Papamichael v National Westminster Bank Plc

Papamichael v National Westminster Bank Plc

Mrs Papamichael is entitled to recover the funds as money paid under a mistake of fact because NatWest, through its employee, had actual knowledge of her interest and dishonestly failed to investigate or protect it. The bank's change of position defence fails due to lack of good faith. Alternatively, NatWest is liable for knowing receipt and dishonest assistance in breach of trust, as the funds were traceable to a breach of fiduciary duty by Mr Paparounis, and NatWest had actual knowledge of the circumstances making retention unconscionable.

Parties
Claimant: Despina Papamichael; Defendant/part 20 Claimant: National Westminster Bank plc (NatWest); Part 20 Defendant: Dimitrios Paparounis
Jurisdiction
England and Wales
Judgment Date
14 February 2003
Procedural Posture
Commercial Court Claim (restitution, Breach of Trust, Knowing Receipt/assistance) / Judgment After Trial
Outcome
Judgment for the claimant (Mrs Papamichael)
Legal Topics
Mistaken Payment, Constructive Trust, Knowing Receipt, Knowing Assistance, Breach of Fiduciary Duty, Change of Position Defence
Banking Law Trusts Law Restitution Equity Mistaken Payment Constructive Trust Knowing Receipt Knowing Assistance +2 more

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Parties

Despina Papamichael

Claimant

National Westminster Bank plc (NatWest)

Defendant/part 20 Claimant

Dimitrios Paparounis

Part 20 Defendant

Procedural Posture

Commercial Court Claim (restitution, Breach of Trust, Knowing Receipt/assistance) / Judgment After Trial

Legal Issues

  1. 1 Whether Mrs Papamichael is entitled to recover funds transferred to NatWest under a mistake of fact
  2. 2 Whether NatWest is liable for knowing receipt or dishonest assistance in breach of trust
  3. 3 Whether Mr Paparounis held funds on constructive trust for Mrs Papamichael

Ratio Decidendi

Mrs Papamichael is entitled to recover the funds as money paid under a mistake of fact because NatWest, through its employee, had actual knowledge of her interest and dishonestly failed to investigate or protect it. The bank's change of position defence fails due to lack of good faith. Alternatively, NatWest is liable for knowing receipt and dishonest assistance in breach of trust, as the funds were traceable to a breach of fiduciary duty by Mr Paparounis, and NatWest had actual knowledge of the circumstances making retention unconscionable.

Court Disposition

Judgment for the claimant (Mrs Papamichael)

Orders

  • NatWest to pay Mrs Papamichael US$ 6,506,604.20 as primary relief for dishonest assistance/knowing receipt, or alternatively GRD 2 billion as money paid under a mistake of fact.