustor’s breach of duty claim is, as I have said, governed by the law of Sweden.  But the quantification of loss is, in a non-contractual damages action, governed by the lex fori,  English law (see Dicey, 13th ed. para. 7-034).  In assessing its loss recoverable from Mr Smallbone Trustor must bring into account its recoveries.  As to recoveries not yet achieved but that might be achieved in the future, there are two alternatives.  Either a value must be placed on the potential recovery, with the value being brought into account, or the assessment must be adjourned, pending the completion of the recovery processes that the claimant is engaged in.  It is always open to a defendant in a damages for loss claim to take a failure to mitigate damages point if a claimant abandons or does not pursue a potential recovery.
68.	I will in a moment deal with the four matters that are expressly in issue on this appeal.  The judge treated them, or treated the three that were before him, as matters to be dealt with at trial (see eg. pp. 24, 26, 32).  I do not think this is strictly accurate.  A trial, in the ordinary sense, is no longer necessary.  The liability of Mr Smallbone, Introcom, GML and M&A to Trustor was held by Rimer J. to be established.  There is no outstanding substantive issue on liability.  The outstanding issues are all issues of quantification.  What is wanted, in my opinion is, in any event, (a) an inquiry as to the loss caused to Trustor by Mr Smallbone’s breach of duty and, perhaps, (b) an inquiry as to whether any, and if so what, part of the sums for which the respective defendants are accountable have been recovered from some other source.  But I would stress that for the purposes of inquiry (b), it is irrelevant that Trustor might have made, but has failed to make, recoveries from some other source.  Mitigation of damage points can be taken under inquiry (a) but can play no part under inquiry (b).
69.	I return, therefore, to the four issues that I have earlier in this judgment described.
	1. Has Trustor recovered the SEK 417 million?  
70.	Rimer J., regarded this as a triable issue.  But it is, in my judgment, clear that there has not yet been any effective recovery by Trustor of the SEK 417 million.  There has never been a time when the SEK 417 million has been at Trustor’s disposal.  It appears from the documents placed before the Luxembourg court that on 5 November the four transfer orders were lodged with Lanschot Bank.  Trustor was entitled to repudiate the transfer order purportedly signed by Lord Moyne on its behalf.  He had no authority from the Trustor board to sign the transfer order or to enter into the arrangement with ITCB.  But I do not understand how Trustor can claim the benefit of one part of the arrangement, namely, the payment into its Lanschot account of the SEK 417 million, but repudiate the rest.  It may be said, with some justification, that these are matters that must be determined under Luxembourg law, or perhaps the law of Sweden, and that the analysis and solution that the appropriate foreign law would arrive at are matters on which there is at present no evidence.  Nonetheless, the reaction of Lanschot Bank on receiving the new instructions given by Trustor’s letter of 7 November was to decline to accept them.  It is a very easy inference to draw that Lanschot, with whom all four transfer orders had been lodged, made the change of instructions known to ITCB.  Lanschot would have had no alternative but to do so, since ITCB was the beneficiary under the fourth transfer order which, together with the third, would be frustrated by the new instructions.
71.	So the conclusion is, in my judgment, justified that the SEK 417 million was never at the disposal of Trustor  and cannot be at Trustor’s disposal until the litigation in Luxembourg has concluded.
72.	In these circumstances can the mere fact of the payment of the money into Trustor’s account be treated as a pro tanto discharge of the liability of Mr Smallbone and Introcom?  In my judgment, it cannot.  If a debtor wishes by a payment to his creditor to discharge his liability, the debtor must, in my judgment, make such a payment as places the money at the disposal of the creditor.  I do not accept that a payment which does not comply with that simple criterion can operate as a discharge of the debt.  Nor can a creditor’s acceptance of the money made in ignorance of  incumbrances to which the money is subject alter this conclusion.  It must not be forgotten that, in the present case, Trustor is the victim and Mr Smallbone and Introcom are wrongdoers.  The proposition that a wrongdoer  can discharge his liability to his victim by  making a payment to the victim that the victim cannot for an indefinite period use or enjoy is too obviously unjust to be good law.  Mr Hollington could not, and to his credit did not really try to, argue that the result for which he was contending was fair to Trustor.  He simply said that it was a result required by the law.
73.	In my judgment, it is not.  Authority, as well as fairness, is against him.  In United Australia Ltd -v- Barclays Bank Ltd [1941] A.C.1. Lord Simon, at p. 21, said:-
	“What would be necessary to constitute a bar [to recovery] would be that, as a result of such judgment or otherwise, the appellants should have received satisfaction”.
	In Selangor United Rubber Estates -v- Cradock (No. 3) [1968] 1 WLR 1555 Ungoed-Thomas J., said, at p. 1651:-
	“Satisfaction must be true and real satisfaction and not part of what makes satisfaction a mockery”.
74.	So Mr Smallbone’s and Introcom’s liability as constructive trustees to account to Trustor for the sums they have  respectively received cannot, in my judgment, be reduced  by reliance on the SEK 417 million paid by ITCB into Trustor’s Lanschot bank account.
75.	On the other hand, for the purposes of the assessment of the loss caused to Trustor by Mr Smallbone’s breach of duty, the SEK 417 million can certainly be taken into account.  As I have said, either the assessment must be postponed until the issue between Trustor and ITCB has been resolved, or the judge who deals with the assessment must try and place a value on Trustor’s claim.  Which alternative should be chosen will be a matter for the decision of the judge who conducts the assessment made in the light of the submissions of the parties.
76.	If, eventually, Trustor should succeed in establishing against ITCB its prior claim to the SEK 417 million, and if the figures show that the restitutionary recoveries already made by Trustor plus the SEK 417 million exceed the sums necessary to make full restitution to Trustor of the money misappropriated from its Barclays, Cheapside, account with interest thereon, Trustor would not, under English law, be entitled to retain the excess.  I think this eventuality to be a highly unlikely one.  But if it did occur, the claimants to the excess would include Lord Moyne and ITCB.  I do not think they would include Mr Smallbone or Introcom, neither of whom has contributed any part of the SEK 417 million.
2. What is the effect of the recoveries made, or about to be made, against Lord Moyne and/or Lord Moyne Holding A.B. in Sweden?
77.	It seems to me reasonably clear that recoveries with a value of not more than the value of the Trustor shares purchased by Lord Moyne have been, or perhaps are about to be, made by Trustor in Sweden.  Trustor has declined to disclose all the details of the agreement it has come to with the receiver in Lord Moyne’s bankruptcy. In particular Trustor has not disclosed the amount of the cash consideration it gave for the Trustor shares which had been vested in Lord Moyne personally or for the shares in Lord Moyne Holding A.B.  It has been suggested by Mr Smallbone that the value of these recoveries achieved by Trustor may be in the region of SEK 200 million (£16 million).
78.	In my judgment, the value of these recoveries is irrelevant to the restitutionary claims made against Introcom or Mr Smallbone.  I would accept that Trustor cannot both retain the recoveries made in respect of the Trustor shares that were purchased with its money (SEK 241 million odd) and at the same time require those who received that money or through whose hands the money  passed to repay it.  The restitutionary remedy against the recipients of the money and the remedy against the shares that were acquired with the money are, in my opinion, genuinely alternative remedies.  In principle, Trustor can claim whichever provides for it the greatest return, but it cannot claim both remedies cumulatively  (see Tan Min Sit   -v- Capacious Investments Ltd [1996] A.C. 514).  But none of this is of any concern to Introcom.  None of the SEK 241 million came to Lord Moyne via  Introcom.  The figures and dates of the payments made to Introcom bear that out.  The share transaction was completed well before the first payment to Introcom - SEK 155 million on 2 July 1997.  Nor did any part of the SEK 241 million pass through Mr Smallbone’s hands.
79.	Accordingly, in my judgment, the value of these recoveries is irrelevant to the amount of the repayments for which Introcom and Mr Smallbone are respectively liable.
80.	On the other hand, the value of the recoveries is highly relevant to the amount of damages for loss that Trustor can claim from Mr Smallbone.  That value must be brought into account in assessing Trustor’s damages caused by Mr Smallbone’s breach of duty.
3. Are the recoveries that Trustor can claim now from Introcom and Mr Smallbone affected by Section 5 of the Swedish Companies Act?
81.	For the reasons I have given, English law is, in my opinion, the proper law of the constructive trust produced by the improper transfer of Trustor’s money to Introcom.  Introcom’s obligation under that constructive trust to account for the money and to repay is not, in my judgment, affected by section 5. The judge was prepared to assume in Introcom’s favour that section 5 presented an obstacle to recovery from Introcom of money it had paid on to Lord Moyne, a shareholder, but held that it presented no other obstacle to recovery from Introcom.  I would not be prepared to make that assumption.  Section 5 does not, in my opinion, affect the obligations owed by Introcom under the constructive trust that applied to the Trustor money it received.

4. The SEK 42 million held for the account of Mr Jisander or his companies.
82.	This sum has apparently been frozen.  There is no indication, however, that the sum derived from Introcom.  Even if it did, or if some part of it did, there is no evidence that it represents a recovery made by Trustor.  Trustor is, in my judgment, entitled to pursue its restitutionary remedies against Introcom without any deduction made on account of this SEK 42 million.
	The Result of this Appeal
	Introcom
83.	Introcom is, in my judgment, accountable to Trustor for the sums specified in paragraph 2 of Master Bowman’s order of 13 October 1998.  Rimer J set aside that paragraph because he thought that, pending trial, Trustor should bring the SEK 417 million in Lanschot Bank into account.  That sum does not, in my judgment, represent a recovery that Trustor has obtained.  Introcom’s liability to account for and repay the SEK 166,705,496, the £404,100 and the FIM 75,467,341.39 is not affected by the payment of SEK 417 million into Trustor’s Lanschot account.
84.	Rimer J. set aside also paragraphs 3 and 4 of Master Bowman’s order.  Paragraph 3 had  ordered an inquiry as to the assets Introcom had received from Trustor and what had been earned by those assets.  Trustor is entitled, in my judgment, to have that order restored.
85.	Paragraph 4 of Master Bowman’s order had ordered Introcom to pay Trustor equitable compensation to be assessed.  There is no doubt that Introcom, as a constructive trustee, was in breach of trust in making payments of the Trustor money to the various payees.  But what advantage there can be in claiming the assessment of equitable compensation for breach of trust as well as the relief asked for under paragraphs 2 and 3 I do not understand.  I would be prepared to re-instate paragraph 4 of Master Bowman’s order but on the understanding that if Trustor proceeds with the assessment it will be at its own risk as to costs if, in the end, there is no significant advantage in having done so.
86.	Rimer J., in paragraph 4 of the 25 June 1999 order made on Introcom’s appeal, gave Trustor final judgment for the sum of £1 million and a sum in respect of interest.  No case has, in my judgment, been made against Introcom for the payment now, in advance of any inquiry or damages assessment, of any sum additional to those required to be paid under paragraph 2 of Master Bowman’s 13 October 1998 order.  So I would set aside paragraph 4 of Rimer J’s order.
87.	In paragraph 5 of his order, Rimer J. specified three matters which he directed should proceed to trial. The first of these related to the SEK 417 million.  There is, in my judgment, no need for a trial.  It is possible that the state of play regarding the SEK 417 million may become relevant if the assessment of equitable compensation to be paid by Introcom is proceeded with.  I would set aside paragraph 5(a) (i) of the order.
88.	The second matter relates to the question whether Trustor is entitled to recover certain money paid to and retained by a company called Cordiant Property Holding Ltd, the landlord of Lansdowne House, Berkeley Square.  Nothing has been said about this in the course of the appeal.  At page 8 of his judgment Rimer J referred to £685,100 paid on 6 August 1997 to a firm of estate agents acting for the landlords of Lansdowne House in which GML was taking a suite of offices.  The £685,100, according to the judgment, was paid from Trustor’s Barclays, Cheapside, account.  So it did not go via Introcom and is not part of the money for which Introcom is accountable.  Unless there is some point about this that I have missed I do not see what the payment to Cordiant Property Holdings Ltd has to do with Introcom.  I would leave standing paragraph 5(a)(ii) of the judge’s order but which of  the defendants it concerns is unclear to me.
89.	The third matter is dealt with in paragraph 5(b) of the judge’s order.  He directed that the issue whether Introcom was also liable to Trustor as an accessory or conspirator (or both) should proceed to trial.  This seems to me to be pointless.  Introcom’s established liability to account to Trustor for all the Trustor money that passed through Introcom will, it seems to me, provide Trustor with the maximum recovery against Introcom that can be obtained.  The question whether Introcom might be made liable also on some other footing for sums additional to those which it actually received seems to me wholly theoretical.  I would set aside paragraph 5(b).
Mr Smallbone
90.	In paragraph 1(a) of his 25 June order made on the application against Mr Smallbone, GML and M&A, Rimer J. ordered Mr Smallbone to pay Trustor £426,439 together with interest as therein specified.  The £426,439 represents money received by Mr Smallbone out of the Trustor money paid to Introcom.  Trustor has established, in my judgment, that Mr Smallbone is accountable to Trustor for this money as a constructive trustee.  But Trustor cannot recover the £426,439 both from Mr Smallbone and from Introcom.
91.	For reasons I have tried to explain earlier in this judgment, Trustor’s remedy in respect of the £426,439 should take the form of an order against Introcom and Mr Smallbone jointly and severally.  It follows that  the sum of £426,439 should be deducted from the order against Introcom alone.  I would, to that extent, vary paragraph 2 of Master Bowman’s 13 October 1998 order.
92.	The objections put forward by Mr Hollington to the order for payment by Mr Smallbone of the £426,439 were based on the alleged recoveries made by Trustor in respect of the SEK 417 million and the Trustor shares and on the section 5 point.  None of these, for the reasons I have given, is an answer to Mr Smallbone’s liability to account as a constructive trustee for the Trustor money he received.
93.	Paragraph 2 of Rimer J.’s deals with the same matter as paragraph 5(a)(ii) of the order he made on the Introcom appeal.  For the reasons already given that paragraph stands.
94.	Paragraph 3 of Rimer J’s order gave Trustor final judgment against Mr Smallbone “for damages/compensation to be assessed ... for breach of duty”.  No attempt has been made on Mr Smallbone’s behalf to appeal against that order.  It stands.  Trustor can activate the assessment process if it wishes to do so.
95.	In paragraph 4 of his order Rimer J., ordered Mr Smallbone to pay £1 million, together with interest as specified, by way of an interim payment.    This was not, unlike the comparable order made against Introcom, an order for a payment on account of the sum to be repaid pursuant to the restitutionary remedy.  It was a sum to be paid on account of the damages/compensation to be assessed.  Is it clear, therefore, that Trustor can establish that the damages/compensation payable by Mr Smallbone will, when assessed, amount to at least £1 million?
96.	A number of considerations must be taken into account.
	(i)	The SEK 417 million may end up with Trustor.  I think this is highly improbable but it is possible that ITCB’s version of how that money came to be paid into Trustor’s Lanschot account is false.
	(ii)	Trustor has certainly made recoveries in Sweden in respect of the Trustor shares purchased by Lord Moyne.  The value of these recoveries may be in the region of SEK 200 million.
	(iii)	Trustor may recover a further SEK 42 million from the Jisander funds that have been frozen.
Each of these three matters would have to be taken into account on the assessment of  the loss suffered by Trustor and the damages/compensation to be paid by Mr Smallbone.  It might seem, therefore, premature to conclude that Mr Smallbone’s liability must be at least £1 million.
97.	There is, however, a further point to consider. Introcom is liable, as constructive trustee, to account for and repay to Trustor the Trustor moneys that were paid to it.  Hence the order for repayment to Trustor of the SEK 166.7 million, the £404,000 and the FIM 70.45 million (the whole totalling some £20 million in value).  In respect of £426,439, the Trustor money received by Mr Smallbone from Introcom, Mr Smallbone, as well as Introcom is accountable.  But what of the balance?  Introcom was the creature of Mr Smallbone.  He owned and controlled Introcom.  The payments out by Introcom of Trustor money were payments made with the knowing assistance of Mr Smallbone.  Rimer J., on several occasions in his judgment, characterised Mr Smallbone’s participation in the steps taken to extract Trustor’s money and pay it out to various recipients without the authority of Trustor’s board as being dishonest (see, in particular, p. 32 of the judgment).  Mr Hollington’s skeleton argument, paragraph 16, protested that these findings of dishonesty were unnecessary and should not have been made.  He did not, however, before us persist in that contention.  It would follow, it seems to me, from the judge’s finding of dishonesty on Mr Smallbone’s part in respect of the payments out made by Introcom of Trustor’s money, that Mr Smallbone would be liable jointly and severally with Introcom for the repayment of that money with interest thereon.  Mr Smallbone’s joint and several liability would not be confined to the part that he personally received.
98.	In my judgment, the judge’s order for an interim payment by Mr Smallbone of £1 million was not justified as an interim payment on account of damages or compensation for loss caused by breach of duty as a director.  The amount of that loss is still too uncertain.  But Mr Smallbone is, in my view, clearly liable, jointly and severally with Introcom, for the whole of the sums for which Introcom is accountable.  It may be, therefore, that paragraph 4 of the judge’s order could be left undisturbed save for the deletion of the words “by way of interim payment” and the substitution of the words “on account of the sums to be paid by Introcom”.  To do so, however, would be to change the basis on which the judge ordered Mr Smallbone to pay the £1 million.  Since no respondent’s notice on this point has been served and since Mr Hollington has had no opportunity on Mr Smallbone’s behalf to argue against the conclusions expressed in paragraph 97, it would not, I think, be right at this stage of the litigation to allow the order for the interim payment to stand.
99.	In paragraph 5 Rimer J., identified a number of issues to proceed to trial.  I would set aside sub-paragraphs (a)(i) and (b) for reasons I have already expressed.  If Trustor wants to proceed with an assessment of the damages/compensation payable by Mr Smallbone, it must apply to the Master for directions to be given under paragraph 3.  Nothing else is needed.
Summary
100.	The result is as follows:-
	(i)	Trustor’s appeal against the reduction of its restitutionary remedies on account of the SEK 417 million succeeds.
	(ii)	Paragraphs 3 and 4 of Master Bowman’s order of 13 October 1998 are restored.
	(iii)	Paragraph 2 of Master Bowman’s order of 13 October 1998 is restored but, as to £426,439, Introcom’s liability is a joint and several liability with Mr Smallbone.
	(iv)	Mr Smallbone’s liability under paragraph 1(a) of Rimer J’s Order of 25 June 1999 on the Order 14 summons stands but his liability is a joint and several liability with Introcom.
	(v)	Rimer J’s Order of 25 June 1999 on the Order 14 summons is varied as follows:-
	(i)	 paragraph 4 is set aside; and
	(ii)	sub-paragraphs (a)(i) and (b) of paragraph 5 are set aside.
	(vi)	Rimer J’s Order of 25 June 1999 on the Introcom appeal is varied as follows:-
		(i)	paragraph 4 is set aside; and
	(ii)	sub-paragraphs (a)(i) and (b) of paragraph 5 are set aside.
(vii)	Mr Smallbone and Introcom are granted permission to appeal; Mr Smallbone’s appeal against paragraph 4 of Rimer J’s order succeeds but, thereapart, their appeals are dismissed.
101.	There is one final matter I want to mention.  Mr Smallbone, in a skeleton argument he prepared on behalf of Introcom, said that SEK 80 million had been repaid by Introcom to Trustor but had been left out of account by the judge.  At the commencement of the hearing we were handed by Mr Smith, counsel for Trustor, a document containing, among other figures, a statement of the moneys transferred to Introcom net of money returned on 4 November 1999.  These are the figures I have used in this judgment.  They are the same figures as were used by Rimer J.  I understood the figures were agreed.  If there is any outstanding point regarding the SEK 80 million it must be mentioned to us when we hand down our judgments.
The Rt. Hon. Lord Justice Buxton:
102.	 I agree.
The Hon. Mr Justice Gage:
103.	I agree.		
Order: Appeal allowed.  Counsel to lodge a minute of order.
(Order does not form part of the approved judgment)

TUESDAY 09 MAY 2000
DICUSSION OF COSTS

RULING

THE VICE CHANCELLOR:  Of the matters which have been dealt with this morning, the terms of the order, apart from issues of costs which I will deal with in a moment, have been sorted out - I think with agreement on all sides - as to the terms to go into the order, leaving issues of costs as the only controversial matter with which  to be dealt.  As to that, it seems to me that Trustor was substantially successful in its appeal and was substantially successful, but not wholly, in resisting the appeals put forward by Mr Smallbone and by Introcom.  It also seems to me that it would be appropriate to treat the hearing before us and the other appeal costs as one set of costs rather than as separate costs incurred in respect of the appeal by Trustor, on the one hand, and by Mr Smallbone and Introcom on the other hand.  It seems to us that justice will be done having regard to the case if we make an order that Trustor recover all its costs up to 28th January 2000.  The relevance of that date is that it is the date on which the notice of appeal with the grounds of appeal, on behalf of Mr Smallbone and Introcom was issued, I think, rather than served.  That is the date borne by the document.

Thereafter, Trustor is to have 75 percent of its costs.

There is a complication in that from 8th February 2000 to 26th March Mr Smallbone was covered by a legal aid emergency certificate.  It seems to me very unlikely that in that period anything other than minimal costs were incurred by Trustor, bearing in mind the brief would have already been delivered to their counsel for the purposes of the hearing that commenced on 9th February.  It is necessary to add to the costs orders that I have just indicated that the costs attributable - I emphasise that is the appropriate word - to the period 8th February to 26th March are to be paid by the Legal Aid Board pursuant to Section 18 of the Act, but that they are to have the usual opportunity to show cause why they should not be required to pay those costs.

That has dealt with all the matters.  There must be a legal aid taxation certificate for the period I have mentioned, 8th February to 26th March.  I think that has dealt with all the matters that have to be dealt with.  I will ask counsel to agree a minute of order and sign it.  There is no need to refer it back to the court unless there is a problem.
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