Bank of Ireland v Pexxnet Ltd. Maxximmo AG & Ors [2010] EWHC 1872 (Comm) (22 July 2010)

Bank of Ireland v Pexxnet Ltd. Maxximmo AG & Ors [2010] EWHC 1872 (Comm) (22 July 2010)

All defendants knowingly participated in a dishonest conspiracy to defraud the Bank by presenting forged instruments and laundering the proceeds. The explanations offered by the defendants were found to be false and incredible. The funds transferred to Pexxnet and then to Montres Lunesa were held on constructive trust for the Bank under English law, and Montres Lunesa is liable to repay the funds. Even if Swiss law applied, Montres Lunesa would be liable in unjust enrichment. The defendants are jointly and severally liable for the Bank's losses.

Citation
[2010] EWHC 1872 (Comm)
Parties
Claimant: The Governor and Company of the Bank of Ireland; First Defendant: Pexxnet Limited; Second Defendant: Maxximmo AG; Third Defendant: M5 Capital AG (formerly Maxximmo Treuhand AG); Fourth Defendant: Montres Lunesa AG
Jurisdiction
England and Wales
Judgment Date
22 July 2010
Procedural Posture
Commercial Court Claim for Recovery of Funds Obtained by Fraud / Final Judgment After Trial in Absence of Defendants
Outcome
Judgment for the claimant. Defendants jointly and severally liable for €2,400,000 plus interest. Declaration that Montres Lunesa holds the frozen funds on constructive trust for the Bank.
Legal Topics
Constructive Trust, Conspiracy to Defraud, Tracing Remedies, Unjust Enrichment, Dishonest Assistance
Banking Law Fraud Trusts and Equity Conflict of Laws Constructive Trust Conspiracy to Defraud Tracing Remedies Unjust Enrichment +1 more

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Parties

The Governor and Company of the Bank of Ireland

Claimant

Pexxnet Limited

First Defendant

Maxximmo AG

Second Defendant

M5 Capital AG (formerly Maxximmo Treuhand AG)

Third Defendant

Montres Lunesa AG

Fourth Defendant

Procedural Posture

Commercial Court Claim for Recovery of Funds Obtained by Fraud / Final Judgment After Trial in Absence of Defendants

Legal Issues

  1. 1 Whether the defendants conspired to defraud the claimant bank by presenting forged instruments
  2. 2 Whether the defendants are liable as constructive trustees for the misappropriated funds
  3. 3 Whether English or Swiss law applies to the proprietary claim against Montres Lunesa

Ratio Decidendi

All defendants knowingly participated in a dishonest conspiracy to defraud the Bank by presenting forged instruments and laundering the proceeds. The explanations offered by the defendants were found to be false and incredible. The funds transferred to Pexxnet and then to Montres Lunesa were held on constructive trust for the Bank under English law, and Montres Lunesa is liable to repay the funds. Even if Swiss law applied, Montres Lunesa would be liable in unjust enrichment. The defendants are jointly and severally liable for the Bank's losses.

Court Disposition

Judgment for the claimant. Defendants jointly and severally liable for €2,400,000 plus interest. Declaration that Montres Lunesa holds the frozen funds on constructive trust for the Bank.

Orders

  • Defendants to pay €2,400,000 in damages to the Bank of Ireland.
  • Interest awarded at 2% above Euribor Euro rate from 21 September 2006 until judgment.