CCP Graduate School Limited v National Westminster Bank Plc & Anor
[2024] EWHC 581 (KB)
Kenneth Larsson v Revolut Limited
4 June 2024
[2024] EWHC 1287 (Ch)
High Court
A man lost money to a fraudster who used Revolut accounts. He sued Revolut, but the court said Revolut didn't owe him a duty to stop the fraud. However, the court let him try again to prove Revolut acted dishonestly in helping the fraudster.
Key Facts
- •Mr. Larsson, a Revolut customer, was a victim of an authorized push payment fraud.
- •Fraudsters induced Mr. Larsson to transfer CHF 466,617.73 to five Revolut accounts (Destination Accounts) under the guise of purchasing shares in a non-existent entity.
- •The Destination Accounts were opened by individuals other than Mr. Larsson.
- •SWIFT messages showed inconsistencies between the named beneficiary (Mr. Larsson) and the actual account holders.
- •Revolut rejected a sixth payment attempt by Mr. Larsson, but it's unclear why the first five were processed.
- •Mr. Larsson sued Revolut for breach of contract/tort, unjust enrichment, and dishonest assistance in a breach of trust.
Legal Principles
Test for strike out or summary judgment under CPR 3.4(2) and CPR 24.3.
CPR 3.4(2), CPR 24.3
Principles applicable to summary judgment applications as formulated in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch).
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
A bank's duty to its customer, including the Quincecare duty (duty not to execute a payment instruction if the bank has reasonable grounds to believe it's fraudulent).
Barclays Bank plc v Quincecare [1992] 4 All ER 363, Philipp v Barclays Bank UK plc [2023] UKSC 25; [2024] AC 346
The Quincecare duty does not extend to third parties or where the customer unequivocally authorized the payment.
Philipp v Barclays Bank UK plc [2023] UKSC 25; [2024] AC 346, JP SPC 4 v Royal Bank of Scotland [2022] HKPC 18
Recipient banks do not owe a duty to the payer to pay money only to the beneficiary identified in the payer's instructions.
Abou-Rahmah v Abacha [2005] EWHC 2662 (QB)
Incremental approach to recognizing a duty of care in novel situations, considering foreseeability, proximity, and fairness, justice, and reasonableness (Caparo factors).
Benyatov v Credit Suisse Securities (Europe) Ltd [2023] EWCA Civ 140
Constructive trust arises when property is obtained by fraud.
Westdeutsche Landesbank Girozentrale v London Borough of Islington [1996] AC 668
Dishonest assistance in a breach of trust requires a breach of trust, assistance in that breach, and dishonesty.
Grant and Mumford, Civil Fraud, Law, Practice & Procedure
Wilful blindness is sufficient to satisfy the test for dishonesty.
Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWCA 257 (Ch)
Outcomes
Claims in contract and tortious duty of care were struck out.
Revolut did not owe Mr. Larsson the alleged contractual or tortious duties. Revolut's role was as a recipient payment services provider, acting on instructions from the Destination Account holders, not Mr. Larsson. The court rejected the argument that Revolut had assumed responsibility to protect Mr. Larsson.
Claim in dishonest assistance was not struck out, but Mr. Larsson was given the opportunity to amend the pleading.
The claim in dishonest assistance was not sufficiently pleaded (lack of detail on how the trust arose, breach of trust, and Revolut's assistance), but the court deemed it arguable that a constructive trust arose and allowed amendment to address deficiencies.