Moorwand Ltd v Gareth Anthony Hamblin & Ors [2026] EWCA Civ 942

[2026] EWCA Civ 942Case No CA-2025-000991
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2025] EWHC 817 (Ch)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
APPEALS (ChD)
Mr Justice Marcus Smith
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 21/07/2026
Before
LORD JUSTICE PETER JACKSONLORD JUSTICE NUGEELORD JUSTICE FOXTON
Between
MOORWAND LTDAppellant / Defendant
Richard Salter KC and Alexia Knight (instructed by Keystone Law) for AppellantAlexander Hill-Smith (instructed by Knights Professional Services Ltd) for First and Second RespondentsHearing Hearing dates : 25 and 26 June 2026
Approved JudgmentThis judgment was handed down remotely at 10.00am on 21 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................
[1]There are cases which appear to present an apparently simple point for decision, only to unfold into increasing complexity as the argument develops. This appeal followed the opposite trajectory, and by the time the oral argument had concluded, turned on the familiar issue of whether the high threshold for interfering with the evaluative conclusions of a trial judge was met.[2]The case comes before the court as a second appeal, brought with the permission of Lewison LJ, against the decision of Mr Justice Marcus Smith (“the Judge”) reported at [2025] EWHC 817 (Ch) (“the Judgment”). The Judge allowed an appeal against the decision of His Honour Judge Raeside KC (“the trial judge”) dismissing claims brought by the First and Second Respondents (“the Hamblins”) by way of a derivative assertion of claims which the Third Respondent (“RND”) was said to have against the Appellant (“Moorwand”). The trial judge dismissed the Hamblins’ claims in a judgment given at the end of a two day trial (“the FI Judgment”).

The facts

[3]This claim arises from the dishonest activities of a fraudster or group of fraudsters acting together who I shall refer to as “X”. On 22 February 2017, X caused a company called RND to be incorporated at Companies House. The name of a real person – a Mr John Stanfield – was used in the incorporation documents. The date of birth given for “Mr John Stanfield” in the registration documents was November 1961, which was the right year, but the wrong month. The address given on the form for Mr Stanfield – Apartment 99 3 Riverlight Quay, London – does not appear to have any connection with him. The real Mr Stanfield had no knowledge of RND.[4]On 21 March 2017, RND applied to open accounts with Moorwand, an Electronic Money Institution (“EMI”) regulated by the Financial Conduct Authority. Moorwand, which was originally called UPayCard Limited and, offered “electronic wallets” enabling customers to make and receive payments in various currencies and in Bitcoin. In the application form, RND gave the Riverside Quay address as its address, and identified Mr John Stanfield as “director/owner”. The last page of the application form, the signature page, is missing. In the application, the real Mr Stanfield’s address was given as the home address of “Mr John Stanfield”. The application was accompanied by(i) a copy of a page from the real Mr Stanfield’s passport and a bank account statement from his bank account (the real Mr Stanfield having been the victim of “identity theft”) and(ii) RND’s incorporation documents. There was a discrepancy between the date of birth for John Stanfield on the application form and that on the page of the accompanying passport. The email address given on the form had no connection with the real Mr Stanfield. RND also submitted a signed copy of Moorwand’s Business Account Agreement (“the Agreement”), the signature on behalf of RND being that of “Mr Stanfield”. All of this was done without the knowledge or involvement of the real Mr Stanfield.[5]The Agreement referred to, and the trial was conducted on the basis that it incorporated, Moorwand’s standard terms and conditions (“the STCs”). These included the following: i) Clause 2:
“Client hereby represents and warrants to Company that all information provided by Client and set forth in Client Information Attachment is true, complete and correct in all respects, and fully understands, agrees, and acknowledges that Company is expressly and directly relying on this representation and warranty in agreeing to enter into this Agreement and to provide services hereunder.” ii) Clause 11: “With Client’s full understanding that Company is expressly and directly relying on the following representations and warranties in agreeing to enter into this Agreement and to provide services hereunder, Client hereby makes the following representations and warranties to Company: (a) Strict Compliance with Laws, Rules and Regulations. Client Does [sic], and at all times during the term of this Agreement will, operate its business in strict compliance with all laws and regulations applicable to its business to the highest level and ethical standards…” iii) Clause 16 contained a broadly phrased exclusion of liability for damages. iv) Clause 21(k) provided: “Authority. By executing this Agreement in the space provided below, the person signing this Agreement on behalf of Client represents to Company that Client’s governing body or person(s) has: (i) authorized Client to enter into this Agreement and to assume the duties and obligations set forth herein; (ii) has authorized the signatory hereof to execute and deliver this Agreement on behalf of Client and to thereby bind Client to the terms and conditions hereof; and (iii) Client has obtained all necessary, regulatory approvals and certificates to provide any services it intends to offer customers.”
[6]On 2 March 2017, Ms Tatiana Miller, a business account manager at Moorwand, asked X to explain “what exactly do you intend to use your Business Account for”, which industry and countries RND’s business activities concerned and what the turnover predictions were. X replied that the business was a marketing consultancy which would receive funds from clients and pay suppliers, with monthly turnover of the order of £100,000.[7]The documents provided by RND for the purpose of opening the accounts included an invoice purportedly addressed to Mr Stanfield at the Riverlight Quay address used in the registration application. However, a shaded box on the invoice identified the customer to whom the invoice was issued as a Ms Mehegan. The invoice bore a date prior to the incorporation of RND. An internal Moorwand email sent by Ms Liliana Balan to Ms Miller on 22 March 2017 stated:
“I’m not sure about the Company UB [utility bill]. It looks fake. Can they provide another proof of company address?”
There is no evidence that a request of that nature was made to RND.[8]An annual mortgage statement was supplied at some point and an SSE utility bill in the name of “Mr Stanfield” dated 21 March 2017.[9]On 22 March 2017, pursuant to the Agreement, Moorwand opened three accounts in RND’s name: a Bitcoin account; a GBP account and a Euro account.[10]In April 2017, X began his interactions with the Hamblins, using the name “Paul Kingsley”, and purporting to work for a company called Central Exchange Market or “CEX”. X offered the Hamblins access to an automated high speed foreign exchange trading system which it was claimed would offer very significant monthly returns on sums invested. A website operated by CEX to which the Hamblins were given access purported to show any investments received, and the profits made through high frequency trading. The Hamblins completed an online application, which is no longer available.[11]On 7 April 2017, the Hamblins made a “test” payment of £5,000 to an account in CEX’s name. On 2 May 2017, CEX issued invoice No 3411 to Mr Hamblin, providing for payment of £140,000 into a Moorwand account with a Danish bank. Mrs Hamblin looked up Moorwand, which seemed to her to be “a UK company with a high-risk rating with very limited resources” which had had a rapid succession of directors. The payment of £140,000 was not made. However, following an exchange of emails with X, on 10 July 2017, Mr Hamblin was sent an invoice for £160,000, providing for payment to a Moorwand account, again with a Danish bank. That amount was credited to RND’s GBP account with Moorwand. On 24 August 2017, a document entitled “CEX Transfer Form” was produced by X and sent to the Hamblins which referred to establishing a trust over the £160,000.[12]Within 10 days of the payment being made, the greater part of the £160,000 had been paid out of the Moorwand account, both through the Bitcoin account and the GBP account. On the trial judge’s findings, the money was applied as follows: i) On 18 July 2018, 5.4 Bitcoin were purchased for £9,708 ([102]). ii) On 18 July 2017, £34,500 was paid to Authentic Luxury Watches Trading ([111]). iii) On the same date, £40,000 was paid to “Global Self Drive Limited” ([111]). iv) On 19 July 2017, 5.29 Bitcoin were purchased for £9,222.93 ([103]). v) On 25 July 2017, 28 Bitcoin were purchased for £55,285.17 ([104]). vi) On 27 July 2017, 10 Bitcoin were purchased for £20,269.18 ([105]). The trial judge found that by this point, £160,000 had already been expended. vii) On 4 August 2017, three separate purchases of Bitcoin were made for £14,480.73, £13,183.95 and £14,804.92 ([107] where the trial judge noted that these were made “almost certainly... after the total sum of £160,000 had been expended”). viii) On 7 August 2017, 3.67 Bitcoin were purchased for £9,476.30 ([108]).[13]The fraud practised on the Hamblins was an “authorised push payment” or APP fraud. The essential mechanics of an APP fraud are that the fraudster persuades the victim to authorise payments from their own bank account, as opposed to a “pull” fraud where the fraudster induces the bank into transferring payments from an account when these have not been authorised by the account-holder. At X’s instigation, the Hamblins subsequently made further payments totalling £140,000 to other entities (the last such payment being on 11 January 2018), but these are not the subject of this claim.[14]RND was dissolved and struck off the register on 31 July 2018, having never filed any accounts.[15]On 3 September 2018, the Hamblins found that they were no longer able to access the CEX website.[16]On 13 December 2018, the Hamblins brought Part 8 proceedings against Moorwand and others for the purpose of obtaining Norwich Pharmacal relief relating to the accounts into which their funds had been paid. These were granted by consent on 18 January 2019. With the benefit of that information, the Hamblins commenced proceedings against the real Mr Stanfield in the London Circuit Commercial Court on 4 April 2019, obtaining a without notice freezing order against him. When Mr Stanfield was served with that order, the identity theft became apparent to both the Hamblins and Mr Stanfield.[17]On 2 August 2019, the Hamblins applied to restore RND to the register. On 21 November 2019, DJ Hart made an order restoring RND to the register for the purposes of the Hamblins bringing a derivative claim on RND’s behalf against Moorwand.[18]The present proceedings were commenced by the Hamblins against Moorwand on 15 February 2022.[19]In view of the disputes which have arisen as to the scope of the trial and the appeal, it is important to set out the issues raised in the proceedings. Taking the Particulars of Claim first: i) There was no dispute that the Agreement was a binding contract between RND and Moorwand. That common ground had potentially significant implications for the issues which might then arise, not least because the contract was signed on RND’s behalf by X in the name of John Stanfield, and because the Agreement contained various clauses of potential application to the claims brought. ii) The Hamblins asserted that RND received the investment amounts on trust for them, either express or constructive. iii) It was alleged that it was an implied term of the Agreement that only the real Mr Stanfield could give instructions on RND’s behalf and/or operate the accounts ([18]), and also that Moorwand owed RND a duty of reasonable skill and care, in contract and tort, in executing payment instructions. iv) It was alleged that the payments made out of the accounts should not have been made because it was apparent that the account “was not being used for the purpose of any legitimate business activity of [RND] but rather was being used in a matter [sc. manner] not properly authorized by [RND]” ([34]). v) It was alleged that Moorwand acted in breach of duty in making the payments, and that “these sums are repayable … as damages and/or equitable compensation” ([35]). vi) A claim was also brought under Regulation 61 of the Payment Services Regulations 2009 (“the 2009 Regulations”) on the basis that Moorwand was obliged to return any payment not authorised by the payment procedures agreed in accordance with Regulation 55 ([45]). vii) The Hamblins sought to claim their own costs in bringing the Norwich Pharmacal application, the £160,000 “and/or damages”, together with statutory interest.[20]Turning to the Defence: i) The Hamblins’ entitlement to bring a derivative claim was challenged ([8-9]). ii) It denied that RND held the amounts received on trust for the Hamblins ([8]). iii) It admitted the Agreement was concluded, and averred that there was no reasonable basis for supposing that the Agreement was not authorised by RND ([20]). iv) Clauses 2, 11, 16 and 21(k) of the STCs were pleaded ([21]). v) It was denied that “the real Mr Stanfield” was the only person authorised to give instructions in relation to RND’s accounts with Moorwand ([22]) but it was accepted that Moorwand owed RND a contractual duty to exercise “reasonable care and skill when interpreting and acting in accordance with RND’s instructions” and in “ensuring instructions were those of its customer” – i.e. it was accepted a Quincecare duty was owed to RND ([23]). The nature and content of the Quincecare duty is discussed at [43-54] below. vi) It was “not admitted” that the payments out of the account were not authorised by RND but denied that Moorwand was put on enquiry that any payments were not so authorised ([32]). Reference was also made to Moorwand’s obligation to comply with the 2009 Regulations, although it was not suggested that this displaced the Quincecare duty. vii) There was a single sentence plea that “any losses suffered by RND were caused or contributed to by its breach of clauses 2, 11(a) and 21(k)” of the STCs but no argument was advanced that Moorwand would be entitled to recover any amounts it was ordered to pay as damages for breach of those clauses ([39]). viii) It was alleged that the claim was excluded by clause 16 ([40]). ix) The breach of the 2009 Regulations was denied ([44]).[21]The Reply admitted that the Agreement incorporated clauses 2, 11, 16 and 21 of the STCs ([21]). It was pleaded that clause 16 was unenforceable by reason of the Unfair Contract Terms Act (“UCTA”) 1977 ([15]). The plea by reference to clauses 2, 11 and 21(k) of the STCs advanced at paragraph 39 of the Defence was described as “embarrassing” for want of particularity ([25]).[22]The parties obtained the report of a single joint expert, Mr John Burns, who was asked to assume certain facts for the purpose of his opinion. He was asked to address the following question:
“Whether Moorwand’s processing of the Transfers was in all the circumstances in accordance with the practice of a reasonable payment services provider, having particular regard to: - its determination of whether the Transfers were authorised; and - whether a reasonable payment services provider would have had grounds for believing the Transfers were an attempt to misappropriate RND’s funds.”
[23]He expressed the following views: i) Having regard to the guidance from the Financial Conduct Authority and the Joint Money Laundering Steering Committee, Moorwand had been put on enquiry when accepting RND as a client as to lack of honesty by RND and should have enquired further (section 5, second paragraph). ii) Moorwand came under an enhanced due diligence obligation under regulation 33 of the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (section 5, fourth paragraph). iii) Having been put on enquiry through the onboarding process as to the “doubtful honesty of the people behind RND”, it “would have been legitimate for, and indeed incumbent upon” Moorwand to query the reason behind the transfers from the accounts, even though they appeared to have been properly authorised, and the need to comply with anti-money laundering requirements would have justified delay or refusal in effecting the payment (section 5, seventh paragraph), iv) Certain transactions including cryptocurrency and luxury watches are understood “to involve greater risk of money laundering”, and these transactions “should have been considered for submission of a Suspicious Activity Report” (section 5, eighth paragraph). v) In his conclusion, he stated that Moorwand’s processing of the Transfers was “not in all the circumstances fully in accord with the practice of a reasonable payment services provider” as Moorwand was put on enquiry of the honesty of those behind RND which required greater scrutiny (section 6, second paragraph). vi) However, “the transactions themselves were not indicative of an attempt to misappropriate RND’s funds” albeit “their nature and size were out of the expected character of transaction that RND had previously advised” (Section 6, third paragraph, first sentence). vii) “[I]t was legitimate for Moorwand to accept that the instructions were properly given under their terms and conditions, notwithstanding the shortcomings in initial due diligence and there was no reason for them to suspect an attempt at misappropriation of the funds”. However, “the nature of the transactions should have triggered suspicions of money laundering and been subject to a Suspicious Activity Report, which may have prevented their completion” (Section 6, third paragraph, final sentence).[24]Mr Burns’ report can be said to offer something for both parties, and be susceptible to two interpretations. That may explain why the report was adduced at the trial without either party requiring Mr Burns’ attendance, lest the process of cross-examination led to a hardening of his position in one or other direction. While the Hamblins raised certain limited written questions on the report, these concerned only the facts which Mr Burns had assumed. However, a possible interpretation of the report (and the interpretation the trial judge adopted) was that Moorwand had breached its regulatory obligations in relation to AML when onboarding RND, and possibly its regulatory obligation to make a suspicious activity report, but not its Quincecare duty to RND.[25]The case came on for trial before the trial judge in April 2024. The parties’ opening and closing submissions clarified and/or supplemented the statements of case as follows: i) It was clear from Mr Alexander Hill-Smith’s skeleton, even if it had not been clear before, that the remedies sought included restoration to the account balance of the £160,000 ([2], [66] and [72]). ii) He asserted that the existence of a Quincecare duty was not in dispute ([69]), and relied on the decision in Barclays Bank v Philipp [2023] UKSC 25, [2024] AC 346 as to its scope ([71]). It was clear that one basis on which it was said that the instructions to effect transfers from the account were made without authority was that they were not given for RND’s purposes ([72-75]). iii) Ms Knight’s skeleton treated the case as involving a conventional application of Philipp ([35-36]), and argued that Moorwand had not been put on enquiry, with the result that its strict liability to follow the customer’s instructions continued to apply. iv) She invited the trial judge to interpret Mr Burns’ report as expressing the opinion that there had been no breach of the Quincecare duty, but only of regulatory duties not owed to RND nor actionable in private law ([45-46]). v) No reference was made to clauses 2, 11 and 21(k) of the STCs. vi) An unpleaded illegality argument was raised for the first time ([50]). vii) In his written closing, Mr Hill-Smith objected to the illegality plea ([73]) but in any event argued that the conduct was not attributable to RND, referring to Singularis v Daiwa [2019] UKSC 50, [2020] AC 1190 (“Singularis”) ([74]). Ms Knight responded in her closing note by asserting that the court was obliged to take the illegality point of its own motion ([12]).[26]At the trial, the Hamblins gave oral evidence (largely on the trust issue) and Mr Burns’ report was read. Moorwand did not call oral evidence, it being said that the relevant individuals were no longer in its employ.

The FI Judgment

[27]The trial judge delivered judgment on 23 April 2024. He made the following factual findings (references are to paragraphs in the FI Judgment): i) At [57], he found that:
“the relationship between RND and John Stanfield, whose name was borrowed as part of the fraud, is perfectly straightforward. He is the only director of the company and the only shareholder. There is no company secretary. His share is worth only £1 and it is difficult to see, in terms of his relationship with this organisation, that it is anything other than a front. They are effectively one and the same fraudulent sham.” ii) Viewed in isolation, parts of that paragraph might suggest that the trial judge regarded the real Mr Stanfield as the sole director and shareholder of RND. However, on reading the judgment as a whole, it is clear that the trial judge was here describing matters as they appeared to be. For example at [58] he suggested there were “no shareholders”, and at [62] he referred to “the person purporting to be John Stanfield”
. At [67] he referred to Moorwand effecting the relevant transactions with “John” (i.e. [X]) and at [109] he found that “all these Bitcoin transactions were with “John” and as I read them that is a reference to John Stanfield who effectively was RND, and it is clear on their face that these were all authorised”. This was clearly a reference to X. [187] is to the same effect. iii) At [58] he found that RND was “nothing more than a special purpose vehicle set up by the fraudsters with no shareholders, no assets, no website, no trading history, no accounts, indeed absolutely nothing that a normal company would have”. iv) At [66], the trial judge held that the case was not concerned with Moorwand’s regulatory failings in opening the accounts but only the contractual and tortious duties relied on. v) At [69-72], he held that clause 16 of the STCs excluded liability in this case and that the clause satisfied the requirements of UCTA 1977. vi) He accepted the Hamblins’ argument that RND held the amounts received on constructive trust for them ([96]), relying on Halley v Law Society [2003] EWCA Civ 97, [2003] WTLR 845 (“Halley”), but he rejected the argument that there was an express trust, in part because the documents said to amount to the declaration of trust came into existence after the amounts received had been dissipated ([106]). vii) At [101], he made the significant factual finding that there was no reason why Moorwand would be concerned about the payment instructions given on behalf of RND or be put on enquiry. So far as the Bitcoin purchases were concerned, there had been a specific Bitcoin trading account from the outset ([107] and [109]) and “it is clear on their face that these were all authorised”, both for the purposes of agency law and Regulation 61 ([109]). viii) The payments used the approved line of communication and “there was no reason for [Moorwand] to doubt who they were dealing with or that these transactions were not authorised by RND”. As a result Moorwand was obliged to carry out the payments, and they were authorised under Regulation 61 ([111]). ix) The payment for the watch was “relatively small” and did not stand out ([111], [113]). x) Similar findings were made in relation to the other payments made from the £160,000 ([112]). xi) Having set out the terms of Mr Burns’ report, at [129]), the trial judge noted that “the conclusion in the report maybe leaves something to be desired in terms of understanding” but that his interpretation of it was as follows: “(1) The opening of the account by RND was suspicious and therefore greater scrutiny was required with the transactions; however, he could be wrong as a matter of law in accordance with Philipp ... (2) Despite these initial shortcomings, there was no reason to suspect any attempt of misappropriation of funds, but (3) the transfers ‘may’ have given rise to a Suspicious Activity Report due to the suspicion of money laundering, which ‘could’ have prevented the transactions from being completed, but that takes this civil case no further as concluding that there had been regulatory failings by Moorwand in the onboarding process, but as expressing the view that a reasonable payment services provider would not conclude that the payments were an attempt to misappropriate RND’s funds.” xii) On that basis, he concluded that Mr Burns’ report did not support the Hamblins’ case on the Quincecare duty, whatever assistance it provided on regulatory failings ([130]).[28]On the basis of his factual findings, the trial judge reached the following conclusions: i) He doubted that the unpleaded issue of illegality was relevant and concluded that the answer in the case lay elsewhere ([149]). No finding of illegality was made. ii) There was no evidence that an express trust was created, and the claim based on an express trust failed ([175-176]). However, RND held the amounts received on constructive trust for the Hamblins ([141-142] and [178]). iii) The Hamblins were entitled to bring a derivative action in RND’s name by reason of the constructive trust which arose on the making of the payments, under the principle in Halley ([156] and [178]). iv) So far as the claim for damages was concerned, RND was bound by clause 16 of the STCs ([185]). v) The evidence, including in particular Mr Burns’ report, did not establish a breach of Moorwand’s Quincecare duty to RND ([186-188]). vi) The breaches of regulatory duty at the time of setting up the accounts did not assist in determining whether the payments from the accounts were made in breach of duty ([191]). vii) Regulation 61 of the 2009 Regulations was not engaged because the transactions were authorised by RND ([194]).[29]It is important to note that it formed no part of the trial judge’s decision that X had actual authority to give the transfer instructions on RND’s behalf (unsurprisingly because Moorwand did not advance a positive case on actual authority). In essence, the key question which the trial judge had to, and did, answer was whether Moorwand was put on enquiry that the person giving the transfer instructions was acting without RND’s authority. The trial judge answered that question in the negative, on which basis Moorwand was entitled to rely on the ostensible authority of the individual giving the instructions in accordance with the agreed contractual processes. Notwithstanding the points understandably made by the trial judge as to the novelty of the derivative action in the present context, the case was ultimately decided on a conventional basis, by reference to the trial judge’s evaluation of the evidence before him.

The appeal to the Judge

[30]The Hamblins sought permission to appeal and on 17 December 2024, Edwin Johnson J ordered a “rolled up” hearing of the application for permission to appeal and any appeal, and suggested that further clarification of the grounds of appeal was required. The grounds of appeal are not before the court. No Respondent’s Notice appears to have been served with the result that the trial judge’s finding that a derivative action could be brought and the illegality argument did not arise on the appeal.[31]The Hamblins’ skeleton argument for the appeal took aim at the trial judge’s failure adequately to address the defects in Moorwand’s onboarding process when assessing whether or not it was put on enquiry that the transfer instructions may have been given without RND’s authority, and also at the trial judge’s assessment of the evidence on that issue generally including his interpretation of Mr Burns’ report. In response to the reliance on clause 16 of the STCs, the point was taken that the claim was for reinstatement of the account and not for damages, such that clause 16 was not engaged. It is fair to say that this was the clearest statement by the Hamblins to date that its claim was not (just) a claim in damages, and it led to an objection before the Judge as to whether that point was open.[32]Ms Knight for Moorwand challenged the Hamblins’ right to advance a claim in any form other than a claim for damages. There was no attempt to revive the challenge to the derivative action, no reliance on clauses 2, 11 and 21 and no attempt to revive the illegality defence. Ms Knight’s short point was that the trial judge was entitled to find that Moorwand was not put on enquiry, and that that finding should not be disturbed on appeal.

The Judgment

[33]Granting permission to appeal and allowing the appeal, the Judge held that the debt claim for reconstitution of the account was open to the Hamblins ([9-11]). Having directed himself as to the limited circumstances in which a factual and evaluative finding by the trial judge could be re-opened on appeal, the Judge held that the trial judge’s decision was vitiated by errors which had the result that “permission to appeal must be given … and the appeal allowed” ([19]). The errors identified by the Judge were: i) That the trial judge incorrectly equated RND's agent with RND itself, instead of seeing the issues from the perspective of an innocent principal (RND) that was the victim of a fraud of its agent (X) which it was said conflicted with the principle recognised in Bilta (UK) Ltd v. Nazir [2015] UKSC 23, [2016] AC 1 (“Bilta”) and Singularis ([20(i)-(iii)]). It was said that as a consequence of that error, the trial judge had failed to appreciate the significance of various issues ([20(iv)]) and had wrongly discounted other factors ([20(v)]). ii) The trial judge had failed to take account of the fact that X was not an agent of RND, and that the “person authorised to act for RND was a Mr Stanfield, a real person” ([20(iv)(b)]). iii) The trial judge had erred in drawing a line between matters which went to regulatory failures and those relevant to the duty of enquiry, in circumstances in which the facts which underpinned the former were relevant to the latter ([20(vi)-(vii)]).[34]The Judge reached his own evaluative assessment, and concluded that Moorwand was put on enquiry, an issue which he dealt with very briefly on the basis that it essentially followed from his reasons for concluding that the trial judge had erred in his approach ([21-22]). The Judge held that clause 16 was not engaged in response to the claim for restoration of the account balance (a conclusion not challenged on this appeal), but he rejected the other challenges to Moorwand’s reliance on that clause.[35]So far as the claim under the 2009 Regulations was concerned, the Judge held that the critical issue was whether RND had consented to the payments made from its accounts within Regulation 55(1)(b) ([29]). The Judge held that Regulation 55(2)(b) – the form of consent relied upon in this case – “imposes a purely mechanical requirement on the payment service provider to observe the procedures agreed between it and the customer” ([30-31]), and that:
“It cannot be said that the mechanical provisions regarding payment instructions were disregarded by Moorwand. To the contrary, they were (as the Judgment records) punctiliously observed. The claim under the Payment Services Regulations fails for this reason. The point is that a punctilious observance of the mechanics of a mandate does not absolve a payment service provider from observing the Quincecare duty where it arises, as it does here.”

The Judge ordered Moorwand to re-credit £160,000 to RND’s account.

[37]At a further hearing, an issue arose as to whether the court should award interest on the £160,000 pursuant to s.35A of the Senior Courts Act 1981 and, if so, from what date. In a judgment reported at [2025] EWHC 2789 (Ch) (“the Interest Judgment”), the Judge held that the Hamblins were entitled to interest on the amounts paid out from the date on which the transfers took place, on the basis that their claim was in debt. That was so even though no interest would have been payable on the balance in the Moorwand accounts: indeed Regulation 45 of the Electronic Money Regulations 2011 provides that an electronic money institution must not pay interest in respect of a holding of electronic money.[38]The Judge held that he should proceed on the basis that RND was a company with legitimate objects and purposes, which should be presumed to operate legitimately. That would have involved it restoring the funds received into its Moorwand accounts to the Hamblins. In those circumstances, he held that it did not matter that RND had never made a demand for payment of its credit balances.

The arguments on appeal

[39]In its skeleton argument for the appeal Moorwand relied on seven grounds: i) Ground 1: the Judge erred in concluding that only the real Mr Stanfield, and not X, was authorised to give instructions on behalf of RND. ii) Ground 2: the Judge should have held that X was the sole member and director of RND and the person authorised to give instructions on its behalf (a ground which embraced the argument that it could not be said that X had no authority to act for RND because he was acting in fraud of it). In the course of Mr Salter KC’s oral submissions, this was also formulated as an argument that the Judge should have dismissed the claim on the basis of illegality. iii) Ground 3: the Judge should have held that the Hamblins were confined to a claim premised on the argument that only the real Mr Stanfield was authorised to give instructions on behalf of RND. iv) Ground 4, which raised similar issues, was not developed as a separate ground in Moorwand’s skeleton. v) Ground 5: the Judge was wrong to find that RND was not bound by clauses 2, 11 and 21(k) of the STCs. vi) Ground 6: the Judge was wrong to overturn the trial judge’s conclusion that Moorwand was not put on enquiry that the transfer instructions were given without authority and, having done so, to conclude that Moorwand was put on enquiry. vii) Grounds 7 and 8: the Judge was wrong to award interest.[40]The Hamblins supported the Judge’s conclusions for the reasons he gave, supplemented on Ground 6 by various matters raised by way of a Respondent’s Notice.[41]Of the seven grounds of appeal advanced: i) Grounds 1, 3 and 6 and, contingent on the resolution of those questions, 7 and 8 were issues which arose from the decisions of the Judge. ii) Ground 2 cannot arise on the appeal because(i) Moorwand had never advanced a case premised on X’s actual authority and(ii) the trial judge had decided the case only on the basis of ostensible authority. The illegality argument was never pleaded, and Moorwand did not seek to raise that argument in the Respondent’s Notice in the appeal to the Judge nor in their Grounds of Appeal to this court. iii) Ground 5 cannot arise, the relevant argument having not been pursued at the trial, nor raised before the Judge. While Mr Salter KC and Ms Knight’s skeleton argument submitted that “the Judge was wrong not to find that RND was bound” by these clauses, the Judge made no such finding because those clauses were never raised before him.[42]Before addressing those Grounds which do arise and are open to Moorwand on its appeal, I will first: i) set out the legal background to the claims brought; and ii) briefly identify issues which might arise in a similar case in the future, when they will require careful attention, but on which it is not necessary to express any views to resolve this appeal. The legal context The Quincecare duty

The legal context

[43]In Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363, Steyn J had to consider the rights and duties as between a bank and its customer in relation to the drawing of cheques on a corporate customer’s account, in circumstances in which those cheques had been drawn by the customer’s chairman for his own dishonest purposes. At p.376, Steyn J noted that while the relationship between the bank and its customer was primarily that of debtor and creditor, when it came to the drawing and payment of cheques, the relationship was that of agent and principal. As a result, like any other agent, a bank would ordinarily owe a duty of care in carrying out its principal’s instructions. At p.377, he continued:
“Given that the bank owes a legal duty to exercise reasonable care in and about executing a customer's order to transfer money, it is nevertheless a duty which must generally speaking be subordinate to the bank’s other conflicting contractual duties. Ex hypothesi one is considering a case where the bank received a valid and proper order which it is prima facie bound to execute promptly on pain of incurring liability for consequential loss to the customer. How are these conflicting duties to be reconciled in a case where the customer suffers loss because it is subsequently established that the order to transfer money was an act of misappropriation of money by the director or officer? If the bank executes the order knowing it to be dishonestly given, shutting its eyes to the obvious fact of the dishonesty, or acting recklessly in failing to make such inquiries as an honest and reasonable man would make, no problem arises: the bank will plainly be liable. But in real life such a stark situation seldom arises. The critical question is: what lesser state of knowledge on the part of the bank will oblige the bank to make inquiries as to the legitimacy of the order? In judging where the line is to be drawn there are countervailing policy considerations. The law should not impose too burdensome an obligation on bankers, which hampers the effective transacting of banking business unnecessarily. On the other hand, the law should guard against the facilitation of fraud, and exact a reasonable standard of care in order to combat fraud and to protect bank customers and innocent third parties. To hold that a bank is only liable when it has displayed a lack of probity would be much too restrictive an approach. On the other hand, to impose liability whenever speculation might suggest dishonesty would impose wholly impractical standards on bankers. In my judgment the sensible compromise, which strikes a fair balance between competing considerations, is simply to say that a banker must refrain from executing an order if and for as long as the banker is ‘put on inquiry’ in the sense that he has reasonable grounds (although not necessarily proof) for believing that the order is an attempt to misappropriate the funds of the company.”
[44]That duty, which unsurprisingly became known as a Quincecare duty, was owed by a bank to its customer as an incident of an agent’s general duty to exercise reasonable skill and care in following its principal’s instructions.[45]Attempts were made to argue that facts which might put a bank “on enquiry” for the purposes of the Quincecare duty might also breach a duty of care owed to a third party who had been a victim of fraud. A claim on this basis was considered by the Privy Council in JP SPC 4 v Royal Bank of Scotland International Ltd [2022] UKPC 18, [2023] AC 461. It was assumed in that case that the claimants had a beneficial interest in the credit represented by the account balance with the bank, that the bank knew this, and that the circumstances were such that a reasonable banker would have had grounds for considering that there was a real possibility that the beneficial owners of the balance were being defrauded. The claimants alleged that the bank owed them a duty of care which required the bank not to honour instructions from the account holders in those circumstances.[46]The Privy Council upheld a decision to strike out the claim, holding that no such duty was owed: i) At [37], the Board referred to the Quincecare duty arising when the bank was “put on inquiry” because there were reasonable grounds for believing that an instruction was “an attempt to defraud the customer”. ii) At [39], the Board noted that the Quincecare duty had to be carefully calibrated to reflect the fact that the duty of care is counteracting the receipt by the bank of what appears to be a valid and proper order which it is prima facie bound to execute. iii) At [40-41], the Board referred to the Supreme Court decision in Singularis (to which I return below), and in particular to passages in Baroness Hale’s judgment at [23] and [35] stressing that the purpose of the Quincecare duty of care was to protect the bank’s customer. iv) At [44], the Board concluded that there was nothing on the present state of the authorities to support the argument that the Quincecare duty of care extends beyond the bank’s customer.[47]The nature and scope of the Quincecare duty as between bank and customer was considered by the Supreme Court in Philipp v Barclays Bank UK Plc [2023] UKSC 25, [2024] AC 346, which was also a case in which the claimant was the victim of an APP fraud. The claim was brought by the claimant against her own bank, in circumstances in which the account was held by a natural person who had herself given the bank the instructions to effect the transfers. The first instance judge dismissed the claim on a summary basis, holding that the fact that the account holder had herself given the instructions precluded a Quincecare duty (there being no agent whose authority to give the instructions might be in doubt). The Court of Appeal held that it was arguable that a duty was owed, but the Supreme Court restored the first instance judge’s decision.[48]It is convenient at the outset to refer to three paragraphs which Lord Leggatt set out at the very start of his judgment: i) At [3]:
“It is a basic duty of a bank under its contract with a customer who has a current account in credit to make payments from the account in compliance with the customer’s instructions. This duty is strict. Where the customer has authorised and instructed the bank to make a payment, the bank must carry out the instruction promptly. It is not for the bank to concern itself with the wisdom or risks of its customer's payment decisions.” ii) At [5], that the reason why a bank owes a Quincecare duty to its customer: “is to ensure that it does not make a payment which the customer has not authorised. This reasoning does not apply to cases of the present kind where the customer has unequivocally authorised and instructed the bank to make a payment.” iii) At [6]: “The type of fraud which occurred here is a growing social problem and can undoubtedly cause great hardship to its victims, as the sad facts of this case make all too clear. Whether victims of such frauds should be left to bear the loss themselves or whether losses should be redistributed by requiring banks which have made or received the payments on behalf of customers to reimburse victims of such crimes is a question of social policy for regulators, Government and ultimately for Parliament to consider. It is in fact, as I will mention in more detail shortly, the subject of new legislation. But it is not a question for the courts. It is not the role of the courts to formulate such policy, still less to impose on the parties to a contract an obligation to which they have not consented and cannot reasonably be presumed to have consented since it is inconsistent with the normal and established allocation of risk and responsibility under contracts of the relevant type.”
[49]There has been regulatory intervention in relation to the consequences of APP fraud, including the FPS Reimbursement Rules which took effect on 7 October 2024. These provide a detailed regime for the reimbursement of qualifying victims of APP fraud, including a 50/50 costs split between the sending and receiving banks.[50]The central issue in Philipp was whether it was arguable that a bank owed a customer a duty to refrain from following her instructions if put on enquiry that the order was an attempt to misappropriate funds from her ([27]). At [35], Lord Leggatt explained the interrelationship of the bank’s duty to follow the customer’s instructions, and the Quincecare duty, as follows:
“The requirement to exercise reasonable care and skill only applies, and is only capable of applying, insofar as the contract gives the supplier any latitude in how the relevant services are carried out. Insofar as the contract prescribes what the supplier must do or achieve in carrying out the services, failure to do or achieve what is required will be a breach of the contract and it is irrelevant whether the supplier has acted with skill or care. The bank’s obligation to carry out payment instructions in accordance with its mandate from the customer leaves the bank with very little latitude in performing the obligation. But where the contract does not completely specify what the bank must do, it must act in the way that a reasonably skilful and careful banker would.”
[51]At [63], Lord Leggatt held that the duty of reasonable care in executing the instruction only arises where the validity or content of the instruction is unclear or incomplete. He explained the Quincecare line of cases on the basis that an order given by the customer’s agent in abuse of its authority will not be a valid order, and the agent will not have actual (although it may have apparent) authority to give an order in those circumstances. At [73], he stated:
“In principle, the scope of an agent’s authority is a matter of agreement between the agent and the principal. Where that agreement is recorded in writing, the question is one of interpretation of the document. No doubt it would be possible in theory for a principal in appointing an agent to agree that the agent may bind the principal even if and when the agent is acting dishonestly with the aim of defrauding the principal. But it seems inconceivable that any sane person would ever agree, or could reasonably be presumed to have agreed, to confer such authority on an agent. As is generally the case in commerce, parties to an agency relationship naturally deal with each other on an unspoken common assumption that each will act honestly in relation to the other. It goes without saying that authority conferred on an agent does not encompass acting dishonestly to further the agent’s own interests in opposition to the interests of the principal.”
[52]It may be relevant to note that this passage in Philipp does not appear to be premised on a legal rule that a principal can never authorise an agent to do a dishonest act to its detriment, but rather reflects what would ordinarily be the compelling presumption that, whatever else the principal is authorising the agent to do, it is not to defraud the principal themselves. To similar effect, at [93]. Lord Leggatt stated:
“I agree with Professor Watts that a mandate giving an agent power to operate a bank account may, depending on its wording, not only represent to the bank that the agent is authorised to sign or give other instructions on the customer’s behalf but also confer authority directly on the bank to follow such instructions. I do not, however, agree that—without express contrary wording—such a mandate should be construed as authorising the bank to follow instructions which the agent has neither actual nor apparent authority to give.”
[53]Finally, at [96- 97], Lord Leggatt made the following significant observations: “A payment made without inquiry when the bank is on notice that the payment is being made for the signatories’ own purposes is not only a breach of the bank’s duty of care but is also outside the scope of its mandate. Hence the bank is not entitled to debit the amount to the customer’s account. This has the practical significance that, unless the customer is claiming damages for consequential losses over and above the amount of the payment, it is unnecessary for the customer in order to succeed to prove that, if reasonable inquiries had been made, the agent's dishonesty would have been revealed and the loss avoided. In summary, the duty of a bank which has come to be referred to as the “Quincecare duty” is not, as that epithet might suggest, some special or idiosyncratic rule of law. Properly understood, it is simply an application of the general duty of care owed by a bank to interpret, ascertain and act in accordance with its customer’s instructions. Where a bank is “put on inquiry” in the sense of having reasonable grounds for believing that a payment instruction given by an agent purportedly on behalf of the customer is an attempt to defraud the customer, this duty requires the bank to refrain from executing the instruction without first making inquiries to verify that the instruction has actually been authorised by the customer. If the bank executes the instruction without making such inquiries and the instruction proves to have been given without the customer’s authority, the bank will be in breach of duty. It will also in making the payment be acting outside the scope of its own authority from the customer and will therefore not be entitled to debit the payment to the customer's account.” (emphases added).[54]Unpacking those two paragraphs: i) Where the agent giving an instruction on the customer’s behalf lacks actual authority to do so, circumstances which engage the Quincecare duty will have the effect that a bank who does not make enquiries cannot rely on the doctrine of ostensible authority, and will have acted outside the scope of its mandate, whatever the consequences of such enquiry might have been (the first highlighted passage). ii) The conclusion that the outcome of any hypothetical enquiry does not matter reflects the fact that, on the position as known to the third party dealing with the agent, ostensible authority is not established. If those facts are changed because an enquiry is made and a response received, the issue of ostensible authority would then fall to be tested by reference to the further information elicited, as well as that previously known. However, where no such enquiry takes place, the third party is in a position where there has been no holding out. It cannot avail the third party that, had an enquiry been made, the third party could then reasonably have relied on the agent’s apparent authority, any more than it is sufficient for a third party who has dealt with an agent without actual or apparent authority to argue that, had they been asked, the putative principal would have clothed the agent with authority. iii) To this extent, the Quincecare duty, like the duty of mitigation, is a disabling duty, the non-fulfilment of which disables the object of the duty from enjoying a right otherwise available to them, but without giving a claim in damages to the other party for loss caused by its non-fulfilment. iv) However, the agent’s duty of care to ascertain their principal’s instructions when they are open to doubt does provide the basis of a claim for damages, if the making of the required enquiries would have led to a counterfactual situation in which the customer would have avoided a loss otherwise suffered. In this context, the issue of what response the enquiry would have elicited is legally significant, in determining if the breach caused loss. v) It is notable that, as formulated by Lord Leggatt, a claim for damages is also premised on there being no valid instruction (the second highlighted passage). If so, it might follow that if the instruction is in fact authorised, the debiting of the account will be valid and there will be no claim for consequential loss, even if the circumstances surrounding the instruction are such as would have caused a reasonable bank to make enquiries which were not made.

The attribution of the dishonest acts of agents to their principals

[55]Cases of the present kind, when one or more natural persons carrying out a fraud use a company to do so, can engage the legal rules which determine when the knowledge or conduct of a dishonest agent is attributed to the principal, whether for the purpose of a claim by a third party seeking to hold the principal liable for that conduct, or where a third party seeks to defend a claim brought by the company by arguing that the conduct precludes the principal from bringing a claim against them (whether on grounds of illegality or a circuity defence) or when the principal seeks to bring its own claim against the dishonest agent. The principle that the dishonest agent’s acts or knowledge are not, at least in some circumstances, attributable to the principal is sometimes referred to as the Re Hampshire Land principle after the case reported at [1896] 2 Ch 743 to which the Judge referred. It had been suggested either that any principle of non-attribution in such circumstances is a policy-driven exception to conventional principles of agent/principal attribution, or that it is simply the application of those principles in a particular context.[56]That is a difficult area of law, which has come before the apex court in three important decisions: Stone & Rolls Ltd (in liquidation) v Moore Stephens (A Firm) [2009] UKHL 39,[2009] 1 AC 1391, Bilta and Singularis. It is not necessary in the present context to seek to summarise the current state of the law. It has repeatedly been emphasised that attribution is an issue where the purpose of the legal rule which gives rise to the question in any individual case will be of paramount importance in determining which principle of attribution applies (Bilta, [40-41], [92]; [202-209]; Singularis, [34]).[57]However, in broad terms: i) Where the claim is brought by the company/principal against the director/agent, the argument that the director/agent can defeat the claim by attributing their own dishonest behaviour to the company/principal will fail, no matter how close the relationship of director and company (Bilta, [7] (Lord Neuberger); [38] (Lord Mance); [89] (Lord Sumption) and [130] (Lords Toulson and Hodge)). That is also the case where the claim is brought against third parties complicit in the agent’s dishonesty (as was the position in Bilta, [207]). ii) This is the case even where the company was incorporated and operated solely for the purpose of effecting the fraud, as appears to have been the position in Bilta itself which was a so-called MTIC fraud which depended on the incorporation of a company operated by fraudsters which would incur VAT liabilities, but be left without the assets to meet them. For the purpose of the company’s claim against the directors in such a case, the court considers the position at the point at which assets are removed from the company, regardless of the fact that it may always have been envisaged and intended that amounts received by the company as part of the fraud would be so applied. iii) Where the director/agent’s fraudulent behaviour on behalf of the company has caused loss to a third party who brings a claim against the company, the company will not generally be permitted to defend the claim on the basis that it is not responsible for the director/agent’s dishonest conduct, responsibility arising either as a matter of vicarious liability or, in some cases, attribution (Bilta, [68], [88] (Lord Sumption); [205] (Lords Toulson and Hodge)). iv) A third category is where the company wishes to sue a third party for failing to protect it against the loss caused to it by the fraud of its directors, albeit the third party is not alleged to have been complicit in that fraud (see the discussion in Bilta, [91] (Lord Sumption), and [207-208] (Lords Toulson and Hodge)). A claim by a company owned and controlled by the fraudster (which company existed solely for the purpose of defrauding banks) against the company’s auditors for failing to detect those fraudulent operations, was dismissed by the majority in Stone & Rolls, albeit the correctness of and basis for that outcome has been the source of enduring controversy. An attempt by liability insurers to defeat a claim for indemnity against the company’s liability to third parties caused by its directors failed for a variety of reasons, including that attributing the directors’ behaviour to the insured company would defeat the very purpose of taking out the insurance, in Arab Bank plc v Zurich Insurance Co [1999] 1 Lloyd's Rep 262.[58]In the present case, we are not concerned with a claim by a company against a third party for damages caused by its failure to prevent the directors from causing the company loss (although it is not difficult to see circumstances in which a claim of this kind might be brought by a company used by the fraudsters as the payee vehicle in an APP fraud), but rather a suggestion that those acting on behalf of the company did not have authority to order payments from its bank account, and that the third party bank was on enquiry of this.[59]A similar fact pattern came before the Court of Appeal on an application for permission to amend in Brink’s-Mat Ltd v Noye [1991] 1 Bank LR 68. Gold stolen from Brink’s Mat’s warehouse was delivered to a company called Scadlynn to be melted down, recast and sold. The directors and sole shareholders of Scadlynn (Chappell and Palmer), who were well aware that the gold was stolen, caused the proceeds to be paid into the company’s bank account and then paid away, thus leaving it without assets to meet its liabilities to Brink’s Mat. Brink’s Mat, which had an arguable claim that Scadlynn had received the proceeds as constructive trustee for it, applied to amend the pleadings to assert causes of action Scadlynn was said to have against the bank. This included a claim that Chappell and Palmer lacked authority to make the payments out of the account because this involved a breach of fiduciary duties they owed to Scadlynn and, having effected the payments without Scadlynn’s authority, the bank was liable to restore the sums paid out to Scadlynn’s account. A claim was also brought for damages for breach of a duty of care owed to Scadlynn and for “knowing assistance” in breach of fiduciary duty, as this species of liability in equity was then formulated.[60]Mustill LJ rejected the suggestion that Scadlynn and Chappell and Palmer were to be equated, such that the latter should be treated as paying their own money out of the account, observing at p.72 that “the corporate entity named Scadlynn was, however odd the notion may seem at first sight, the victim of wrongful arrangements to deprive it improperly of a large part of its assets”. He continued:
“The moneys credited to Scadlynn’s account were impressed with a trust in favour of Brink’s Mat … [T]his additional factor means that Scadlynn as trustee was under a duty to account to Brink’s Mat and Johnson Matthey … and the ability of the company to comply with this duty became progressively diminished as the money was wrongfully bled from the account. It seems to me plain that the acts which created this situation were wrongs committed by the two men against the company, and the fact that they also controlled the company is entirely beside the point … [I]f the facts were nevertheless enough to make it arguable that the bank should have known that some wrong was being done to Scadlynn, then (subject of course to a debate about the scope of the bank’s duty) Scadlynn would have a claim which ought to go to trial.”
[61]Mustill LJ’s analysis very much focussed on the pleaded claim that Chappell and Palmer lacked Scadlynn’s authority to effect the transfers, and he did not find it necessary to consider the remaining causes of action, given that they raised the same issues of evidence and discovery as the lack of authority claim. However, he did say that he was not intending to cast doubt on the views expressed by Nicholls LJ on the other causes of action.[62]Nicholls LJ at p.73 stated that on the facts as pleaded, Scadlynn “was an intended victim, in that Scadlynn was being used as a vehicle for committing a fraud on its creditors and a fraud on those beneficially interested in property held by Scadlynn”, and that in such circumstances, Chappell and Palmer’s fraud was not to be attributed to Scadlynn. Focussing on the claims of knowing assistance in breach of fiduciary duty, and the allegation of knowledge (now dishonesty) on the part of the bank if they were to succeed, he continued:
“I do not regard the proposition that Chappell and Palmer owed fiduciary duties to Scadlynn as an absurdity. Far from it. The existence of such fiduciary duties is one of the means by which the law seeks to protect a company’s creditors and those who have interests in property held by a company … I recognize that, given the background of the robbery, to speak of fiduciary duties owed to Scadlynn by Chappell and Palmer has a very empty and hollow ring, in the sense that there was never any question of Chappell and Palmer implementing any of those duties. The bullion was acquired by Scadlynn in circumstances and for a purpose which was wholly inconsistent with Scadlynn ever paying the proceeds to those lawfully entitled to receive them and with Chappell and Palmer ever doing anything other than appropriate the proceeds for their own purposes. In my view, however, if and to the extent that the bullion was held by Scadlynn on trust for the plaintiff, the appropriation by Chappell and Palmer for their own purposes was in law a breach of their fiduciary duties to Scadlynn.”
[63]While acknowledging that the use of “these fiduciary duties as a foundation, in part, for a claim against the bank seems at first sight unattractive and artificial”, the outcome reflected the fact that a company had an existence separate from its shareholders, particularly where it had creditors. Nicholls LJ’s focus on the “knowing assistance” claims is particularly apparent in the following passage: “The allegations sought to be raised against the bank include an allegation that the bank knew that Chappell and Palmer were defrauding Scadlynn, meaning thereby all persons who had genuine interests in property held by Scadlynn or who had claims against Scadlynn. I say ‘the bank knew’ because the allegation is that the bank wilfully shut its eyes to the fact that Chappell and Palmer were defrauding Scadlynn … If true, I can see nothing remarkable in the bank being under a liability to compensate those who had lawful interests in property held by Scadlynn, or who had lawful claims against Scadlynn, but whose interests and claims were defeated by Chappell and Palmer’s misuse of the money held by Scadlynn”.[64]Sir Roualeyn Cumming-Bruce agreed with both judgments (at p.74), stating that “although there were differences of emphasis in the judgments, I detect no inconsistency between them.”[65]Finally, while Bilta and Brink’s Mat stress the separate identity of the corporate entities and the fraudsters who controlled them at the time of the fraud, there are contexts in which the victims of such a fraud may be able to “pierce the corporate veil” (see the discussion of the “evasion” principle in Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415).

The significance of the present claim in the context of APP frauds

[66]As noted at [45-46] above, it has been held by the Privy Council that a bank does not owe a duty to a third party when acting on payment instructions given or apparently given by the account holder, even if the bank knows that the third party has a beneficial interest in the credit represented by the account balance with the bank, and the circumstances are such that a reasonable banker would have had grounds for considering that there was a real possibility that the beneficial owners of the balance were being defrauded.[67]In the present case, however, if Moorwand was put on enquiry that the transfer instructions were given without RND’s authority, then a third party would be able to achieve a similar (and in some respects, at least, better) outcome than it would have obtained had it benefited from a duty of care in tort, through the mechanism of a derivative action. While a derivative action was the mechanism by which the claim was asserted in this case, on the basis of the unchallenged finding that RND held the credit which represented the Hamblins’ investment as a constructive trustee, a similar claim could have been brought if a receiver was appointed over the company’s claim against its bank or payment services provider by way of equitable execution; or if the company was put into administration or liquidation.[68]While a successful tort claim would have left the Hamblins competing with other creditors of RND in the event of an insufficiency of assets, the effect of the constructive trust finding in this case would appear to be that they would have enjoyed the full benefit of the restoration of the bank account in respect of these transfers. In addition, a tort claim would have left the Hamblins exposed to a reduction of recovery under the Law Reform (Contributory Negligence) Act 1945, the trial judge making a number of findings which would inevitably have featured in an argument of that kind (see the FI Judgment, [36-37], [49], [56], [84-85] and [88]). However, any fault on the part of the Hamblins is not relevant to a claim by RND, nor is any fault by RND relevant to the extent that it pursues a claim in debt.[69]Finally, the claim did not require the Hamblins to prove that Moorwand knew that it had received trust assets, or assets being applied in breach of fiduciary duty.[70]The trial judge was very much alive to the potential significance of this aspect of the claim, observing at [9]:
“The short question in this case is whether the novel approach of Mr and Mrs Hamblin in stepping into the shoes of the fraudster RND by means of a derivative action allows them [to] succeed where others have failed to get around this principled binding legal barrier recently set by the Supreme Court and thus sue ML for alleged failings of such duty owed to the fraudster RND in the absence of expert support of the single joint expert.”
The trial judge commented again on the novelty of the claim at [46].[71]It has not been necessary, given the manner in which this case was argued and the basis on which it was determined by the trial judge and the Judge, to consider a number of issues potentially raised by a case of this kind, including: i) whether, where the company is set up as a vehicle of the fraud from the outset and it is always envisaged by those in control of the company that the proceeds of the fraud will be disbursed from the company, the directors will lack actual authority to give the transfer instructions because the dispersal constitutes a fraud on the company, either because the assets are held on constructive trust by the company or because the transfers will leave the company unable to pay its creditors; ii) whether, if the contract between the bank and the company includes warranties or representations as to the legitimacy of the company’s operations, the bank can rely on breach of the contract by way of a defence of circuity of action, and whether the directors’ knowledge of the ongoing fraud or fraudulent behaviour is attributable to the company for this purpose; and iii) the position where the claim asserted on the company’s behalf is not simply restoration of the account but a claim for damages, on the basis that the making of enquiries by the bank would have prevented further frauds being perpetrated (and the company becoming liable for them) or prevented other transfers from the account.[72]Those issues, and no doubt others, will require full argument and careful consideration in a case in which they arise. However, they do not arise here.

The application of the Quincecare duty to transfer instructions implemented without human intervention

[73]In Quincecare, the transfer instructions which it was said that the bank should not have followed were given over the telephone by Mr Stiller to Mr Tomlinson of the bank’s Hull branch, followed by a written order, with Mr Tomlinson then giving instructions to two bank employees (Mrs Steer and Mr Mumby) to effect the transfers. In Philipp, the transfer instructions were given by Mrs Philipp in person at two branches of Barclays (the Thornbury and Broadmead branches) and confirmed by Mrs Philipp by later telephone calls from the bank. In Singularis the payment requests were approved by bank personnel (Mr Hudson and Mr Metcalfe).[74]In the present case, the precise mechanics by which the transfer instructions given by X were received and actioned remain obscure. On appeal, the argument was advanced that the payments were made “by computer and automatically”. That was challenged on the basis that there was no evidence to support the contention. In circumstances in which the trial judge was never asked to make any findings on whether payment requests were processed without human intervention and no argument was made by Moorwand that a Quincecare duty either did not apply (or applied only in some modified form) were that to be the case, nor were the Hamblins required to raise any counter-arguments as to what, if any, monitoring duty there might be in such circumstances (whether undertaken algorithmically or otherwise), these questions cannot fairly be addressed on this appeal, and I say nothing more about them.[75]Finally, as an electronic money institution, Moorwand was subject to the 2009 Regulations (since replaced by the Payment Services Regulations 2017/752). So far as the 2009 Regulations are concerned: i) Regulation 55(1) provides that a payment “is to be regarded as having been authorised for the purpose of this part only if the payer has given its consent to(a) the execution of the payment transaction; or(b) the execution of a series of payment transactions of which that payment transaction forms part”. Regulation 55(2) provides that consent “must be given in the form, and in accordance with the procedure, agreed between the payer and its payment service provider”. ii) Regulation 61 provides that where an executed payment was not authorised in accordance with Regulation 55, the payment must be refunded.[76]The Judge held that the transfers from RND’s account were authorised for the purposes of Regulation 55, but that the existence of authority under the 2009 Regulations were “nothing to do with the Quincecare duty articulated in Philipps” ([30]) and that “a punctilious observance of the mechanics of a mandate does not absolve a payment service provider from observing the Quincecare duty where it arises, as it does here” ([31]). We received no argument on the significance, if any, of authority being established under the 2009 Regulations for the purposes of the Quincecare duty, and this issue does not arise on this appeal. The Grounds of Appeal Ground 3

The Grounds of Appeal

[77]It is convenient to take Ground 3 first, which raises an argument as to whether the cause of action on which the Hamblins succeeded before the Judge was open on the pleadings. Moorwand suggests that the only basis on which the Hamblins contended that the transfers were not authorised was because the instructions were not given by the real Mr Stanfield.[78]While the Hamblins did plead that only the real Mr Stanfield was authorised to give instructions in relation to the account (Particulars of Claim, [18]), a more general case was advanced that Moorwand was put on enquiry that the payments were not authorised by RND, by reference to the information received by Moorwand when the account was opened ([20]) and the nature of the payments made from the account ([21]). Paragraph 32 advanced the “real Mr Stanfield” point, but paragraph 34 advanced an alternative case to the effect that “it would have been obvious to any reasonable service provider” who scrutinised the payments “that the Account was not being used for the purpose of any legitimate business activity by [RND], but rather was being used in a manner not properly authorized by [RND] and/or for the purpose of money laundering”.[79]Paragraph 32 of the Particulars of Claim clearly advanced a case that the payments had been made by Moorwand in a manner which was not authorised by RND for reasons other than the fact that the instructions were not given by the real Mr Stanfield. It is apparent from the skeleton arguments and written closings before the trial judge that the case was fought on that basis (as Mr Salter KC was constrained to accept), and it is clear from the FI Judgment that the case was decided on that basis.[80]Accordingly, I am satisfied that this argument is without merit.

Ground 1

[81]Ground 1 challenges the Judge’s conclusion as to the first of the two errors of law which he found the trial judge had made and which were said by the Judge to have rendered the trial judge’s evidential assessment flawed.[82]This ground places particular focus on [20(iv)(b)] of the Judgment, where

the Judge stated:

“[The trial judge’s] elision between agent and principal also meant that the Judge failed to take account of the fact that the person acting as soi disant agent of RND was no such thing. The person authorised to act for RND was a Mr Stanfield, a real person who was himself the victim of identity fraud: see paragraphs 15(i) to (iii) above. There was a good deal of material to suggest that the person in fact purporting to act for RND was not Mr Stanfield, hence my use of quotation marks around "Stanfield". The Judge failed to attach weight to these factors by treating the agent acting or purporting to act for RND as indivisible from RND. Thus, the Judge treated all acts by the (unknown) fraudster masquerading as Mr Stanfield as those of RND. Again, for the reasons I have given, this was an error of law.”
[83]Moorwand argues that the Judge erred in law in holding that only the real Mr Stanfield was authorised to act for RND.[84]If the Judge was intending to hold that the real Mr Stanfield was the person (and implicitly the only person) authorised to act for RND, I am satisfied that that would have been wrong. The real Mr Stanfield’s name appeared on RND’s corporate documents and the documents regulating RND’s relationship with Moorwand without his knowledge and consent. As Mr Salter KC argued, in submissions which were not challenged, a person cannot be made a member or director of a company (and thus subject to the legal duties inherent in those capacities) without their consent. That intuitively obviously correct statement is supported by a number of provisions of the Companies Act 2006: i) Section 7(1)(a) provides that a company is formed by one or more persons subscribing their names to a memorandum of association; s.16 that the effect of registration is that the subscribers become members of the company; and s.112(1) that the subscribers of a company’s memorandum are deemed to have agreed to become members of the company, and on its registration become members, and “every other person who agrees to become a member of a company and whose name is entered in its register of members is a member of the company”. ii) As Snowden LJ observed in Re JDK Construction Ltd [2024] EWCA Civ 934, [2024] Bus LR 1694, [51], if there is no assent, “mere entry on the register will not suffice to make that person a member”. The real Mr Stanfield neither subscribed to RND’s memorandum nor agreed to become a member of RND. iii) Section 12 requires a statement of the company’s proposed officers to be filed with the application for registration, and must include (s.12(3)) a statement by the subscribers that “each of the persons named … has consented to act in the capacity”. Appointment as a director only takes effect when the putative appointee agrees to accept that appointment (Palmer’s Company Law (looseleaf, April 2026 release),[8.503]).[85]It is not necessary to determine the further issue of whether the actual shareholder and director of RND is X, even if using the real Mr Stanfield’s identity (a question which raises the “person you are dealing with” argument addressed in a very different legal context in Shogun Finance Ltd v Hudson [2003] UKHL 62, [2004] 1 AC 919). That is because the trial judge’s decision did not rest on X’s actual authority to give the payment instructions in issue, but on whether Moorwand was put on notice that those instructions were given in fraud of RND so as to prevent Moorwand relying on the apparent authority of the person giving the instructions. There was no dispute that, absent Moorwand being put on enquiry, the person purporting to give the instructions on RND’s behalf had apparent authority to do so.[86]That reveals, however, what I respectfully regard as a further error in the Judge’s analysis. His criticism of the trial judge for equating the knowledge of X and RND, and of disregarding X’s fraud on RND in effecting the payments contrary to the Re Hampshire Land line of authorities, would have force if the trial judge’s decision had been premised on such an attribution (either on the basis that X was acting with RND’s actual authority or by way of a defence of illegality). However, the trial judge did not decide the case on either of those bases, but on the basis that Moorwand was not put on enquiry that X was acting in fraud of RND. That formulation assumes that X did not have actual authority to give the transfer instructions and that if Moorwand had been on enquiry that X was defrauding RND, then the instructions were given without RND’s authority.[87]The Judge refers to three paragraphs in the FI Judgment – [69], [109] and [187] – which are said to evidence the trial judge’s error: i) At [69], the trial judge was addressing the UCTA 1977 challenge to clause 16 of the STCs, and RND’s assumed knowledge of the contract term. This paragraph does not appear to have any relevance to X’s authority to give payment instructions on RND’s behalf. X’s authority to commit RND to the Agreement was never in dispute (as I have stated, both parties accepted that a binding contract came into existence between RND and Moorwand). ii) At [109], the trial judge was addressing the conclusions which should have been drawn from the nature of the payments made from RND’s account. The trial judge does say in the penultimate sentence of that paragraph “all these Bitcoin transactions were with ‘John’ and I read … that as a reference to John Stanfield who effectively was RND, and it is clear on their face that these were all authorised”. However, it is clear both from the context of the paragraph, and the words “on their face”, that the trial judge was here addressing the position as it would reasonably have appeared to Moorwand, for the purposes of determining whether the payments would have put Moorwand on enquiry. iii) At [187], the trial judge rightly identified the issue of “being ‘put on enquiry’” as the relevant question. The trial judge stated that “the evidence … shows that ‘John’ or RND used the agreed communication with [Moorwand] for all relevant payments as one and the same fraudulent sham and plainly did authorize payments”, but this was clearly a reference to the position as it appeared to Moorwand, not a legal conclusion that the giving of instructions by “John” was determinative, because the means of communication used is simply one of a number of factors considered by the trial judge, including the nature of the payments. iv) That the trial judge treated the case as one in which the key issue was whether Moorwand was put on enquiry as to X’s misappropriation of funds from RND is clear from(i) his discussion at [112] as to whether the nature of the payments put Moorwand “on notice to indicate that something with the account was not properly undertaken”;(ii) his conclusion at [113] that the payments “would not give rise to any reasonable concerns by Moorwand”;(iii) his statement that both parties had recognised from the outset “that this case is concerned with Lord Leggatt’s decision in Philipp” [159]; and(iv) his conclusion, consistent with Mr Burns’ report, that “there is no reason to suspect any attempt of misappropriation of funds” ([186]).[88]For this reason, I accept Moorwand’s challenge to the first ground on which the Judge concluded that the trial judge had erred in law in the course of reaching his conclusion that Moorwand was not put on enquiry that the transfer instructions were given without RND’s authority.

Ground 6

[89]The second reason given by the Judge for concluding that the trial judge had erred in his evaluative assessment was that the trial judge had wrongly concluded that the underlying facts which gave rise to alleged breaches of money laundering and other regulations applicable at the point in time when RND opened its accounts were irrelevant to the issue of whether Moorwand was on notice that the instructions to effect the payment transfers were made without RND’s authority because they involved the misappropriation of RND’s funds.[90]I should immediately accept that if the trial judge had reasoned on this basis, this would have involved an error of law. As the Judge rightly said at [20(vi]):
“Whilst it is entirely right to say that regulatory failures (for instance: failure to monitor for money laundering) are not relevant to the Quincecare duty, it is an error to assert … that where facts are relevant to one duty they are, ipso facto, irrelevant to another.”
[91]I will refer to the error in reasoning the Judge identified as “the ipso facto error”.[92]The Hamblins’ claim before the trial judge relied upon a series of regulatory breaches, including breaches of the Money Laundering Regulations 2007 and the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The Hamblins argued (in effect) that the knowledge which Moorwand was to be treated as having for the purpose of determining if it was put on enquiry that X did not have authority to give the transfer instructions included information which it would have acquired if it had complied with those money laundering obligations.[93]The Judge identified the paragraphs in which the trial judge had made the ipso facto error as [66], [97], [130], [161], [164], [167], [187], [191] and [192] of the FI Judgment. As to these: i) [66] stated that “this case is not concerned with the early regulatory failures between RND and [Moorwand] but only the common law duty in the tort of negligence and similarly in contract. The matters set out above are regulatory failings”. I do not believe that paragraph evidences the ipso facto error. ii) [97] made the chronological point that “this is not a case where the Regulatory checks and Bitcoin purchases all took place at the same time but were quite separate factual events”. The trial judge had made a similar point at [30] and [40]. Once again, I do not interpret paragraph [97] as demonstrating a decision by the trial judge that the facts giving rise to the regulatory failings in the onboard processing were ipso facto irrelevant to the Quincecare duty, but rather a chronological point of potential application to an assessment of their relevance in fact. iii) [130] comes at the end of a section commenting on Mr Burns’ expert report, and states that the report “does provide some assistance in terms of the regulatory failings, but that is not of any relevance to a common law and contract case”. I am satisfied that that paragraph is to be interpreted as saying that the fact of breach of regulations does not assist on whether the Quincecare duty was breached (i.e. the point accepted by the Judge in the first part of the second sentence of [20(vi] of the Judgment), not that facts giving rise to such duties are ipso facto irrelevant to the Quincecare duty. At a later section of the FI Judgment ([160-166]), the trial judge referred to a number of authorities supporting the proposition that breach of the Regulations did not give a common law claim, but the trial judge did not suggest that those authorities established that the facts giving rise to such regulatory breaches are ipso facto irrelevant to the issue of breach of a common law duty. For that reason, I do not believe that [161] and [164] evidence the ipso facto error. iv) By contrast, in my view it is significant that the trial judge’s interpretation of Mr Burns’ report as set out at [128] was that “despite these initial shortcomings” – i.e. even taking them into account – “there was no reason to suspect any attempt of misappropriation of funds”. That is also true of [167], another paragraph relied upon by the Judge, where the trial judge referred to Mr Burns’ conclusions that “despite that” – viz the regulatory failings identified – “he finds when it comes to the real question in this case, there was nothing that could form the base for a case by RND against [Moorwand]. The trial judge expressly associated himself with the approach adopted by the expert, stating, “that is the approach I follow”. The trial judge made essentially the same point by reference to Mr Burns’ report at [186], noting that although Mr Burns had criticised Moorwand’s conduct from a regulatory perspective, he had concluded that "there is no reason to suspect any attempt of misappropriation of funds”. The trial judge described that as “an important opinion, one that I entirely associate with on my own findings and find myself in full agreement”. v) [187] simply summarises the Hamblins’ pleaded case. vi) [191] and [192] address the separate argument – which the Judge did not endorse and which is not the ipso facto argument – that Moorwand should be treated as having the knowledge which it would have acquired had it performed its regulatory duties. While the trial judge does, in those paragraphs, refer to the fact that the earlier events were “not relevant”, this was justified by the trial judge in chronological terms because the issue of X’s authority to operate the account arose “some months later”,[94]I accept that there are aspects of the trial judge’s phrasing in the paragraphs to which the Judge referred which offer some support for the Judge’s interpretation. However, it is important when interpreting the FI Judgment to have regard to the fact that the trial judge relied upon, and twice confirmed his agreement with, his own interpretation of the only expert evidence before him. There was no suggestion before the Judge or this court that Mr Burns had made the ipso facto error. In these circumstances, I have come to the conclusion that, on a fair interpretation, the trial judge’s decision, like Mr Burns’ opinion, was that “despite” (or in Mr Burns’ words as quoted at [128], “notwithstanding”) the matters giving rise to the regulatory failings, Moorwand was not put on enquiry. Accordingly, I respectfully disagree with the Judge’s conclusion that the trial judge’s evaluative assessment is flawed because the trial judge proceeded on the basis of the ipso facto error.[95]I accept that the trial judge’s conclusion might well be regarded as a favourable assessment of the evidence so far as Moorwand is concerned. Had the issue been one for the Judge to determine de novo, I would have seen no basis for interfering with his conclusion to the contrary effect. However, I accept Mr Salter KC’s submission that the trial judge’s decision was open to him on the evidence before him. Having concluded that the trial judge did not make the two errors of principle the Judge identified, it follows that the high threshold for interfering with the trial judge’s evaluative assessment of the evidence he heard on what is essentially an issue of fact is not met.[96]Mr Hill-Smith criticised the trial judge’s interpretation of Mr Burns’ report, suggesting that, read properly, it supported the Hamblins’ case. As I have stated, the report offered something for both parties, and there was some tension in its concluding paragraph, and between the terms in which the issue concerning a potential Suspicious Activity Report was addressed in the concluding paragraph of the report, and earlier in the text. Those issues must have been obvious to both parties when they took the decision not to call Mr Burns to give evidence at the trial, and not to ask any written questions about the conclusion. In those circumstances, the trial judge was left to reach his own interpretation of the report as it stood. In this respect, the position was no different to where a witness in the course of oral evidence gives answers which might be said to point in different directions, and the judge must reach their own view as to the overall effect of the evidence. The interpretation adopted by the trial judge of Mr Burns’ report was reasonably open to him.[97]Mr Hill-Smith also criticised the inferences the trial judge drew when concluding that the transfers from RND’s account to effect Bitcoin purchases would not have put Moorwand on enquiry. However, it was open to the trial judge to conclude that, in circumstances in which one of the accounts RND had opened was a Bitcoin account, the use of funds received into RND’s GBP account for the purposes of acquiring Bitcoin would not have put Moorwand on enquiry that funds were being misappropriated from RND, because the opening of the Bitcoin account suggested that RND had contemplated some form of dealing in Bitcoin from the outset. Mr Hill-Smith’s criticisms of the trial judge’s inferences as to the reasons for Moorwand’s rapid growth do not engage the key issue of whether Moorwand was put on enquiry that the transfers were not made for RND’s purposes.

Conclusions on the appeal against the Judge’s finding of liability

[98]For these reasons, I have come to the conclusion that the threshold for revisiting the trial judge’s evaluative conclusion that Moorwand was not put on enquiry that the transfer instructions were given without RND’s authority was not met in this case. As a result, I would allow the appeal.

Grounds 7 and 8

[99]Grounds 7 and 8 concern the Judge’s decision to award interest under s.35A of the Senior Courts Act 1981 on the amounts transferred from RND’s accounts with Moorwand from the date of the transfers.[100]Section 35A provides:
“(1) Subject to rules of court, in proceedings (whenever instituted) before the High Court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as rules of court may provide, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and— (b) in the case of the sum for which judgment is given, the date of the judgment.” (b) in the case of the sum for which judgment is given, the date of the judgment.”
[101]Section 35A requires a claimant to have a cause of action before statutory interest can run. It is well-established that a claim for declaratory relief does not provide a basis for a s.35A interest award (Abraaj Investment Management Ltd v KES Power Ltd [2026] EWHC 441 (Comm), [65] and Odyssey Aviation Limited v GFG 737 Limited [2019] EWHC 1980 (Comm), [17] and [22]).[102]A claim against a bank which has wrongly debited a customer’s account is treated as a claim in debt rather than for declaratory relief: Sagicor Bank Jamaica Ltd v Seaton [2022] UKPC 48, [2023] 1 WLR 1759, [19]. Where the account balance carries interest as a matter of contract, that interest will be due on the amounts wrongly debited ([20-21]). Statutory interest, however, requires a cause of action to have accrued (i.e. not simply the existence of a debt, but one which has become payable). Generally, a credit balance in a bank account (and there was no suggestion that a credit balance with an Electronic Money Institution should be treated differently in this respect) only becomes payable after a demand has been made (Joachimson v Swiss Bank Corp [1921] 3 KB 110, 127). There is support for the view that a cause of action in relation to a wrongful debiting similarly only arises after a demand has been made. A passage in the fifteenth edition of Paget’s Law of Banking to this effect is cited with approval in Sagicor, [19] (see now the 16th edition [22.69]). That is also the effect of National Bank of Commerce v National Westminster Bank plc [1990] 2 Lloyd’s Rep 514, 517, which holds that the cause of action in such a case accrues on the demand for payment, not on the date of the wrongful transfers.[103]The argument that no demand was made was taken before the Judge who concluded that what would have happened had the wrongful transfers not been made is that the full account balance would have been paid to the Hamblins. The Judge held that this made “the point about the absence of a demand … altogether irrelevant” (Interest Judgment, [8]). The Judge does not appear to have been referred to the authorities which establish that RND’s cause of action did not arise before a demand was made. On that basis, and subject to an additional point raised by Mr Hill-Smith with which I deal below, in my view the requirement in s.35A for a cause of action to have arisen before an award of statutory interest can be made was not satisfied in this case until a demand for payment was made. The fact that the account holder would have withdrawn the funds and accounted for them to a beneficiary for whom the credit balance was held on trust (the Judge’s premise) cannot, in my view, affect the fact that the terms of s.35A were not satisfied. As the Judge rightly recorded, no claim for lost interest as damages was open (Interest Judgment, [3]).[104]However, at the hearing before us Mr Hill-Smith came up with an alternative argument – that the relationship of banker and customer came to an end on RND’s dissolution on 31 July 2018, with the result that no demand was necessary to render the account balance payable. It is clear that where a bank account has been validly closed, there is no need for a further demand to render a credit balance payable, and that is also the position when the relationship of banker and customer is terminated (Paget’s Law of Banking 16th ed., [22.68]). However, that argument raised issues as to whether any amount could be said to be payable to RND from the point when it was struck off the register, the effect of its restoration to the register, and whether it could be said to have suffered loss of use of the amount claimed in the intervening period. These issues were not the subject of submissions to us, and in circumstances in which the interest decision is academic, I say no more about them.[105]I agree.[106]I also agree. Another troubling feature of this already sad case is that we were told that the parties’ combined costs of the trial and two appeals are now in the region of £1 million. Disproportionate costs expenditure was deplored in Piglowska v Piglowski [1999] UKHL 27; [1999] 1 WLR 1360, where the costs equalled the modest assets available for distribution. Here, they represent seven times the original disputed sum. I record these matters in the hope, expressed in that case by Lord Hoffmann, that it might “reduce the chances of such disasters happening to other people in the future”.