Simetra Global Assets Ltd & Anor v Ikon Finance Ltd & Ors

Claims for dishonest assistance, deceit and unlawful means conspiracy require proof of the relevant dishonest conduct, causation or reliance, and participation in the alleged wrongdoing. A claimant cannot establish liability by relying on misleading material where it did not itself rely on that material. A transaction under Insolvency Act 1986, section 423 also requires proof that the transaction was entered into for the statutory purpose of putting assets beyond a claimant’s reach or prejudicing its interests. The court rejected the claims where there was no dishonesty, no reliance, no conspiracy and no evidence of the statutory purpose.

The claimants, investment companies operating a foreign-exchange trading model, alleged that the Ikon defendants and an individual defendant had assisted fraud, committed deceit and participated in an unlawful means conspiracy. They also challenged the return of capital by Ikon Finance to Ikon Europe under section 423 of the Insolvency Act 1986.

The evidence included correspondence apparently confirming very substantial trading-account balances. The court found that the accounts were demo accounts, that the correspondence did not establish actual balances, and that the claimants had not proved reliance, dishonesty or participation in a conspiracy. The central issues were whether the defendants were liable for the alleged wrongdoing and whether the return of capital had the purpose required by section 423.

1. The claims against the Ikon defendants and Mr Jagannath failed. The court found no dishonesty on their part, no deceit, no reliance by the claimants on anything they had done, and no conspiracy between them or with Mr Daskaleas.
2. The correspondence concerning three very substantial balances related to demo accounts. Demo accounts were notional accounts used for testing and did not contain actual funds. Although the correspondence created a risk of misleading an uninformed investor, the claimants themselves did not prove that they relied on it. The court also found that the relevant individuals had not acted dishonestly, applying the objective standards identified in Ivey v Gaming Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67 at [62]–[63].
3. The claimants’ allegations that the defendants assisted breaches of fiduciary duty, committed deceit or joined an unlawful means conspiracy therefore failed in every material respect. The court also found that the claimants had received back more than they had transferred during the relevant period.
4. The section 423 claim also failed. The court doubted whether the return of capital was a “transaction” within section 423 of the Insolvency Act 1986. In any event, the claimants did not establish that the return of US$5 million was made for the purpose of putting assets beyond their reach or otherwise prejudicing their interests.
5. The claims were dismissed.