Stuart Charles Daburn v Persons Unknown & Ors

Permission to seek summary judgment against defendants who have not acknowledged service may be granted where the procedural safeguards are satisfied, the court has jurisdiction, and enforcement advantages justify the application.

Summary judgment is appropriate where there is no realistic basis for a defence. Uncontradicted evidence that is not obviously incredible may be accepted, particularly where the defendants have chosen not to participate. Persons unknown may be subject to personal and proprietary judgment where they can in principle be served by an effective alternative method. Where communication of proceedings to an anonymous defendant cannot realistically be shown, the claim should be stayed rather than determined summarily.

The claimant alleged that he had been induced to transfer more than 48 Bitcoin and approximately £217,000 in a cryptocurrency fraud. He brought personal claims, including unlawful means conspiracy and unjust enrichment, and proprietary claims concerning the transferred assets and traceable proceeds.

The defendants included named companies, Persons Unknown Category 1, alleged to be the fraudsters, and Persons Unknown Category 2, alleged to control wallets containing the proceeds. The claimant sought summary judgment against all defendants except Kyrrex Limited. The central issues were whether permission should be granted to make the application, whether the evidence established the claims, and whether judgment could properly be entered against the two categories of Persons Unknown.

1. Permission. Permission was granted to seek summary judgment against all defendants except Persons Unknown Category 1. The relevant considerations included protecting a defendant’s opportunity to participate and challenge jurisdiction, the court’s jurisdiction, and the practical enforcement advantages of summary judgment over default judgment. Those considerations were satisfied for the defendants who had been validly served and had not challenged jurisdiction.
2. Summary judgment test. Applying the approach in Easyair Ltd v Opal Telecom Limited [2009] EWHC 339 (Ch), judgment should be entered where there is no realistic basis for a defence. A merely fanciful defence is insufficient. The inquiry focuses on the reality of the defence.
3. Evidence. The claimant’s evidence was uncontradicted and was not obviously incredible. Following the approach in Boonyaem v Persons Unknown and Others [2023] EWHC 3180 (Comm), it was accepted without qualification. The claimant therefore established the fraudulent scheme and the resulting loss.
4. Substantive claims. Funds obtained by fraud were impressed with a constructive trust at the moment of transfer, applying Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669. The claimant consequently had personal claims for unlawful means conspiracy and unjust enrichment, together with proprietary claims against recipients and persons controlling traceable proceeds.
5. Persons Unknown. The principle in Cameron v Liverpool Victoria Insurance Co Ltd [2019] UKSC 6; [2019] 1 W.L.R. 1471 permitted, in principle, personal judgment against an unknown defendant where service by communication could be established. Category 2 defendants could have participated and asserted a bona fide purchaser for value without notice defence, but none did so. Judgment was therefore entered against them and the other defaulting defendants on the personal and proprietary claims.
6. Effective communicated service could not realistically be shown against Category 1: emails had bounced back and WhatsApp messages lacked confirmation of receipt or reading. The proceedings against that category were stayed, with liberty to restore. Category 2 defendants were given 21 days after service of the order to apply to vary or set aside the judgment.

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