Enforcement through innocent third party bank
Two forged cheques, each for USD500,000, had been presented by two men and as a result USD1,000,000 had been transferred to accounts in their names. The plaintiff sought to trace assets through the banks involved.
Held: The court approved the use of Norwich Pharmacol procedures in actions where those who have been deprived of property have sought to obtain from banks and others information to enable them to trace the assets. The bank, though involved through no fault of their own in the wrongful acts of others, came ‘under a duty to assist [the plaintiffs] by giving them and the court full information and disclosing the identity of the wrongdoers’, with an important caveat that: ‘This new jurisdiction must of course be carefully exercised. It is a strong thing to order a bank to disclose the state of its customers account and the documents and correspondence relating to it.’ However the court would, if necessary, make a more wide-ranging order.
Lord Denning MR said: ‘The plaintiff who has been defrauded has a right in equity to follow the money. He is entitled, in Lord Atkin’s words, to lift the latch of the banker’s door: see Banque Belge pour l’Etranger v Hambrouck [1921] 1 K B 321, 355. The customer, who has prima facie been guilty of fraud, cannot bolt the door against him. . . If the plaintiff’s equity is to be of any avail, he must be given access to the bank’s books and documents – for that is the only way of tracing the money or of knowing what has happened to it: see Mediterranea Raffineria Siciliana Petroli Spa v Mabanaft GmbH (unreported). So the court, in order to give effect to equity, will be prepared in a proper case to make an order on the bank for their discovery.’
Lord Denning MR
[1980] 1 WLR 1274, [1980] 3 All ER 353
England and Wales
Citing:
Cited – Norwich Pharmacal Co and others v Customs and Excise Commissioners HL 26-Jun-1973
Innocent third Party May still have duty to assist
The plaintiffs sought discovery from the defendants of documents received by them innocently in the exercise of their statutory functions. They sought to identify people who had been importing drugs unlawfully manufactured in breach of their . .
Approved – A v C (Note) ChD 1980
The plaintiffs said the first defendant had defrauded them of substantial sums, and implicated other defendants. They claimed against five defendants variously for conspiracy to defraud and deceit and for breach of warranty. They also sought to . .
Cited – Banque Belge pour L’Etranger v Hambrouck 1921
Money was stolen by a thief. He then paid it by way of a gift into the bank account of the woman with whom he was living. The victim claimed its return from the woman and her bankers. GBP315 of the balance in her account represented part of the . .
Cited – Upmann v Elkan CA 5-Jun-1871
The defendant freight forwarding agent was innocently in possession of consignments of counterfeit cigars in transit to Germany through a London dock. The action was not for discovery, but for an order restraining the forwarder from releasing the . .
Cited by:
Cited – Mohamed, Regina (on the Application of) v Secretary of State for Foreign and Commonwealth Affairs (No 1) Admn 21-Aug-2008
The claimant had been detained by the US in Guantanamo Bay suspected of terrorist involvement. He sought to support his defence documents from the respondent which showed that the evidence to be relied on in the US courts had been obtained by . .
Cited – A J Bekhor and Co Ltd v Bilton CA 6-Feb-1981
The plaintiff had applied for disclosure of assets under the Rules of the Supreme Court in support of a Mareva freezing order. The rules were held not to provide any such power: disclosure of assets could not be obtained as part of discovery as the . .
Cited – Cartier International Ag and Others v British Telecommunications Plc and Another SC 13-Jun-2018
The respondent ISP companies had been injuncted to stop the transmission of websites which infringed the trade mark rights of the claimants. The ISPs now appealed from the element of the order that they pay the claimants’ costs of implementing the . .
Cited – Kryiakou v Christie’s QBD 2017
Warby J summarised the five criteria for the grant of a bankers Trust order: there must be good grounds for concluding that the money or assets about which information is sought belonged to the claimant.
whether there is a real prospect that . .
Cited – Fetch.AI Ltd and Another v Persons Unknown Category A and Others ComC 15-Jul-2021
Cryptocurrency Action
The claimants sought damages and other remedies saying that the unknown defendants had obtained access to the private key guarding their crypto currency assets, and then sold them at an undervalue, acquiring substantial profits for themselves in . .
Lists of cited by and citing cases may be incomplete.
Updated: 30 August 2021; Ref: scu.272823