Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd

Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd

The fraudulent knowledge and conduct of Mr Al Sanea should not be attributed to Singularis for the purposes of the illegality defence, as there were innocent directors and the company was not a 'one-man company'. The Quincecare duty was owed to Singularis and was breached by Daiwa, whose employees failed to act on obvious signs of fraud. The claim was not barred by illegality, causation, or an equal and opposite deceit claim. The judge's assessment of contributory negligence was within the reasonable range. The appeal was dismissed.

Parties
Claimant / Respondent: Singularis Holdings Limited (in Official Liquidation); Defendant / Appellant: Daiwa Capital Markets Europe Limited
Jurisdiction
England and Wales
Judgment Date
01 February 2018
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Bank's Duty of Care (quincecare Duty), Attribution of Knowledge and Fraud, Illegality Defence, Contributory Negligence, Directors' Duties, Liquidation and Creditor Protection
Banking Law Company Law Tort Law Bank's Duty of Care (quincecare Duty) Attribution of Knowledge and Fraud Illegality Defence Contributory Negligence Directors' Duties +1 more

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Parties

Singularis Holdings Limited (in Official Liquidation)

Claimant / Respondent

Daiwa Capital Markets Europe Limited

Defendant / Appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the defence of illegality is available to the bank to defeat a claim in negligence and breach of contract by its corporate customer
  2. 2 Whether the fraudulent knowledge and conduct of the director should be attributed to the company
  3. 3 Whether the claim is barred under the three-tier test in Patel v. Mirza

Ratio Decidendi

The fraudulent knowledge and conduct of Mr Al Sanea should not be attributed to Singularis for the purposes of the illegality defence, as there were innocent directors and the company was not a 'one-man company'. The Quincecare duty was owed to Singularis and was breached by Daiwa, whose employees failed to act on obvious signs of fraud. The claim was not barred by illegality, causation, or an equal and opposite deceit claim. The judge's assessment of contributory negligence was within the reasonable range. The appeal was dismissed.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Daiwa Capital Markets Europe Limited is dismissed.
  • The judgment in favour of Singularis Holdings Limited stands, with damages as reduced for contributory negligence.