Jeremy D. Stone Consultants Ltd & Anor v National Westminster Bank Plc & Anor

A bank receiving money for its customer is not enriched where the receipt is matched by its contractual liability to the customer. Even if enrichment is established, the bank may rely on ministerial receipt and good-faith change of position where it receives and pays out funds in accordance with its customer’s instructions.

A banker’s duty of confidentiality may justify declining to correct a third party’s mistaken understanding of transactions on the customer’s account. A relationship manager does not assume responsibility, or owe a duty of care, merely by communicating with a person interested in the customer’s business. Liability for dishonest assistance requires dishonesty.

The claimants invested substantial sums in a supposed hotel-supply business operated through Saunders Electrical Wholesale Ltd. The business was in fact a Ponzi scheme. They alleged that the bank’s relationship manager, Paul Aplin, assisted the fraud, made deceitful or negligent statements, conspired with those responsible, and that the bank was unjustly enriched by receiving their payments.

The claimants also alleged that the bank failed to comply with anti-money-laundering requirements. The central issues were whether Mr Aplin had acted dishonestly or assumed responsibility to the claimants, whether the bank had been enriched by receiving money for its customer, and whether the bank had available defences.

1. Dishonest assistance, deceit and conspiracy. The court found that Mr Aplin was honest and did not know of the fraud. He made no false statements or representations and was not party to any conspiracy. The claims therefore failed.
2. Unjust enrichment. NatWest was not enriched by payments made into SEWL’s accounts. Although it received the money, the receipt created an immediate matching liability to SEWL. The proper unjust enrichment claim was against SEWL: [243].
3. Alternatively, NatWest had a defence of ministerial receipt because it was contractually obliged to pay out sums in SEWL’s accounts according to its instructions. It also had a good-faith change-of-position defence under Lipkin Gorman v Karpnale [1991] 2 AC 548. Mr Aplin’s knowledge, from 22 February 2010, that the claimants misunderstood which account received hotel receipts did not amount to bad faith. Banking confidentiality justified withholding that information: [245]-[249].
4. The bank had not breached regulation 8 of the Money Laundering Regulations 2007. Its combination of automated transaction monitoring and relationship-management contact was appropriate and consistent with relevant guidance and industry standards. Nor had Mr Aplin breached section 330 of the Proceeds of Crime Act 2002: [250]-[254].
5. Negligence. Mr Aplin had not assumed responsibility for the accuracy of information supplied to the claimants. The circumstances did not make it fair, just or reasonable to impose the alleged duty of care. He had made no careless or false representations: [255]-[260].
6. All the claims were dismissed. It was unnecessary to determine the defendants’ further submissions on quantum.