Victor Pisante & Ors v George Logothetis & Ors

Restitution following rescission is directed to restoring the parties to the actual status quo ante, not to placing them in the counterfactual position they would have occupied absent the deceit. English law does not recognise partial rescission or a hybrid remedy constructing a different bargain. Restitution and damages remain distinct: restitution reverses the immediate consequences of the contract, while damages compensate loss caused by the wrong. Restitution may therefore produce a windfall. A fraud victim’s interest in fuller recovery does not displace procedural fairness and finality. A late amendment introducing a substantially new damages case may be refused where it should reasonably have been advanced at trial.

The claim followed an earlier trial judgment in which Swindon was held entitled to rescind ETFA 3 because it had been induced by deceit. The January order required Libra to restore US$6,250,000, made a payment-on-account order against Mr Logothetis, and adjourned consequential relief, damages and interest.

The consequential hearing concerned the further US$2,741,250 representing the value attributed to ETFA 2, damages for deceit, Swindon’s proposed loss-of-opportunity amendment based on counterfactual ETFA 3*, costs, and interest.

1. Restitution. The counterfactual finding that Swindon would have entered into ETFA 3* did not reduce the restitution due on rescission. The relevant target was the actual status quo ante ETFA 3. Libra was therefore ordered to pay US$2,741,250 in addition to the US$6,250,000 already ordered.
2. Rescission discharged the whole bargain ab initio et totum. English law did not permit partial rescission, partial restitutio, or a hybrid solution creating a new bargain.
3. Restitution was distinct from reparative damages. It reversed the immediate consequences of the contract and could produce a windfall. Mr Logothetis was liable in deceit damages for US$8,991,250, subject to qualifying prior restitutionary payments by Libra.
4. The amendment application was refused. The proposed loss-of-opportunity claim should reasonably have been advanced at the original trial. Although it might have produced fuller recovery, reopening the proceedings would undermine finality, procedural fairness and the orderly administration of justice.
5. There was no presumption that a successful fraud claimant should receive indemnity costs. However, the defence involved unreasonable conduct going beyond the norm. Costs incurred on or after 1 March 2021 were ordered to be assessed on the indemnity basis.
6. Compound interest applied to Libra’s equitable restitutionary liability. Interest on the deceit damages and Piraeus Bank shares award was simple interest.

The judgment followed the earlier trial judgment, [2022] EWHC 161 (Comm), and determined consequential relief, damages, costs and interest.