The Kingdom Bank Corporation v Moorwand Ltd

A Norwich Pharmacal order is an exceptional equitable remedy, available only where disclosure is necessary to identify or pursue an ultimate wrongdoer. The applicant must show a good arguable case that a legally recognised wrong has been committed, that an order is needed to enable proceedings, and that the respondent is mixed up in the wrongdoing and can provide the information.

The remedy cannot be used as a fishing expedition or to avoid the requirements of CPR 31.16. A claimant cannot rely solely on an existing wrong by a known party where it already has sufficient information to pursue that party. Under the Electronic Money Regulations 2011, funds paid in exchange for electronic money are not held on statutory trust and do not retain a proprietary or equitable interest capable of supporting tracing or trust-based claims.

The claimant, an offshore bank, used services supplied by Safe Payment Solutions s.r.o. (“SPS”), a Czech electronic money issuer. SPS provided payment details associated with an e-wallet held with the defendant, an English electronic money institution. After SPS stopped making payments and entered Czech insolvency proceedings, the claimant sought information about transactions, balances and onward payments relating to the e-wallet.

The claimant applied for a Norwich Pharmacal order to identify the location of its money and potential claims against the defendant or others. The defendant opposed the application on jurisdictional, threshold and discretionary grounds. The central issues were whether the claimant had established a good arguable case of a relevant wrong, whether disclosure was necessary, and whether the defendant was sufficiently mixed up in the wrongdoing.

1. Claim dismissed. The claimant failed to establish the threshold conditions for Norwich Pharmacal relief.
2. The remedy is exceptional and flexible, but its essential justification is necessity. It must not be used to investigate whether a claimant has a good arguable case or as a fishing expedition. The applicant must identify a legally recognised wrong, shown on the good arguable case standard, and must show that disclosure is needed to bring proceedings against the ultimate wrongdoer.
3. The claimant could not rely solely on SPS’s admitted failure to follow instructions and return money. SPS was already identified and the claimant had sufficient information to pursue contractual or insolvency remedies against it. A separate relevant wrong by the defendant or another unknown wrongdoer therefore had to be established.
4. The alleged agency, contractual, regulatory, negligence, proprietary, tracing, resulting-trust, constructive-trust, Quistclose-trust and unjust-enrichment claims against the defendant were speculative or unsupported. The Business Agreement did not establish that SPS acted as the defendant’s agent. Nor did the claimant show a good arguable case that it retained a proprietary or equitable interest in funds exchanged for electronic money.
5. The Court of Appeal’s decision in In re ipagoo LLP (in liquidation) established that the Electronic Money Regulations 2011 create a regulated safeguarding regime without imposing a statutory trust or preserving beneficial or proprietary interests in such funds. That reasoning was not confined to insolvency, so the proposed tracing and trust-based claims failed the threshold.
6. There was no jurisdictional bar to an NPO merely because information might also be sought under CPR 31.16. However, the claimant could not circumvent that procedure, and the availability of alternative means reinforced the absence of necessity.
7. Had the threshold been met, the defendant would probably have been sufficiently mixed up in the wrongdoing and able to provide most of the requested information. Confidentiality, delay and the English connection would not alone have defeated relief. They did not need to be finally determined because the threshold conditions failed.

First-instance decision. No appellate history was stated in the judgment.