ZI WANG v GRAHAM DARBY

ZI WANG v GRAHAM DARBY

The contracts between Mr Wang and Mr Darby were reciprocal exchanges (sale and buy-back) of cryptocurrencies, not trusts. The essential economic reciprocity and the parties’ own language and pleaded case preclude the existence of any trust (express, resulting, or constructive) over the 400,000 Tezos. Only personal claims for breach of contract and breach of fiduciary duty (non-capital, non-proprietary) survive. The proprietary claims are struck out. The worldwide freezing order is continued on the basis of personal claims; the proprietary injunction is set aside.

Parties
Claimant: ZI WANG; Defendant: GRAHAM DARBY
Jurisdiction
England and Wales
Judgment Date
17 November 2021
Procedural Posture
Commercial / Judgment on Summary Judgment Application and Continuation of Worldwide Freezing Order
Outcome
Proprietary claims struck out; summary judgment granted in part; worldwide freezing order continued; proprietary injunction set aside; personal claims for breach of contract and fiduciary duty to proceed to trial; directions for amended pleadings and further hearing.
Legal Topics
Express Trusts, Resulting Trusts, Constructive Trusts, Fiduciary Duties, Cryptocurrency as Property, Summary Judgment, Worldwide Freezing Orders
Commercial Law Trusts Law Cryptocurrency Law Express Trusts Resulting Trusts Constructive Trusts Fiduciary Duties Cryptocurrency as Property +2 more

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Parties

ZI WANG

Claimant

GRAHAM DARBY

Defendant

Procedural Posture

Commercial / Judgment on Summary Judgment Application and Continuation of Worldwide Freezing Order

Legal Issues

  1. 1 Whether the contracts between the parties gave rise to a trust over 400,000 Tezos cryptocurrency transferred by the claimant to the defendant
  2. 2 Whether the claimant has a proprietary claim to the Tezos or only personal claims
  3. 3 Whether the defendant owed fiduciary duties independent of trust

Ratio Decidendi

The contracts between Mr Wang and Mr Darby were reciprocal exchanges (sale and buy-back) of cryptocurrencies, not trusts. The essential economic reciprocity and the parties’ own language and pleaded case preclude the existence of any trust (express, resulting, or constructive) over the 400,000 Tezos. Only personal claims for breach of contract and breach of fiduciary duty (non-capital, non-proprietary) survive. The proprietary claims are struck out. The worldwide freezing order is continued on the basis of personal claims; the proprietary injunction is set aside.

Court Disposition

Proprietary claims struck out; summary judgment granted in part; worldwide freezing order continued; proprietary injunction set aside; personal claims for breach of contract and fiduciary duty to proceed to trial; directions for amended pleadings and further hearing.

Orders

  • Proprietary claims (trust-based) struck out except for any viable claim for constructive trust over direct or indirect gains from breach of fiduciary duty.
  • Proprietary injunction set aside, subject to further application based on any viable residual claim.