I.F.T. S.A.L. Offshore v Barclays Bank Plc
| Jurisdiction | England & Wales |
| Judge | Sir Michael Burton GBE |
| Judgment Date | 19 November 2020 |
| Neutral Citation | [2020] EWHC 3125 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2019-000313 |
| Date | 19 November 2020 |
[2020] EWHC 3125 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Sir Michael Burton GBE
sitting as a High Court Judge
Case No: CL-2019-000313
Matthew McGhee (instructed by PCB Litigation LLP) for the Claimant
Adam Temple (instructed by TLT LLP) for the Respondent
Hearing dates: 13 November 2020
Approved Judgment
The Claimant, I.F.T. S.A.L. Offshore, is the victim of a fraud, known colloquially as an ‘authorised push payment scam’, whereby US$249,721.44, which they intended to pay in respect of their purchase of raw meat products to an Austrian supplier, was diverted by a fraudster to an account at Barclays Bank (the Respondent) specially set up for the purpose. The money was transferred by the Claimant's French bank to Barclays on 15 January 2019 and paid out by them directly to an account in the United Arab Emirates. After discovering the fraud the Claimant immediately caused its French bank to notify the Respondent of it at 11:16 am on 18th January, and at 1250: to request repayment of the money.
But it is now clear, as a result of the Norwich Pharmacal/Bankers Trust application (the “Norwich Pharmacal application”) made in these proceedings by the Claimant, that the monies had been already paid straight out by Barclays in six tranches, on the 16, 17 and 18 January, the last tranche being paid out some two hours before the notification of the fraud to Barclays.
The Claimant made the Norwich Pharmacal application, which was granted by Order dated 14 June 2019 by Mr Christopher Hancock QC, sitting as a deputy High Court judge, (“the Hancock Order”), to discover documents from Barclays evidencing the receipt and payment out of the monies. It is well established that on a Norwich Pharmacal application it is not relevant whether the bank respondent was or was not complicit in the fraud (see per Lord Woolf LCJ in Ashworth Hospital Authority v MGN Ltd [2002] 1 WLR 2033 (HL) at [30], [58].
In making the application the Claimant did not allege that Barclays were complicit, and expressly stated that it had no intention of bringing proceedings against Barclays. Mr McGhee, who appeared then, as he has appeared again before me, for the Claimant is quoted in the second witness statement of Mr Brown for the Respondent at paragraph 29 as follows: “… the simple position is that, as of today, as confirmed in writing by the solicitors instructed by my client, there is no intention to bring a claim against Barclays.”
The Respondent does not now pursue a case that the Claimant was misleading the Court or is estopped or would be committing an abuse of process, by now pursuing the Respondent. Indeed at paragraph 24 of his skeleton Mr Temple suggests that the Claimant “ may have been able to say that it had no active intention to pursue the bank at that stage… perhaps because it did not have the evidence to support such a claim”.
The Hancock Order incorporated at paragraph 3 of the Schedule an undertaking that the Claimant would not, without the permission of the Court. use any information obtained as a result of the Order for the purpose of any civil or criminal proceedings either in England and Wales or in any other jurisdiction, other than for specified purposes (which did not include bringing proceedings against the Respondent). By an Order dated 11 March 2020 by Teare J the Claimant was given permission pursuant to that paragraph “ to use documents and information obtained as a result of the Order for the purpose of reviewing that material in order to consider whether to bring proceedings against the Respondent”.
The Claimant, having now carried out that review, says that it does wish to make use of the documents obtained by the Hancock Order for the purpose of bringing proceedings against the Respondent. It wishes to consider the making of an application for pre-action disclosure against the Respondent and if appropriate to bring proceedings against the Respondent thereafter, and in a lengthy draft letter of claim has set out the basis in law upon which such claims would be made.
The principles are in the event not in dispute, that the onus is on the Claimant to show but it has cogent and persuasive reasons to make use of the documents for such purpose:
(i) Mr Temple draws attention to Chanel v Woolworth [1981] 1 WLR 485, which is the seminal authority dealing with an application for discharge of a party from an undertaking, when some significant change of circumstances is necessary. However this authority does not seem to me to be helpful where the position is expressly dealt with in the context of the discharge of an undertaking/grant of permission for collateral or subsequent use of documents disclosed in proceedings, or, as in this case, disclosed pursuant to a Norwich Pharmacal order.
(ii) The basic principle arises in the general context of permission for collateral use of disclosed documents covered by CPR 31.22. Although Eder J at first instance in Tchenguiz v Director of the Serious Fraud Office [2014] EWHC 1315 (Comm) at [18] uses the expression “the bar is high”, when referring to the need for “cogent and persuasive reasons”, the former words do not feature in the Court of Appeal in Tchenguiz [2014] EWCA Civ 1409 at [65]–[66] where Jackson LJ said as follows:
“65. Upon reviewing the authorities it seems to me that the decisions reached are highly fact sensitive. The court is weighing up conflicting public interests in a variety of different circumstances….
66. The general principles which emerge are clear:
(i) The collateral purpose rule now contained in CPR...
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