Foreign land investment fraud help requested

Simon102

In 2007 I purchased a 900sqm plot of land in Montenegro with the help of my then girlfriends father. This was destined to be an investment with eventually a building being added to the land.

Later  I also invested to bring water and electricity to the land, the total investment in the project being £15k~.

After the 2008 economic downturn, the project struggled to take off, and I asked for my ex partners father to look at selling the land for me, which he was also looking to do at the same time with his neighbouring investments. Needless to say, the land did not sell.

A few years later my partner and I separated and sold our house etc. Subsequently I have again asked for her father to look into selling the land, however I now receive no reply to the emails. - There has now been no reply to 4 emails over the course of a year.

I have never had a formal contract with him, and was always told that the land needs to be in his wife’s name as she is Serbian. The only proof of the investment I have is some emails and bank transfers. I have repeatedly requested a contract and did get so far as getting one signed and sent to him, but never returned.

Obviously I appreciate with age and experience that this was both a poor investment and a risky way to do business, but I am wondering if you can help  to determine my legal standing. I have recently written to offer the proposal that they buy me out for the cost of my investment, but again receive no reply.

I am aware that the statute of limitations may apply to the initial money transfers, but is there any other case here? as even at the time of the 10 years passing, it was not clear that this was a fraud in the making, and communication was still ongoing.

I would be keen to understand what I can do to recover the investment, or to improve my legal standing of proof of ownership.

Initially I would be interested in your advice on if there is anything I can do legally to pursue this claim-

1. can this go through small claims (MCOL route) despite the time that has passed since transfer of money
2. what would the police / action fraud etc do? any point?
3. can anyone suggest a solicitor that would be suitable? - any experience?

Thanks in advance.

eskbanker

Simon102 said:

I have repeatedly requested a contract and did get so far as getting one signed and sent to him, but never returned.

Under which jurisdiction was this contract?  I'd have thought it would be unusual for it to be anything other than the local one, and if so then any legal rights you have would be those associated with Montenegran law, rather than anything to do with UK laws and organisations, despite the money being transferred (presumably) from a UK bank?

Even if you can establish that you have some sort of claim on owning this little parcel of land, I strongly suspect that actually being able to sell it would be an entirely different story, so it won't be what you want to hear but I imagine that, especially given your lack of meaningful documentation, you're going to need to write this off....

Simon102

eskbanker said:

Under which jurisdiction was this contract?  

Thanks for the quick reply. the proposed contract appeared to be UK based. both myself and the seller were UK citizens living in the UK at this time, and the seller did have some K companies dealing with land investment in Montenegro.
The contract was never signed by the seller.

eskbanker

The way you've copy/pasted that renders it tricky to read but I don't see any references to UK law and indeed there are multiple references to Montenegran law, the first of which ("The ownership of land will be transferred to (The Purchaser) who is financing the land purchase when Government of Montenegro passes the law that private foreign buyers can own the land") appears to imply that your ownership would be a conditional future event?

I think you have no chance of interesting banks, or any UK crime-related bodies such as Action Fraud, in what is essentially a commercial dispute.  A solicitor experienced in Montenegran law (don't expect to be killed in the rush!) might be able to offer advice - who drew up that draft contract for you?

Simon102

Thanks for the information so far. The only solicitor I have spoken to, who was familiar with UK and Montenegrin law, thought that the statue of limitations would apply, and that this would prevent a UK case, which is where they thought otherwise a case for illegally obtained funds might be possible (obviously I respect this advice, and I am not ignoring it, rather seeking a second opinion or two). because of this they would not continue.

Apologies for the formatting, I've just been cleaning it up. (some form fields in there it seems). It was sent to me by the seller. I don't know who drew it up for him, and the MS Word doc has the seller as the author.
Here it is cleaned up for ease:

THIS AGREEMENT is made and entered into and effective as of 1st of March 2010 by and between:

Mr. XXXXX (Trustee).  Address: XXXXXX, UK and

Mr. XXXXX (Purchaser) Address:

This agreement is made in respect of: Buying land in the Montenegro town of Zabljak, registered land parcel number XX, (from which 900 sq/m will be subdivided), K.O. Borje 2, Mitrov Grob, Montenegro.

Trustee will buy land in the Montenegro town of Zabljak: amount 900 sq. meters (registered land parcel number XX). The land will be registered in the trustee’s name.

The ownership of land will be transferred to (The Purchaser) who is financing the land purchase when Government of Montenegro passes the law that private foreign buyers can own the land.

Therefore: The amount of 18.390 € for the purchase of 900 square meters of the land in Zabljak Montenegro will be paid into trustees account by purchaser.

Purchaser and trustee agree that the total cost involved in this project, including administrative expenses for transferring the land into the Purchaser’s name will be summarized at the end of a process.

Upon transfer of land, Purchaser will have to pay a tax (part of Montenegro law, for both national and foreigners).  Currently, (1st of March 2010) this tax is 3% of the value of the land. The value of the land is dependent on land survey by a surveyor.

In the event that transfer of ownership of land does not take place – including but not exclusively:

            Death of Trustee

            Non-completion of land purchase

The Trustee’s partners will change ownership to the Purchaser.

In the event that the Purchaser ceases further funds – reasons for this include:

            No finances available

            Death of Purchaser

The Trustee will use Purchaser’s Partner/Next of kin to change ownership of the land.

All expenses will be paid by Purchaser’s Partner/Next of kin.

ENTIRE AGREEMENT: This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein.

AMENDMENT: This Agreement may not be amended or modified except by instruction in writing signed by all of the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective the date first set forth above.

SFindlay

Where is the Fraud??? Seems to me you are in agreement that the land was purchased aren't you?? You agreed at time of handing money over land would not be in your name didn't you (as I presume restrictions on foreign nationals owning land from what you say) ? 

Looks like civil dispute following breakdown of a relationship and not any Fraudulent activity but first thing to clarify is you say 4 emails over course of a year have been ignored? Who's to say these emails have been recieved?? Are you certain the ex's father still has access to this email or is even still alive?? 

Malthusian

As I understand it this arrangement was illegal under Montenegrin law. There would be zero point in passing a law that says that foreigners aren't allowed to own land, unless they get a Montenegrin to stick their name on it as Trustee, then it's fine.

As far as Montenegrin law is concerned the land belongs to the ex's father or his wife (your post says the latter but the agreement says the former) and your beneficial interest in it doesn't exist. I'm guessing that even if the law on foreign ownership ever changed, the land wasn't transferred, and even if it had changed, the arrangement prior to the law being changed would still have been illegal.

So at best this is a loan to the ex's father without any repayment terms (which he used to buy some Montenegrin land for himself, or his wife) and the starting point would be to ask for the money back. (This is assuming you aren't liable for any penalties in Montenegro for trying to circumvent their laws.) I would rate the chances of getting it back as very low and there would be a very high chance of throwing good money after bad in solicitors' fees. People willing to break the law tend not to be reliable debtors.

There is zero chance of the police being interested, this is a civil dispute.

steampowered

You invested in a highly speculative real estate project just before a massive recession.

It may well be that the land is simply almost worthless at this point, and that the development project is not viable. It doesn't necessarily mean the father did anything wrong.

If you could somehow prove the father was in breach of contract, there may be a claim. In the UK the limitation period is 6 years from the breach of contract. But:
- It's very difficult to prove what was agreed, i.e. what the terms of the contract were, if nothing was put in writing.
- It is not clear which governing law would apply to the contract - was the contract concluded in the UK or elsewhere?
- If the father is not resident in England or Wales, you would need court permission to serve proceedings outside the jurisdiction.
- As the amount in question exceeds £10k, this is not a "small claim", so you'll be paying the father's legal costs if you lose the case.

It sounds like this is not worth pursuing for the sake of £15k.

Simon102

SFindlay said:

Where is the Fraud??? Seems to me you are in agreement that the land was purchased aren't you?? You agreed at time of handing money over land would not be in your name didn't you (as I presume restrictions on foreign nationals owning land from what you say) ? 

Looks like civil dispute following breakdown of a relationship and not any Fraudulent activity but first thing to clarify is you say 4 emails over course of a year have been ignored? Who's to say these emails have been recieved?? Are you certain the ex's father still has access to this email or is even still alive?? 

Hello and thanks for replying.
To be honest I do not think at the time I was aware that it would not be in my name, I believe that this was released to me after the fact, however, I cannot remember exactly and certainly have no proof.

I have sent one last email yesterday stating that i am seeking legal action and I got a very quick reply, so the email address is alive as is the Ex's father..

He has asked to discuss options.

Simon102

Malthusian said:

As I understand it this arrangement was illegal under Montenegrin law. There would be zero point in passing a law that says that foreigners aren't allowed to own land, unless they get a Montenegrin to stick their name on it as Trustee, then it's fine.

As far as Montenegrin law is concerned the land belongs to the ex's father or his wife (your post says the latter but the agreement says the former) and your beneficial interest in it doesn't exist. I'm guessing that even if the law on foreign ownership ever changed, the land wasn't transferred, and even if it had changed, the arrangement prior to the law being changed would still have been illegal.

So at best this is a loan to the ex's father without any repayment terms (which he used to buy some Montenegrin land for himself, or his wife) and the starting point would be to ask for the money back. (This is assuming you aren't liable for any penalties in Montenegro for trying to circumvent their laws.) I would rate the chances of getting it back as very low and there would be a very high chance of throwing good money after bad in solicitors' fees. People willing to break the law tend not to be reliable debtors.

There is zero chance of the police being interested, this is a civil dispute.

Hello, Thanks for the reply.
Thats a very interesting piece of information on the illegality under Montenegrin law, although I imagine this is subject to limitation.
However, I like the route you elude to that this can therefore only be classed as a loan. this is a route that i will think about before I discuss this with him.

Thanks again

MinuteNoodles

Even if you want to think of it as a loan you don't have a loan enforceable in UK law. There was nothing put in writing with both parties signing it when the money transferred hands at the time to state it was a loan, what the payment terms were, etc etc etc. You cannot prove it was a loan nor in UK can you retrospectively decide to change your mind and unilaterally decide that the investment was a loan. All documentation you do have clearly shows it was an investment. Not only that as it was in 2008 it too would be statute barred.

You made a bad investment, you ignored all the great big massive neon lit warning signs. The money is gone, you've lost it as far as pursuing it in the UK is concerned.