Case details
Summary
For permission purposes, a proposed appeal is sufficient where it is realistically arguable and has a real prospect of success. It was arguable that a bank’s knowledge may put it on enquiry that a transfer involves a real possibility of fraud, giving rise to a duty to warn the customer of the kind discussed in Barclays Bank v Quincecare Ltd [1992] 4 All ER 363 and Lipkin Gorman v Karpnale Ltd [1988] UKHL 12. It was also arguable that those principles are not confined to unlawful instructions from an unauthorised or fraudulent agent. Authorities concerning inherently risky transactions, where the customer knew and assumed the risks, may be factually distinguishable. The judgment decided only permission and did not finally determine whether a duty existed.
Factual background
Electro Mechanical Installations Ltd sought permission to appeal from a decision of the High Court Civil Division before HHJ Armitage QC. The proposed appeal concerned whether a bank owed its customer a duty to warn before implementing a transfer where the bank’s knowledge might indicate a real possibility of fraud. The claimant argued that the relevant principles could extend beyond instructions given by an unauthorised or fraudulent agent, and that authorities concerning inherently risky transactions were distinguishable. The bank was not represented. The central issue was whether the proposed appeal was realistically arguable and had a real prospect of success.
Held
Permission to appeal granted. Lady Justice Gloster delivered the single judgment.
- Permission threshold. The proposed appeal was realistically arguable and had a real prospect of success. The court was therefore justified in granting permission, although with some hesitation.
- Possible duty to warn. It was realistically arguable that the facts known to the bank put it on enquiry that there was a real possibility of fraud in the transfer. On that footing, a duty of care to warn the customer might arise of the nature referred to in Barclays Bank v Quincecare Ltd [1992] 4 All ER 363 and Lipkin Gorman v Karpnale Ltd [1988] UKHL 12.
- Scope of the principles. It was arguable that the principles articulated in those authorities were not restricted to cases where instructions were unlawful because given by an unauthorised or fraudulent agent. A duty to warn could arguably arise in other circumstances. The critical question remained whether the particular facts known to the bank generated such a duty.
- Distinguishable authorities. Redmond v Allied Irish Banks [1987] FLR 307 and Winnetka Trading v Julius Baer [2012] 1 BCLC 588 were arguably distinguishable. In those cases, the transactions were inherently risky, the risks were known to the customer or claimant, and they were risks assumed by that person. The court made no final determination on the merits of the proposed duty.
The court’s approach to earlier authorities
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Appellate history
- Court of Appeal (Civil Division): On 15 January 2014, Lady Justice Gloster granted permission to appeal.
- High Court Civil Division: The appeal arose from a decision of HHJ Armitage QC. The citation and outcome of that decision are not stated in the judgment.
Lower court decision
Key cases cited
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Cases citing this case
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