Logix Aero Ireland Limited v Siam Aero Repair Company Limited

In contractual causation, a voluntary intervention by a third-party fraudster will normally break the chain where it makes the breach merely an opportunity for the loss. A breach may remain an effective concurrent cause, but the question is whether the intervention has destroyed its causative potency or obliterated the defendant’s wrongdoing. The Macmillan decision is confined to a specific contractual duty to prevent the very fraud and loss that occurred; it does not establish a general rule that fraud never breaks causation. A confidentiality undertaking directed to commercial protection does not, without more, impose that special duty. Where the fraud began before the defendant’s assumed breach and the final deception and payment occurred without its involvement, the breach is only part of the opportunity for the fraud. The claim was therefore bound to fail on causation.

Logix agreed to buy two aircraft engines from Siam Aero under a predominantly non-binding Letter of Understanding containing a binding confidentiality clause. Fraudsters intercepted the parties’ emails, altered payment details in transaction documents, and caused Logix to pay US$824,900 to a Vietnamese bank account. Logix claimed damages from Siam Aero for breach of the confidentiality clause.

Heather Williams J struck out the claim under [2025] EWHC 1283 (KB). She accepted that breach was arguable but held that the loss was caused by the fraudsters and that the chain of causation was broken. Permission to appeal was granted only on causation. The central issue was whether the fraudsters’ intervention prevented Siam Aero’s assumed breach from being an effective cause of the loss.

Appeal dismissed unanimously. The Court of Appeal considered only causation. It therefore did not determine the additional grounds advanced by Siam Aero in its Respondent’s Notice.

1. The applicable threshold for striking out and summary judgment was whether the claim was bound to fail. The High Court had applied that threshold under rule 3.4(2)(a) of the Civil Procedure Rules 1998, as explained in Begum v Marcan (UK) Limited [2021] EWCA Civ 326 and Altimo Holdings v Kyrgyz Mobil Tel Ltd [2011] UKPC 7.
2. A voluntary act of a third party may break the chain through several related doctrines. The breach may cease to be the effective cause and become merely the opportunity for the loss. Alternatively, the loss may fall outside the scope of the assumed duty or be too remote. The issue was not resolved by the but for test alone. The Court referred to Galoo v Bright Grahame Murray [1994] 1 WLR 1360, Armstead v Royal & Sun Alliance Insurance Co Ltd [2024] UKSC 6, and Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48.
3. More than one event may be an effective cause. A later cause need not have lesser effect to leave the earlier breach operative. The chain is broken only where the intervention destroys the causative potency of the earlier breach or obliterates the defendant’s wrongdoing. The Court applied the reasoning in Heskell v Continental Express Ltd [1950] 1 All ER 1033, County Ltd v Girozentrale Securities [1996] 3 All ER 834, Stacey v Autosleeper Group Ltd [2014] EWCA Civ 1551, and Borealis v AB Geogas Trading SA [2010] EWHC 2789 (Comm).
4. London Joint Stock Bank Limited v Macmillan and Arthur [1918] AC 777 did not establish that fraudsters can never break causation. It rested on a specific contractual duty to prevent the very fraud and loss that occurred. The confidentiality clause here was directed to commercial protection and contained no comparable special duty to protect Logix from fraudsters manipulating information. Macmillan was therefore distinguishable.
5. On the assumed facts, the fraudsters intervened before Siam Aero’s alleged disclosures and caused those disclosures as part of their scheme. The fraudsters also independently caused the final deception and payment, without Siam Aero’s involvement. Siam Aero’s breach was therefore only part of the opportunity for the fraud and was not an effective cause of Logix’s loss.
6. It would also have been open to the High Court to conclude that the loss was outside the scope of the assumed duty or too remote. Those issues were not decided. The claim also faced significant unresolved questions concerning disclosure of Siam Aero’s own information and possible circuity of action.

• Court of Appeal (Civil Division): [2026] EWCA Civ 510. Appeal dismissed on causation. The Respondent’s Notice grounds were not considered.
• High Court of Justice, King’s Bench Division: [2025] EWHC 1283 (KB). Heather Williams J struck out the proceedings under rule 3.4(2)(a) of the Civil Procedure Rules 1998, accepting that breach of confidentiality was arguable but finding no arguable causal link to the loss.