Dodoun v Collings & Anor

Mr Collings' living expenses. Both Mr Collings (who was represented by counsel), and Ms Akopian (who appeared as a litigant in person), argued that the freezing Order should be set aside. As I understood it, Mr Collings resisted at least some of Mr Dodoun's proposed amendments, on the basis that they were not properly arguable. He certainly made no concessions as to any of them. As I understood Ms Akopian's position, she resisted the proposed amendments on all counts.

"The Sale is deemed as complete and the share ownership of [CCI] is deemed to be fully transferred to [Mr Dodoun] on signing of this agreement."

€558,882 was paid by 17 clients of two merchants, namely GVV Tec AG ("GVV") and Gpay Limited (which later changed its name to Prompt Solutions Limited) ("Gpay/Prompt Solutions"). Payments were made into five UK bank accounts, three at Barclays (a Euro account, a USD account and a Sterling account), and two at HSBC (a Euro account and a Sterling account).

Barclays accounts:

HSBC accounts:

on 16 May. On 5 March 2019, Mr Dodoun says he was told by Ms Akopian that all CCI's bank accounts (or what he assumed at the time were CCI's bank accounts) had been frozen, because something suspicious had come to light. Mr Dodoun says he found this "very strange indeed." On 6 March, Mr Dodoun says he received a call from Mr Collings who said that he " … was not going to allow Ms Akopian to access the bank accounts until such time as the various issues with the banks had been sorted out".

"According to the case officer in a conversation with my attorneys and I, my bank accounts were suspended due to a report from the sending bank of a serious fraud. Some funds that came to my account from your 'merchants' were reported as stolen funds. I am also aware that this is not the only problem you have caused." (Emphasis in original).

"I wish to return, as soon as possible, as per the bank statements from my accounts that you apparently have all the respectiveindividuals' funds to whence they have come from for both HSBC and Barclays. A lot of money has already been returned as you well know. This is non-negotiable, in case you were wondering.I am not sending one cent elsewhere. ONLY to where theindividuals' funds originally came from. There is clearly no investment consortium any longer and thus no reason to hold other peoples' funds, nor send it to you, nor your companies." (Emphasis in original).

" … the total Eur300,000 from Medtag Ltd to CC, to pay for the rolling-out of a legitimate and licensed business activity."

"These monies I will send to Marina [Ms Akopian], Tracey and Stan directly as a guarantee that you are not walking away from your obligations and promises to them."

"BMM Account – Coppin Colli". ii) "Business A/C – Coppin Colli". iii) "Fgn Account – Coppin Clngs Investments L".

So as to reduce the total amount covered by the freezing Order against Mr Collings and Ms Akopian from £650,000 to £515,000. This was to take account of a repayment to one of the individuals who had paid funds into one of the HSBC accounts in Mr Collings' name (in this case, the HSBC Euro account). The repayment, of €155,000 to Mr Marc Staub, was initiated by HSBC itself.

So as to increase Mr Collings' living allowance from £1,000 per week to £3,700 per week. This was on the basis of evidence provided by Mr Collings as to his outgoings.

The fact that, in addition to the seven accounts in Mr Collings' own name already mentioned above, the further information now produced show that he has (or until very recently had) 4 other personal accounts, two at Lloyds and two at Barclays. These were all either in the name of "Mr Bryan Collings", or "Mr Bryan Alexander C Collings", or "Mr Bryan Alexander Collings" – i.e., they were all obviously personal accounts. None of these were identified by Ms Akopian as accounts into which funds should be paid. Mr Dodoun says it is highly suspicious that he was provided only with details of those personal accounts of Mr Collings which were not identifiable as personal accounts, and which on their face appeared to be corporate accounts of CCI.

The fact that, although Mr Collings represented that his accounts had been frozen as of 5 March 2019, which communication was then followed by a period of radio silence, an analysis of the account statements for the 2 HSBC accounts shows considerable activity on those accounts during March, April and May. That is undeniably true. For example, looking at the HSBC Sterling account, on 5 March 2019 a total of £29,200 was withdrawn by Mr Collings. As Mr Lopian points out, at the time the only funds in the account (save for a small balance of £15.74) were funds paid in by clients/customers, or on Mr Collings' case, by potential investors in CCL. Either way he seems to have been treating the monies as a fund available for his own use. It is also true to say that other funds are later paid into the same account by Mr Collings (for example, he made two payments into the account on 6 March of £80,000 and £76,077). By 7 May, however (the last date for which statements are available), there was a deficit, in the sense that £78,055 of client/investor funds had been paid in, but only £48,233 remained. The picture on the HSBC Euro account is similar. That is the account into which the €300,000 Medtag funds were paid. Once again there are payments into and out of the account from early March onwards – including a substantial withdrawal by Mr Collings on 6 March 2019 of €184,651 (which I will come back to below). Mr Dodoun accepts that a number of the payments out of the account were authorised by him (there were two payments to GVV, one of the merchants mentioned above; two payments to a company called Nicologo AG, which is associated with Mr Dodoun; and one payment to Mr Portal). But overall, according to Mr Lopian, there was still a substantial shortfall as of 10 April (the last date for which an account statement is available). That is because a total of €574,050 was paid into the Euro account, either by clients or by Medtag. Even deducting the amounts Mr Dodoun authorised to be paid out, that should have left a total remaining of CCI's money of €479,683. In fact, as of 10 April, there was just some €211,934.

In his evidence, Mr Collings has now explained that it was in fact only his Barclays accounts which were frozen on 4 March 2019, and not his HSBC accounts. That did not happen until later, it seems at some point between about 9 May and 17 May (Mr Collings in his Second Witness Statement refers to having received a letter from HSBC dated 3 May, but the account statements show payments out of the Sterling Account on 7 May). Through counsel, Mr Collings has now explained that having been notified on 4 March of the Barclays freeze, and having concerns that his accounts were being used for money laundering purposes, he effectively took it upon himself to freeze the HSBC accounts as well, at least as far as concerned the payments received from Mr Dodoun's clients (or on his own case, from CCL's investors). In other words, Mr Collings decided not to process any further instructions received in relation to those payments. He says that explains why there were movements on the HSBC accounts in the period after 5 March. He felt able to use them for his own purposes, but did not wish them to be used for purposes associated with Mr Dodoun.

Moreover, Mr Collings says that, leaving the issue of the Medtag funds aside, an analysis of the payments into and out of his accounts shows no evidence of misuse of the client/investor funds. That is because, tracking through the various payments: (1) there were 17 payments in, in different currencies, totalling respectively £117,156, €355,025 and US$ 88,984; (2) there were 11 payments out totalling £37,248.50 and €330,366 (and no payments in US$), but these were authorised, either by Mr Dodoun himself (because they were payments to merchants, or were returns to the 5 individuals who had failed money laundering checks, or were the payments to Nicalogo or to Mr Portal mentioned above), or by HSBC (i.e., the repayment to Mr Staub).

That should have left balances as follows: £79,907.50, €24,659 and US$88,984. In fact, although the balance on the Barclays US$ Account remains US$88,984, the overall, available balances in Sterling and Euros on the frozen accounts are different to those one would have expected. The Euro figure is higher than one would have expected: €57,134 not €24,659 (a surplus of €32,475.75); and the Sterling figure is lower than expected, £50,085 not £79,907.50 (a deficit of £29,821.60). But this is explicable: the figures cancel each other out, in the sense that the surplus in Euros is almost equivalent to the deficit in Sterling, and the reason for this is that when Mr Collings was using the Medtag funds to pay his own bills and expenses, he did not transfer sufficient funds from the HSBC

The original application for freezing relief was more than warranted by Mr Collings' and Ms Akopian's failure to provide bank statements after the end of February and by their "radio silence" following the notification of the accounts being frozen. It was justified also by the contradictory statement made by Collings in his 17 March letter that he intended to make payments to Ms Akopian and others. What has happened since confirms that those early suspicions and concerns were entirely correct, because it is now clear (1) that Mr Dodoun was misled as to the identity of the account holder, and (2) that he was also misled about the accounts being frozen. They were not frozen, and in fact one can see that almost from the time Mr Dodoun was told that they were,

The true position is that, having been notified in early March of the freeze applied by Barclays, he was understandably concerned that his personal accounts were being used for illegal, money laundering purposes. He unilaterally took action designed to prevent Mr Dodoun having control over the funds in those accounts. The real reason for the period of radio silence was to allow time for ongoing investigations and a fear of tipping off, which is quite standard in such cases. Given the questionable nature of the business he is involved in, Mr Dodoun cannot really have been surprised that money laundering concerns had arisen and the accounts had consequently been frozen. Indeed, this has happened to at least one other person associated with Mr Dodoun, a German lawyer named Dr Lehmkuhl. In any event, he (Mr Collings) lays no claim to the funds said by Mr Dodoun to have been paid by clients. In fact, he does not want those funds in his accounts, and is willing to co-operate in them being returned to the original payers. Mr Dodoun is the one who has been frustrating that process.

As to the Medtag funds, Mr Dodoun has produced no evidence at all which supports his story that he was owed sums by Medtag in February 2019 because of payments he had himself made on Medtag's behalf. As against that, on Mr Collings' side, he has produced a copy of the Medtag Loan Agreement and a confirmatory letter from Mr Cusano. Consequently, Mr Dodoun does not have anything like a good arguable case that Medtag paid funds to CCI on his behalf, as he alleges. Indeed, his story as regards Medtag is made up and false.

As to the proposed amendments, the attempt now to put forward a new case which was not the basis for the original Order made on 16 May is impermissible. Mr Dodoun has been dragging his heels whereas his obligation was to progress

In any event: (1) there is no real evidence of a risk of dissipation of assets; (2) Mr Dodoun does not come to the Court with clean hands, because at the very least he appears to be involved in an unlawful, unregulated PSP business, and at worst he appears to be involved in money-laundering; and (3) there is no substantial commercial purpose in maintaining the freezing Order, in the sense that if one takes the "client" monies out of account (which as far as Mr Collings is concerned can be returned to the "clients" immediately), he has very little by way of assets and by the time a trial occurs his resources will all have been used up and there will be no money left: thus there is very little left to be frozen.

Chapter I of the Act, " … references to a member of a company include a person who is not a member but to whom shares in a company have been transferred or transmitted by operation of law". The logic of this point of course applies equally well to CCI's intended claims regarding the Medtag payments, which I come to below.

It is hard to overlook the basic fact that Mr Dodoun was given details by Ms Akopian of what he understood to be accounts in the name of CCI, but which in fact were accounts in the name of Mr Collings personally. A WhatsApp message from Ms Akopian on 15 January 2019 described her as supplying: "CCI BANK ACCOUNTS_IBANS". It seems to me natural to suppose that Mr Dodoun assumed he was being given details of corporate bank accounts and not the personal account details of someone who at the time he had not even met. When Mr Dodoun came to send the same account details onto those he describes as clients, that was in a document which gave the beneficiary name as "COPPIN COLLINGS INVESTMENTS". Such clients no doubt also thought they were sending funds to CCI, not Mr Collings personally, and the available documents are consistent with that idea. The questions only increase with the knowledge that (1) there were other corporate accounts of CCI, but details of those accounts were not made available; and (2) the account names that were provided did not on their face suggest that they were the names of personal accounts, but instead gave the impression that they were the names of corporate accounts – details of those accounts which were readily identifiable as personal accounts were not provided.

There are also questions about the plausibility of Mr Collings' own account, that he thought the funds were paid by prospective investors in CCL. For example, as Mr Lopian pointed out, the 5 parties who on Mr Dodoun's case were clients of Gpay/Prompt Solutions all had their funds returned to them at the same time, because they failed money laundering checks. What, asked Mr Lopian, is the likelihood of 5 investors on CCL all asking for their money back at the same time? Similarly, as will be seen below, there is certainly evidence of Mr Collings making use of the funds received into his HSBC account. If these were funds provided by investors, then how – even on his own case – did he feel entitled to do that? I make these points of course not in order to express any final view about such matters, but merely in order to demonstrate that there is an arguable case.

There is then the fact that Mr Dodoun was told that the relevant accounts had been frozen, and the ensuing period of "radio silence". Once more, I emphasise that on fuller examination it may be that there were good reasons for how Mr Collings and Ms Akopian acted. The background to the payments made into Mr Collings' accounts will need to be properly investigated at trial, when also one would hope that a more complete account will be available of what steps Barclays and HSBC took and why. For the moment, however, the fact remains that Mr Dodoun was given the impression that all relevant accounts and funds were frozen, when in fact they were not; and in the meantime, there is undoubted evidence of activity on the two main accounts (those at HSBC) in the period after 5 March, i.e, in the period after Mr Dodoun was told the account freeze had come into effect.

That brings me onto the movements across the accounts. Mr Stuart makes the point, as already noted, that there in fact remain in the accounts sufficient sums to refund all of Mr Dodoun's alleged clients, or merchants (if one converts a sufficient number of Euros to make up the deficit in the Sterling balance: see [40(iii)] above). That is true, but to my mind does not fully meet the point made by Mr Lopian. This is best illustrated by looking at movements across the HSBC Sterling Account.

As at 5 March 2019, the majority of the funds standing to the credit of that account (save for a small sum of £14.74) were funds paid in by clients/investors. There were credits from 4 such persons totalling £78,055, and thus making up the vast majority of the balance of approximately £78,069.34 as at close of business on 4 March 2019. On 5 March, however, there are a number of payments out of the account which are plainly personal payments for Mr Collings' own benefit: £18,000 in respect of his former home; £6,000 in respect of a personal credit card, £5,000 to "Ena Makin T Collings", and a withdrawal of £200 in cash. That left a balance as at 5 March of £48,869.34.

It is true to say that on the following day, 6 March 2019, the account statement shows receipt of a total of £156,077.19 (referred to at [39(ii)] above), and so the immediate deficit is made up. But the point remains that, in the meantime, Mr Collings had unquestionably made use of funds for his own purposes, which even on his own case were paid in by third parties on account of their intended investments in CCL, and which on Mr Dodoun's case were due to be paid to merchants.

Mr Lopian in his Skeleton says that the £156,077.19 paid on 6 March came from an unidentified source. However, the relevant statement contains the same description for each payment: "Mr Bryan Coppin Co", and the two payments bear the following references: "RBV06039915W6JLS" and

This suggests that the funds coming into the Sterling Account in fact emanated from the HSBC Euro Account. If so, that would tend to shore up Mr Collings' case that he did not intend to diminish the available balances below a level which would enable client/investor funds to be paid out in due course; but again, it is not a complete answer, because he was making use of the funds in the meantime, and there is also the fact that ultimately there was a deficit on the client/investor fund balance in the HSBC Sterling Account. Mr Collings is entitled to say (as he does) that there is an innocent explanation for that, i.e., that he simply did not transfer as much from the Euro Account as he needed to. But equally, in my view, Mr Lopian is entitled to test that explanation, and to argue (as he does) that the fact there were sufficient client/investor funds left overall when the music stopped was simply good fortune, and that Mr Collings' use of such funds in the meantime is consistent with the idea that he did not have the intention he says he had. It is also true to say that Mr Collings' defence of his position in relation to the client/investor funds is linked to his position in relation to the Medtag payments (see below), because it is only if the Medtag funds belonged

On any view, it seems now to be accepted that Mr Dodoun was attempting to set up an unauthorised PSP business in this jurisdiction. That may have been the product of his own naiveté and reliance on Ms Akopian's advice about passporting the Estonian licence said to have been owned by BNC, but the underlying story remains obscure.

I was taken in submissions to documents relevant to the question of the Estonian licence held by BNC. It is true that some of the available materials support Mr Dodoun's account - for example, Mr Dodoun has exhibited a draft Sale and Purchase Agreement for the acquisition by CCI of shares in BNC. But in other ways the available documents are somewhat inadequate: as Mr Stuart pointed out, it is difficult to identify among them anything which is clearly and obviously a licence to conduct authorised PSP activity.

As noted already, one of the merchants introduced by Mr Dodoun was Gpay/Prompt Solutions. Mr Collings and Ms Akopian have produced copies of press articles from "The Financial Telegram", which suggest that Gpay may be connected to money laundering activities, and to an individual known as Gal Barak, "the Wolf of Sofia". Mr Dodoun points to the fact that those individuals who sought to effect payments to Gpay had their funds returned to them, which is true; and he also says that he relied on Ms Akopian to carry out due diligence, including on Gpay. That may also be true, but taken together with other factors the connection with Gpay at least raises some questions about the overall business model being used by Mr Dodoun.

It also seems to me surprising that apparently there has been no communication with GVV, who on Mr Dodoun's case presumably think they are owed money by CCI. There may be good reasons for this; but it is one more feature of this case which on the face of it appears odd and has no obvious explanation.

There is the fact of Mr Collings' own "angry letter" of 17 March. On the face of it, that letter appears directly to support Mr Dodoun's story, that the Medtag funds were paid by him (or rather, at his direction) in order to capitalise CCI and enable it to apply for its intended licence or licences. As noted above, Mr

The risk of dissipation might be said to flow from the nature of the claims themselves, including those analysed earlier in this Judgment relating to the client/investor funds. Essentially, Mr Collings and Ms Akopian are accused of dishonestly procuring the payment of funds into Mr Collings' personal accounts, which Mr Collings then made use of, while hiding behind the smokescreen of the representation that the accounts were frozen.

I see the force of that point, but even accepting (as I do) that Mr Dodoun's case is arguable, it seems to me I also have to look at whether any other of the usual indicia of the risk of dissipation exist.

By this I mean things such as the use of offshore companies or trusts, or the immediate siphoning off of the funds received to other accounts in other jurisdictions for no obviously good purpose. In this case, as Mr Stuart points out, Mr Collings is an FCA registered individual with a long association with the UK, who lives in Kent with his children, and as to whom there is no evidence of any use of offshore "haven" jurisdictions. Moreover, Mr Collings flagged the freezing of the accounts in early March 2019, and yet by the time the freezing Order application was made on 16 May, they still contained substantial sums, and certainly enough to cover the required client/investor payments. They had not been spirited away.

We now have access to information about the actual use made by Mr Collings of the funds which found their way into his accounts. As already noted above, although questions remain, the payments made out of the HSBC Sterling Account on 5 March 2019 appear to have been for relatively routine items of personal or domestic expenditure. Other payments are described as involving Mr Collings paying off accrued debts and other items of expenditure which needed to be made, and otherwise paying off credit card debts, school fees and travel expenses. On the face of it, that seems to be correct.

Taking those points into consideration, in my view the case is at best a marginal one, and consequently I do not consider that Mr Dodoun has sufficiently demonstrated by solid evidence that a real risk of dissipation exists. Even if I am wrong about that, I am not satisfied as to the overall justice and convenience of the present Order being continued.

As to that, I am struck by the fact that, once the client/investor funds are taken out of account, the disclosures made by Mr Collings indicate he actually has very limited assets available. Not much is left of the Medtag funds. According to his 1^st Affidavit, Mr Collings is not presently employed and is living in rented accommodation. He has funds available in his personal bank accounts totalling about £85,000; other debtors totalling about £16,000; a pension worth about £52,000; and furniture in the approximate value of about £30,000. Even if the freezing Order is maintained, allowances will need to be made for living expenses and legal fees, and they will obviously eat into these remaining sums very quickly. Thus I think Mr Stuart is correct to say that, even with a freezing Order, Mr Collings' existing resources are likely to be used up by the time there is a trial, and possibly well before. I am not persuaded that the existing living allowance of £3,700 per week is inappropriate, and have been shown nothing specific to suggest it is. Mr Lopian has only made the general point that CCI has a proprietary claim and that that should be taken into account in determining what living allowance (and logically also, allowance for legal expenses) is appropriate. I deal with that point below.

The position of Ms Akopian seems to be similar, if not worse. She has been made bankrupt, and although her asset disclosure in this case indicates a belief that she is owed £1.4m, I presume that is dependent on efforts to resuscitate CCL and should be regarded as speculative.

In all the circumstances, it seems to me that maintaining a (non-proprietary) freezing Order in respect of the Medtag claims is likely to be of little practical use and may be oppressive. I therefore think the Order should be discharged.

I am satisfied, for the reasons already given above, that there is an arguable case on the merits.

It is then a question of considering the risks on each side, which may not be adequately compensated in damages. On the basis there is an arguable case that the remaining funds belong to CCI, there is certainly a risk of such damage to CCI if, before trial, Mr Collings spends them. On the other hand, there is potential for significant damage being caused to Mr Collings if he is prevented before trial from spending what may turn out to be his own monies on living expenses and legal fees. I do not think that the risk of that damage materialising is sufficiently addressed by Mr Dodoun offering, or me requiring of him, a crossundertaking in damages (whether fortified or not). The risk to Mr Collings is that, if his ability to service his outgoings is further restricted, he will quickly run into serious financial difficulty or even bankruptcy, and will be unable to defend the claims against him, either effectively or at all. If such risks were to materialise, it would be cold comfort to Mr Collings to know he has the benefit of Mr Dodoun's cross-undertaking. It seems to me, therefore, that as a matter of basic fairness, the balance of convenience lies against granting any proprietary injunction.

If that is wrong, and the balance of convenience is even as between the parties, it would then be permissible to take account of the respective merits of the parties' cases. I would then hold that, although Mr Dodoun has an arguable case, on the basis of the presently available evidence, Mr Collings has the stronger case. On that basis, I would also refuse the injunction.

As I understand it, no proprietary injunction is sought against Ms Akopian. I have not seen anything which suggests she has been in receipt of any part of the Medtag funds.

CCI should be added as a party and Mr Dodoun be given permission to pursue a derivative claim.

Mr Dodoun should be given permission to amend the Claim Form and

Funds corresponding to the outstanding client/investor balances should be paid into a blocked account pending trial or further Order of the Court.

Save as above, the existing freezing Order should be discharged.