Bank Notes

I - Illegality

18/3/20

BANK ST PETERSBURG PJSC v ARKANGELSKY [2020] EWCA Civ 408

Reviews principles on which an appellate court can interfere with findings of fact made by a trial judge [30] and the standard of proof required in respect of allegations of dishonesty [44]. In an unusual case in which both parties had behaved dishonestly, the trial judge had applied too high a standard of proof. He ought to have asked what explanation was more probable than not, having taken account of the nature and gravity of the allegation [51] [117]. He should also have stood back and considered the effects and implications of the facts he had found taken in the round [59]. A 22 month delay in writing the judgment had been inexcusable. The unwritten rule is that judgments should be delivered within 3 months [78] but the delay was not of itself a reason to allow the appeal. Also considers principles on which a claim can be barred by illegality [87], and the impact of ‘inequality of arms’ at trial [94].

13/9/18

STOFFEL & CO v GRONDONA [2018] EWCA Civ 2013

A claimant involved as borrower in a mortgage fraud was not prevented from obtaining damages from negligent solicitors who had acted for the claimant in the transaction. Considers principles of sham transactions and illegality.

10/8/15

EUROBANK ERGASIS SA v KALLIROL NAVIGATION COMPANY LIMITED [2015] EWHC 2377 (Comm)

It was arguable that part of a loan agreement had comprised an illegal commission under Greek law. The loan agreement was governed by English law. Applying Ralli Bros v Compania Naviera Sota Y Aznar (1920), the illegality provided a triable defence to the claimant’s claim for repayment of that tranche. This did not, however, provide a defence to a claim in respect of a further tranche, nor in respect of monies due under a separate loan agreement. Security for costs of a counterclaim was ordered.

22/4/15

JETIVIA SA v BILTA (UK) LTD [2015] UKSC 23

An application to strike out a claim by a company on grounds of ex turpi causa / illegality failed principally because the alleged wrongful activity of the claimant company’s directors and shareholder could not be attributed to the company. Knowledge cannot be attributed to a company if the company is the victim of wrongdoing by its directors, or of which its directors had notice, and the claim is brought by the company’s liquidator as a result of the wrongdoing. The decision in Stone & Rolls v Moore Stephens (2009) is to be confined to its own facts. It makes no difference if the defendants are out of the jurisdiction because section 213 Insolvency Act 1986 has extra-territorial effect so a liquidator can bring a fraudulent trading claim under the section against persons domiciled abroad.

12/3/15

RTA (BUSINESS CONSULTANTS) LTD v BRACEWELL [2015] EWHC 630 (QB)

A contract made by an unregistered estate agent was unenforceable on grounds of illegality. Principles of illegality for breach of a statute considered [36].

29/7/14

PATEL v MIRZA [2014] EWCA Civ 1047

Money paid to a foreign exchange broker for spread betting on movements in listed share prices was recoverable. The spread betting company was a professional intermediary which acquired a security by entering into a contract for differences in the form of the spread bet. The broker had used insider information so an offence had been committed under s 52 Criminal Justice Act 1993, and the arrangement amounted to a criminal conspiracy. But the bet was not in fact placed and so long as an illegal contract has not been carried into effect to any extent, money paid under it can be recovered.

10/7/13

PATEL v MIRZA [2013] EWHC 1892 (Ch)

Money paid to a foreign exchange broker for spread betting on movements in listed share prices was not recoverable. The spread betting company was a professional intermediary which acquired a security by entering into a contract for differences in the form of the spread bet. The customer had relied on the company, the broker had used insider information so an offence had been committed under s 52 Criminal Justice Act 1993, and the arrangement amounted to a criminal conspiracy. Although the bet was not in fact placed, the illegality prevented recovery on grounds of unjust enrichment, as money held on trust, or as money for which an agent was liable to account. Money can be recovered if the payer resiles from the transaction voluntarily before an illegal purpose is performed, but here the transaction did not proceed because the bet was never placed by the broker so the claimant could not be said to have withdrawn voluntarily.

Comment

13/5/13

MELLI BANK PLC v HOLBUD LTD, (Comm)

The fact that an Iranian bank had its assets frozen on being designated under Council Decision 2008/475/EC, did not prevent a facility agreement from being performed, nor had the agreement been frustrated. The defendant could have sought a licence to continue to make payments to the bank, but had failed to do so. The defendant had not accepted any repudiation of the agreement and was therefore liable for the commitment fee payable to the bank.

17/10/12

PARKINGEYE LTD v SOMERFIELD STORES LTD [2012] EWCA Civ 1338, [2012] 2 Lloyd's Rep 679

The defendant contracted with claimant to monitor and charge customers parking beyond a free parking period at the defendant’s stores. Although the claimant had made some incorrect statements in letters pursuing defaulting customers, applying a proportionality test any illegality in performance was insufficient to justify the defendant’s repudiation of the contract.