Bank of Ireland v Pexxnet Ltd. Maxximmo AG & Ors

Bank of Ireland v Pexxnet Ltd. Maxximmo AG & Ors

All Defendants knowingly participated in a dishonest conspiracy to defraud the Bank by presenting forged instruments and are jointly and severally liable for the Bank’s losses. The funds transferred were held on constructive trust for the Bank under English law, and Montres Lunesa must return the remaining funds. Even if Swiss law applied, Montres Lunesa would be liable to return the funds as unjust enrichment.

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
Civil (commercial Fraud/banking) / Judgment After Trial; Defendants Debarred From Defending Due to Non Compliance
Outcome
Judgment for the Claimant; Defendants jointly and severally liable for damages and constructive trust declared over funds in Montres Lunesa’s UBS account.
Legal Topics
Constructive Trust, Conspiracy to Defraud, Tracing of Funds, Unjust Enrichment, Dishonest Assistance
Banking Law Commercial Law Conflict of Laws Equity and Trusts Fraud Constructive Trust Conspiracy to Defraud Tracing of Funds +2 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

Civil (commercial Fraud/banking) / Judgment After Trial; Defendants Debarred From Defending Due to Non Compliance

Legal Issues

  1. 1 Whether Defendants conspired to defraud the Bank by presenting forged instruments
  2. 2 Whether Defendants are liable as constructive trustees for the misappropriated funds
  3. 3 Whether English or Swiss law applies to the proprietary claim over the funds

Ratio Decidendi

All Defendants knowingly participated in a dishonest conspiracy to defraud the Bank by presenting forged instruments and are jointly and severally liable for the Bank’s losses. The funds transferred were held on constructive trust for the Bank under English law, and Montres Lunesa must return the remaining funds. Even if Swiss law applied, Montres Lunesa would be liable to return the funds as unjust enrichment.

Court Disposition

Judgment for the Claimant; Defendants jointly and severally liable for damages and constructive trust declared over funds in Montres Lunesa’s UBS account.

Orders

  • Defendants to pay damages of €2,400,000 plus interest at 2% above Euribor Euro rate from 21 September 2006 until judgment.
  • Declaration that Montres Lunesa holds €2,138,550.96 plus accrued interest on constructive trust for the Bank.