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[2020] ZAWCHC 1
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Worldplay LLC v Firstrand Bank Limited and Others; Worldplay LLC v Adelakun NO and Another; Worldplay LLC v Adelakun (19409/2018; 3484/2019; 3485/2019) [2020] ZAWCHC 1 (6 January 2020)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Before
Steyn J on 12 September 2019
Case
No: 19409/2018
In
the matter between: (1)
WORLDPAY
LLC
Applicant
and
FIRSTRAND
BANK LIMITED
First
Respondent
THE
TRUSTEES FOR THE TIME-BEING OF
THE
JHYHDE INTERNATIONAL TRUST
Second
Respondent
ADELAKUN
,
JYDE
Third
Respondent
Case
No: 3484/2019
In
the matter between: (2)
WORLDPAY
LLC
Applicant
and
ADELAKUN
,
JYDE AREMU BREIMMO N.O.
First
Respondent
DUBE,
THANDIKHAYA MICHAEL N.O.
In
their capacities as the
trustees
for the time being of the
JHYHDE
INTERNATIONAL
TRUST
Second
Respondent
Case
No: 3485/2019
In
the matter between: (3)
WORLDPAY
LLC
Applicant
and
ADELAKUN
,
JYDE AREMU BREIMMO
Respondent
JUDGMENT
DELIVERED: 6 JANUARY 2020
STEYN
J
INTRODUCTION
1.
The three matters before me are related to one another. The
first
matter (case
19409/2018
), where First Rand Bank Limited,
(referred to as 'First Rand') is the first respondent, relates to an
interim anti-dissipation
interdict/order that was provisionally
granted on 5 November 2018 by
Nuku J
. The order related to
funds in accounts in the names of the other two respondents , as
cited. First Rand did not oppose the granting
of the interim order
and it does not oppose a final order. The other two respondents in
the first matter opposed an interim order
and are opposing final
relief. The
second
and
third
matters before me, (cases
3484/2019
and 3485/2019
) are postponed return dates of
provisional sequestration orders granted by
Mantame J
on 28
March 2019. Mr Jyde Adelakun , 'Adelakum ' is a respondent in all
three matters.
THE
CONDUCT OF ADELAKUN
2.
Where I refer to '
respondents'
in plural, I refer to the
second and third respondents in case
19409/18
and first and
second respondents in case
3484/19
. (Adelakun and the Trust.)
These matters have a history over an extended period of time
characterised by,
inter alia
, postponements, condonation and
interlocutory applications and orders, mostly requested by
respondents, where the numerous sets
of representatives of the
respondents withdrew with monotonous regularity, often at the doors
of the court. Adelakun, the controlling
mind and the main/only driver
of the defence to the orders sought in the applications, appeared on
his own in some instances or
filed papers personally, often
electronically, indicating a clear lack of understanding of the
importance of following prescribed
court procedures. His conduct
exhibited disrespect for prescribed court rules and an abuse of court
processes and the justice system.
3.
Inter alia
Adelakun bombarded my office with mostly irrelevant
and incomprehensible documents, delivered in person or
electronically, even
while represented, before and after the final
hearing of the sequestration matters on 12 September 2019, causing
confusion and
distraction, creating the impression that his
reliability and credibility were questionable . As an example, I
attach an inappropriate
e-mail, marked
'E 1'
, received on 23
September 2019, while Adelakun was represented, that was nonsensical
and incomprehensible. He falsely accused me
of conversing with the
representative of the applicant in my chambers, days before the 12
September hearing. (An aspect not mentioned
during the hearing.) The
representative of applicant on 12 September at the hearing was an
advocate from Johannesburg, who I had
never met previously.
4.
Adelakun's Heads of Argument were often late or absent and affidavits
were filed
out of time or sequence regularly . Unauthenticated copies
of foreign documents and incomprehensible notes were delivered or
e-mailed
to my registrar from time to time. Eventually when the
matters were argued on behalf of Adelakun by his legal representative
on
12 September 2019, the argument bore little resemblance to the
Heads of Argument that had been filed belatedly.
5.
Understanding the history of the matters and numerous applications,
some urgent,
some interlocutory, some since abandoned, contained in
the seven voluminous files, was challenging. I suggested on 28 August
2019,
when the matters were postponed at the request of Adelakun, who
was yet again not ready to proceed, that a document be prepared
setting out relevant aspects of the chronology of the matters. This
document, prepared by applicant's representative, is very useful,
and
its contents were not challenged by the respondents. The Applicant's
Consolidated Chronology under the relevant case numbers
places the
history of the conduct and orders in the matters in perspective.
THE
ISSUE
6.
The main issue to be decided in all the matters is whether applicant,
'Worldpay'
has proved that respondents, Adelakun and or the Trust or
its representative(s), are indebted to it in a very substantial
foreign
liquidated amount based on the massive scale of cyber fraud
committed by these respondents.
THE
PARTIES
7.
Worldpay is a limited liability corporation incorporated in Delaware
USA, with
its headquarters in Ohio, USA. It is a global payment
processing company operating internationally that offers services to
enable
merchants to accept and process credit, debit and prepaid
payments received from customers. The second respondents in the first
two matters are referred to as 'the Trust'. It was cited as it
appeared to be a party, with Adelakun, to the fraud committed against
Worldpay. The Trust's bank account was allegedly and ostensibly an
account through which the moneys misappropriated by Adelakun
were
'
laundered
. The Trust owns immovable property and conducts
business in Cape Town.
8.
Adelakun is an international businessman who is allegedly resident in
South Africa,
in Cape Town, from time to time. He states in his
affidavit in case no 19409/18 that he has interests in various
countries including
South Africa and that he is the CEO of TOF Energy
Corporation and Touch of Fame Group Company, operating in the USA. He
also stated
that he is of Nigerian descent and is a Nigerian
National, who has residency in Nigeria and South Africa. He is cited
as he appeared
to be and was ostensibly an account holder of at least
one of the bank accounts held with First Rand into which
misappropriated
funds were transferred. It was alleged that he was
the architect and controlling mind relating to the fraud suffered by
Worldpay,
as it was through his network of companies and trusts,
including the Trust before me, that the fraud was committed. I later
deal
with the gist of the documentation.
THE
INTERDICT (Case
19409/2018
)
9.
In the first application, launched in October 2018, Worldpay , the
applicant,
sought and was granted urgent interim relief placing a
hold on, or 'freezing', two bank accounts held with First Rand into
which
it was suspected that misappropriated moneys had been
channelled by the perpetrators of massive fraud. It was suspected
that the
perpetrators of the fraud were the respondents. After
hearing the matter on 5 November 2018, Nuku J ordered that First Rand
should
disclose information and details pertaining to the relevant
suspicious accounts, to Worldpay's representative. An
advocate/facilitator
was appointed for the purpose of receiving and
facilitating inspection of the relevant bank accounts. The interim
anti-dissipation
order, related to funds in stipulated accounts, was
granted. The return day of the order was postponed to 6 December
2018, with
a timeline relating to the further conduct of the matter
by the parties.
10.
The steps the respondents were ordered to take were ignored. On 6
December 2018 Meer J ordered,
after hearing the representative of
Worldpay and Adelakun, in person, that the application was postponed
to 2 May 2019. The rule
nisi
of the interim anti-dissipation
order was extended. Worldpay was ordered to institute legal
proceedings. Respondents were ordered
to pay the costs. A timeline
for the further conduct of the matter was ordered. Respondents'
undated answering affidavit was filed
weeks late. Adelakun blamed his
then former attorneys and his business dealings in Dubai for the lack
of compliance with that court
order. On 29 April (shortly before the
return day of the orders) his attorney at that time withdrew, after
Adelakun had filed a
supplementary affidavit without leave and
ostensibly without the input or assistance of his attorney.
THE
SEQUESTRATION APPLICATIONS
11.
Worldpay applied in March 2019, in two applications, cases
3484
/2019
and
3485
/2019, to sequestrate the estates of Adelakun and the
Trust. Adelakun, who opposed the orders, was legally represented.
Provisional
sequestration orders were granted by
Mantame J
, as
noted, returnable on 2 May 2019. She refused leave to appeal the said
provisional orders. I later deal with the crux of these
matters and
the basis of the orders granted.
12.
On
2 May 2019 Sher J
heard the parties on the return day of
the provisionally ordered sequestration applications, Adelakun
appearing in person. The
return days in the two matters were
postponed and the rule
nisi's
extended to
28 August 2019
.
Shortly thereafter Adelakun, despite agreeing to the postponement
order, filed an application for leave to appeal this order.
He was
advised by the office of the Judge President that the application was
misconceived. I was later advised that the leave to
appeal
application would not proceed.
13.
Also, on 2 May 2019, Hlophe JP, after hearing Adelakun in person,
ordered that matter
19409/18
, the interim anti dissipation
order/interdict, would be postponed and heard simultaneously with the
two sequestration applications
on the return day of the provisional
orders. The rule
nisi
was extended accordingly.
BACGROUND
14.
It was alleged, argued and shown that a company of which Adelakun
admitted that he was the
CEO, namely TOF Energy Corporation,
'TOF’
,
entered into a 'Bank Card Merchant Agreement' or 'BCMA' with
Worldpay, who had to provide TOF with payment processing services
under a BCMA. In the papers before me it was alleged that between
August and September 2010, TOF purportedly made and/or represented
to
Worldpay that it had made sales to customers of more than $46
million. As a consequence, Worldpay paid $15 million, plus to
an
account stipulated for payment by TOF, being an account held at an
American bank, with the unusual name of Fifth Third Bank
or 'FTB',
with account number provided. But, before Worldpay had reconciled the
sale transactions presented by TOF, it became aware
of a large number
of
'rejected transactions'
in the account of TOF. It was
allegedly shown, in brief , that transactions had been rejected of
TOF's alleged customers, either
as there were no such customers, or
the customer accounts had not authorised the payments or the
transactions were rejected as
invalid account numbers had been
provided.
15.
During subsequent investigations Worldpay ascertained that all the
sales processed through
the TOF accounts were fictitious and that it
had fallen victim to
'sophisticated
’ internet, currency
transfer, fraud. Worldpay located and recovered funds that had been
transferred to the FTB account in
an amount of nearly $3 million.
Further funds were recovered, allegedly through the intervention of
the Nigerian Economic and Financial
Crimes Commission after an order
had been obtained in the Federal High Court in Lagos, against
inter
alia
, Adelakun. An interim hold over accounts in Nigeria, where
some misappropriated funds had been transferred to, was allegedly
obtained.
This resulted in some voluntary repayments from third
parties, resulting in the total unrecovered loss by Worldpay, as a
result
of the fraud committed against it, of about $12.4 million.
(According to my calculations, at present, the amount constitutes
more
that R182 million.)
16.
When Worldpay
'followed the money'
transferred from the FTB
account, it established that a substantial portion of fraudulently
procured funds had been transferred
to a company related to TOF into
a second account held at FTB and that the TOF Group, at the instance
of Adelakun, had transferred
in excess of $2 million in seven
payments to an account in South Africa, at First Rand Bank Limited,
held under the name of the
Trust, at a branch of the bank in Sea
Point, Cape Town, referred to as the primary FNB account. An amount
in excess of R 29.7 million,
emanating from the funds fraudulently
misappropriated from Worldpay, was allegedly transferred to this FNB
account, with number
6[...], where the balance of about R500,000
remained at the time when the applications were launched.
17.
It also appeared that transfers had been made from the said FNB
account to Adelakun's personal
account at FNB, Sea Point, under
account number 6[...]2 and that an amount of R3.3 million, emanating
from the misappropriated
funds of Worldpay, had been transferred to
Adelakun's FNB account with a balance of about R2.6 million when the
applications were
launched.
18.
It is alleged that substantial sums of misappropriated funds have now
been traced in other
named bank accounts in foreign jurisdictions ,
including the USA, Nigeria, Sierra Leone and the UAE, to persons
related to or linked
to Adelakun or TOF. Steps have allegedly been
taken to freeze the funds in some of the said foreign accounts.
19.
As alleged, argued and shown, Adelakun has not explained the payments
made into the FTB
account in the USA and has never suggested a
legitimate source for the payments, undoubtedly as the funds were
misappropriated
from Worldpay through fictitious sales presented
through the payment system of Worldpay. Even during his appearances
in this court
Adelakun has not explained the providence of the funds
and the movement thereof into, or from his accounts, or accounts
connected
to him, with First Rand or FNB in Cape Town. The evidence
demonstrating the fraud and the extent thereof is damning, as argued,
when regard is had to the contents of bank statements provided and
the lack of attention to, or meaningful explanation of these
statements by Adelakun .
20.
Adelakun 's (and/or the Trust's) opposition proposes that Worldpay is
pursuing a vendetta
against him/them and has fictionalised the claims
of fraud against the respondents. Instead of focussing on
substantiating the
allegations of denial, Adelakun resorts to an
attempt to bolster his case by a series of ill-conceived and
meritless
'in limine'
objections and points, such as lack of
authorisation, lack of locus standi , non-joinder claims,
applications for leave to appeal,
even of interim orders, an
application to have matters live video recorded in court, etc. Some
threatened applications, such as
applications for security for costs,
were merely not proceeded with. I am not surprised that Worldpay
maintains that Adelakun is
attempting to obfuscate the real issues,
conduct that Adelakun resorted to throughout the conduct of these
applications in various
ways, as noted, disdainful of court rules and
procedures.
21.
As pointed out by Mantame J in her provisional sequestration ruling
on 28 March 2019, after
hearing argument in the matters, with
Adelakun then legally represented, Adelakun did not meaningfully or
at all address in his
papers, and I add, nor in argument, whether
Worldpay was entitled to the relief it sought. Respondents merely
denied their involvement
in fraud without acceptable substantiation.
It appears to be their view that the applicant must prove its
allegations. I agree
with the conclusion reached by Mantame J that
the applicant had succeeded in showing and proving the flow of funds
from its accounts
into accounts that could be and were accessed by
the respondents, as represented by the controlling mind, Adelakun.
The provisional
sequestration orders were justifiably and duly
granted. Despite the fact that argument was finalised and judgment
reserved in respect
of the applications for final sequestration
orders, I note, from e-mails sent to my chambers by Adelakun, that he
is forwarding
documentation to me and even to Mantame J, complaining
about the justice system.
22.
I am satisfied that the terms of the orders granted by Mantame J have
been complied with,
that the requirements for final sequestration
orders in terms of the provisions of
s 12
(1) of the
Insolvency Act
of 1936
, have been complied with and that the applicant has shown on
a balance of probability that it has a liquidated claim against
Adelakun
or/and the Trust in excess of R 100, 00
(s 12(1)(a)
of the
Insolvency Act). In
fact, the claims against the respondents by
Worldpay have been shown to amount to substantial amounts, comprising
millions of Rand.
23.
I was referred to a relevant authority,
Premier Western Cape and
Others v Parker and Mohammed and Others
[1999] 1 ALL SA 176
(C)
at 182, and the judgments referred to therein, where the court
rejected an argument that applicant's claim could not be regarded
as
liquidated because the full extent of the theft perpetrated against
him had not been finally established, as aspect that was
regarded as
of
'no consequence
' in the reported judgment relied upon.
24.
It has been shown that Worldpay has suffered significant losses, due
to the fraudulent conduct
of Adelakun, in relation to himself
personally and with respect to the Trust that he represents.
Accordingly, sufficient evidence
has been presented that applicant
has a liquidated claim conferring
locus standi
upon Worldpay
in the sequestration applications in terms of the relevant sections
of the
Insolvency Act, (s
12(1)(a)).
25.
It has been shown categorically that the respondents are factually
insolvent and that they
have committed acts of insolvency. Worldpay
has demonstrated claims of about R33 million against the respondents.
The identified
assets of Adelakud, frozen in an FNB account, is R 2.6
million. The assets of the Trust are worth R 574,428.27, also frozen
in
an FNB account. The Trust is the owner of an immovable property in
Cape Town valued at approximately R5 million. Neither of the
provisional sequestration trustees have found further assets,
allegedly as Adelakun has adopted a belligerent and non-co-operative
stance towards their investigations.
26.
It was argued and shown that the activities described with regard to
Adelakun's and the
Trust's accounts, when analysed with the TOF Oil
bank statements, that are linked to Adelakun, show dispositions of
property, which
have or would have the effect of prejudicing
creditors in terms of the provisions of
s 8(c)
of the
Insolvency Act,
or
the removal of property, with the intent to prejudice creditors,
notably Worldpay, or to prefer creditors over Worldpay, as
contemplated
by the provisions of
s 8(d)
of the Act. It is on this
basis that Worldpay argues that it has satisfied the court, on a
balance of probability, that the respondents
are insolvent or have
committed acts of insolvency.
27.
In any event, in this matter, as argued, there does not appear to be
a
bona fide
or genuine dispute of fact on relevant issues. The
issues raised by Adelakun in his answering affidavits in respect of
both sequestration
applications demonstrate that there is no defence
to the proceedings and that the purported grounds of defence, that he
raises,
are unreasonable, improbable and in bad faith, such as the
unsubstantiated allegation that Worldpay has fabricated its claims
and
is abusing court process.
28.
The applicant has established from the bank statements made
available, the flow of funds
from Worldpay to the Trust and Adelakun,
tracing funds from, for example, the second FTB account to the
primary FNB account and
from the latter to Adelakun's FNB account as
well as transfers to and from the TOF Oil account that is linked to
Adelakun. How
the transfers were traced, has been explained in
detail. The admissibility of the computer-generated information, that
was corroborated
by other evidence, has been argued and established
and in any event, it is in the interests of justice that the relevant
account
statements be admitted.
Inter alia
, applicant's
representative provided the court with an extensive document titled
Analysis of Flow of Funds, that was very useful,
the contents of
which were not persuasively or at all disputed; no compelling reason
was proposed by respondents why the reflected,
relevant statements
were not credible or should be disregarded.
29.
As noted, no
bona fide
or reasonable grounds of defence of any
substance have been raised by respondents to resist their
sequestration. There is no merit
in any points raised, be it
in
limine
or otherwise belatedly raised, on relevant issues, to
substantiate a defence. The points raised
in limine
are devoid
of any merit.
30.
I am persuaded that it will be to the advantage of Adelakun's and the
Trust's creditors
that the respondents be finally sequestrated.
Millions of Rand are unaccounted for and Worldpay has set out in its
affidavits why
it would be to the benefit of creditors for the
estates of the respondents to be sequestrated and insolvency
enquiries conducted
to establish the whereabouts of assets that may
be available to creditors. The only response of the respondents to
these evident
conclusions is a bald assertion that they do not have
creditors, which must be and has been shown to be, patently untrue.
The conduct
of Adelakun in relation to these matters indicate
fraudulent dealings with far-reaching consequences that justify
investigation
and interrogation and the final winding up of the
estates, to establish the advantage to creditors.
31.
When applicant had established the flow of funds relating to
'rejected transactions'
from its accounts, some funds having
been transferred to accounts of Adelakun with FNB in Cape Town, it
obtained an order in this
court on 6 December 2018 freezing the
accounts with FNB that Adelakun had access to, as referred to above.
It also obtained relief
that its representatives may inspect the bank
statements relating to these accounts, which provided interesting
insights. The Trust's
Primary FNB account reflected a balance of
R376.57 in August 2018 before the misappropriated funds were
transferred into the account.
After 16 August 2018, when the fraud
had been detected, an amount in excess of R29 million was transferred
into this account in
seven payments, referring to the Touch of Fame
Group, (referred to by Adelakun as a company he was involved with) as
transferor.
The connexion of this account with Adelakun has been
established.
32.
Further outbound transfers and card purchases were indicated and
shown from the said account
in vast amounts, while finally, on 20
October 2018, only the amount of about R570,000 remained in the
account. Some transfers in
vast amounts, exceeding R 3.3 million,
were allegedly linked by date and amount to Adelakun's personal FNB
account that had reflected
a nought balance on 15 August 2018, before
the fraud and before the misappropriated funds were transferred to
this account. Transfers
were effected via internet, mobile banking
apps, or ATM transfers. A proper assessment of the account reflects
that large sums
of money remain unaccounted for, as it could not be
established where the funds had been on-transferred to. Needless to
say, the
reason for these transfers of vast amounts of money, into
and out of accounts linked to respondents, remain unexplained.
33.
Further details relating to information obtained from representatives
of FNB, of an application
brought by another entity, related to
Adelakun to uplift a hold that had been placed on two other accounts
linked to Adelakun,
that had been frozen, after Worldpay's funds were
traced to the accounts, do nothing to persuade me of the
bona
fides
or innocence of the respondents. A different application,
not before me, is involved in this other matter that also allegedly
indicates
and demonstrates transfers of funds and ostensible money
laundering on a large scale.
34.
Having considered the evidence before me holistically and in context,
both as provided by
applicant in support of its claims and as
presented by respondent(s) in their defence, I am satisfied that the
requirements for
final orders of sequestration have been met and
accordingly that the provisional sequestration orders should be
confirmed.
35.
Case
19409/2018
, the interim anti-dissipation order, was
postponed on 12 September 2019, and the
rule nisi
later
extended, to 3 February 2020, when the matter will be dealt with and
hopefully finalised .
ORDER
1.
Final sequestration orders are granted in cases
3484/19 and
3485/19
.
2.
The costs of the sequestrations, including reserved costs in respect
of any extensions
of return days or postponements, save where orders
in this regard have already been made, will be costs in the
sequestrations.
E
STEYN
Judge
of the High Court
Cape
Town