Bawany v The Royal Bank of Scotland International Ltd & Anor

Summary judgment is appropriate where the claimant has no real prospect of success and there is no other compelling reason for trial. The court assesses whether the case has reality, rather than deciding probability, but may reject a case that is unsupported by evidence or legally defective. Pleadings may be struck out where they disclose no reasonable grounds or are so vague and incoherent that they obstruct the just disposal of proceedings. A receiving bank generally owes no duty of care to a non-customer in respect of funds paid into its customer’s correctly identified account. A restitutionary claim also requires enrichment at the claimant’s expense. A parent company is a separate legal person, and corporate veil arguments require exceptional circumstances.

The claimant sought restitution of CHF 3 million allegedly transferred through a SWIFT message to an account held by Centurion Management Services Ltd with the first defendant. He alleged that the defendants owed him duties to ring-fence or protect the money, and advanced claims including negligence, unjust enrichment, breach of trust, fiduciary duty and dishonest assistance.

The defendants applied for summary judgment and, alternatively, strike out. The claimant had never been a customer of the first defendant. The second defendant was its holding company and was not a bank. The court also considered an earlier judgment concerning the claimant’s involvement in the underlying fraud and the expiry of the relevant limitation period.

1. Applications granted. The first and second defendants obtained summary judgment and, alternatively, strike out under CPR 3.4(2)(a) and (b).
2. Under CPR 24.2, both limbs must be satisfied. The applicant must show grounds for believing that the claim has no real prospect of success and that there is no other compelling reason for trial. The court does not conduct a summary trial or determine probability. It disregards cases that are false, fanciful or imaginary, but factual disputes supported by credible evidence ordinarily belong at trial.
3. The pleadings were vague, confusing and opaque. They did not explain the claimant’s alleged interest in the money, the underlying transaction, or the legal basis for imposing liability. The draft amended particulars did not cure those defects.
4. The SWIFT message directed payment into Centurion’s account through field 59. Field 70 was remittance information and, without more, did not impose an obligation on the first defendant to pay the money to the claimant or to return it. The first defendant was not the claimant’s bank or customer-facing fiduciary.
5. The negligence claim was bound to fail. Applying the approach in Abou-Rahmah v Abacha [2005] EWHC 2662 (QB) and the principles in Caparo Industries PLC v Dickman (1990) AC 605, there was no sufficient proximity or special relationship to justify a duty concerning purely economic loss.
6. The unjust enrichment claim failed because the money was paid by Mr Schenk, not the claimant, so enrichment was not at the claimant’s expense. The first defendant received it as Centurion’s agent and paid it away before notice of the alleged restitutionary claim. The claims based on trust, fiduciary duty and dishonest assistance also lacked the necessary relationship, primary wrong, assistance and standing.
7. The second defendant was a separate legal person, had not provided banking services, and had done nothing alleged to constitute the wrongdoing. There was no pleaded basis for a duty to supervise the first defendant. The corporate veil argument was bound to fail applying Prest v Petrodel [2013] UKSC 34.
8. The claims were also time-barred. The claimant had not relied on section 14A or section 32 of the Limitation Act 1980. The pleadings independently disclosed no reasonable grounds and were likely to obstruct the just disposal of proceedings.