BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building, Fetter Lane London, EC4A 1NL |
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B e f o r e :
____________________
NATIXIS S.A. | Claimant | |
-and- | ||
MAREX FINANCIAL | First Defendant/Part 20 Claimant | |
-and- | ||
ACCESS WORLD LOGISTICS (SINGAPORE) PTE LTD | Second Defendant/Part 20 Defendant | |
-and- | ||
MCAP | ||
(A Lloyd's syndicate, sued on its own behalf and on behalf all other underwriters of contracts placed with Lloyd's having unique market references B0713MACCD1701988 and B0713MACDD1601988) | Fourth Party/Part 20 Defendant |
____________________
for the Claimant
Alain Choo-Choy QC, Robert Weekes, Laura John, and Max Kasriel (instructed by Memery Crystal LLP) for the First Defendant/Part 20 Claimant
Robert Thomas QC and Nicola Allsop (instructed by Hill Dickinson LLP)
for the Second Defendant/Part 20 Defendant
Luke Parsons QC and Ben Gardner (instructed by Kennedys Law LLP
for the Fourth Party/Part 20 Defendant
Hearing dates: 21, 22, 23, 24, 25, 28, 29, 30, 31 January 2019
1, 4, 5, 6, 7, 8 and 11 February 2019
____________________
Crown Copyright ©
MR JUSTICE BRYAN:
C. The Facts and Chronology of Events
D. The Terms of the Purchase Contracts
E. The Construction of the Purchase Contracts and their Breach
G. Contractual Promises and Estoppel
H. Negligence and Negligent Misstatement
I. Was Access World negligent in relation to the authentication of PC4-5?
J. Causation and Contributory Negligence
K. Access World's Terms and Conditions
A. INTRODUCTION
A.1 The parties
A.2 The Purchase Contracts
A.3 The false warehouse receipts
"Forged Warehouse Receipts
Access World has become aware that there are forged warehouse receipts in our name circulating in the market. We encourage holders of any Access World warehouse receipts to seek authentication from the relevant issuing office for any warehouse receipts not issued to them directly by Access World."
" ... In order to provide relevant market participants with additional clarity, we are now announcing a four business day authentication window commencing Friday 10 February 2017 and ending Wednesday 15 February 2017. Holders are requested to make appointments with the relevant issuing office to be scheduled during business hours within this period. We note that currently all relevant forged warehouse receipts we have seen have been in the name of Access World Logistics (Singapore) Pte Ltd (previously Pacorini Metals (Asia) Pte. Ltd.) and have been solely across nickel . ... "
A.4 The Claims and Part 20 Claims
A.4.1 Natixis' claim
A.4.2 Marex's defences and their evolution
(1) First, it submits that the Purchase Contracts are null and void as a result of a common and fundamental mistake as to the authenticity of the warehouse receipts. If this were the case this would give Natixis a restitutionary claim, but Marex alleges that it has changed its position in good faith and restitution would be inequitable.
(2) Secondly, it submits that Marex is not in breach, rather it gave Natixis good title because Natixis has a valid claim against the warehouse, Access World because the receipts, even though they are fake, give Natixis the right to delivery of the nickel, because Access World had contractually promised to deliver the nickel against the receipts it inspected and Access World is estopped, as against Natixis, from denying authenticity because it had represented to Natixis that the documents were authentic. Whilst this plea originally related to PC1-3 as well as PC4-5, in a letter on 9 January 2019 (i.e .very shortly before the start of trial) Marex abandoned its pleaded case that it and Natixis had estoppel claims against Access World in relation to PC1-3 (Marex accepting that the effect of Access World's disclaimer when it communicated with Marex regarding the status of PDF copies of the receipts used for PC1-3 was such as to prevent any estoppel by representation from arising as against Access World). In doing so Marex confirmed that it "admits liability to Natixis for breach of contract in respect of the PC1-3 contracts" subject only to Marex's common mistake argument.
(1) US$30,428,374.40 (the price Natixis paid to Marex under the Purchase Contracts).
(2) US$1,476,025.80 (the loss Natixis incurred when it unwound the hedges of the Purchase Contracts).
(3) US$209,694.25 (the sums which Natixis would have received on the Prompt Dates (17 May 2017 and 21 June 2017) if not for Marex's breaches of the Purchase Contracts.
(4) Statutory interest, at a rate and on a basis to be determined in due course (if not agreed), from the Prompt Date until date of judgment.
A.4.3 Marex's claims against Access World
"AW has, at all material times, been (and continues to be) obliged to deliver the relevant metal to Natixis upon presentation of the receipts delivered by Marex to Natixis under PC4-5…(notwithstanding that they were subsequently found to be forgeries). The correct position is that:
(a) AW promised or warranted to deliver up the specified metal in respect of PC4 and PC5 to the endorsee of the relevant warehouse receipts, upon presentation of those receipts;
(b) It is irrelevant that the receipts have, in the course of these proceedings, been confirmed to be forged documents. This is for two independent reasons:
(i) First, the warranties that AW gave were in respect of those very documents that have since been found to be forged. AW did not give warranties in respect of some other documents. Indeed, the very purpose of AW being asked to authenticate those documents was to provide assurance when those documents were presented to AW for delivery up of the metal, AW would honour those documents and deliver up.
(ii) Second, in any event, having expressly confirmed the authenticity of the PC4 and PC5 Receipts, and Marex and Natixis having relied on such confirmations when entering into the contracts, AW is estopped from denying (i) the authenticity of the receipts; and/or (ii) the right of an endorsee or transferee of the receipts to call for delivery of the metal upon presentation of the endorsed receipts to AW. This is a clear case for the operation of estoppel by representation. The evidence will show that all of the elements of the estoppel are made out. The arguments against it, such as the "shield/sword" point or that title cannot be derived through estoppel when there has been forgery, are misconceived. Marex relies on the estoppel not as a foundation of its or Natixis' cause of action against AW, or as the basis of title to the metal, rather, the estoppel operates to preclude AW from denying the authenticity of the receipts, with the result that, pursuant to its warranties to deliver metal upon presentation of original receipts (the warranties being the basis of the cause of action), AW cannot refuse to honour its obligations to deliver (and thereby pass title to) the metal.
(c) Accordingly, Natixis' claim against Marex for the non-delivery of the metal or contractually required warehouse receipts must fail. Natixis is entitled to delivery up of the metal from AW upon presentation of the receipts in fact delivered by Marex to Natixis under PC4 and PC5 (and to that extent Natixis' claim against AW for delivery up or specific performance must succeed), Marex has not breached its obligations under PC4 and PC5, and/or Natixis has in any event not suffered any loss by reason of any breach of contract by Marex."
"42. By way of overview, Marex contends that AW is contractually liable on promises (or warranties) of delivery of metal that it made to Marex and/or Natixis, as contained in:
(a) The thirteen PC4 receipts and the PC5 receipts that were expressly authenticated by AW in its emails dated 22 December 2016 and 9 January 2017 (the "Authentication Emails") ; and/or
(b) The so-called PMA letters dated 23 November 2016, 19 December 2016 and 3 January 2017 sent by AW to Natixis with specific reference to the PC4 and PC5 receipts (the "PMA letters") .
(a) that this term is to be understood in the sense of "original" as determined by AW itself in connection with the transactions in contemplation of which the Authentication Emails and PMA letters were provided;
(b) alternatively, if the term is to be understood in the sense of what may now objectively be shown to be a genuine original receipt, that AW is estopped by representation from denying that the PC4-5 receipts are genuine original receipts, with the result that AW is therefore required to comply with its delivery promises as if the PC4-5 receipts were (as it represented them to be at the time) genuine original receipts.
(a) First and foremost, none of AW's promises or warranties of delivery are expressed to be (or should be construed as being) conditional upon either Natixis or Marex (as the promisee) having pre-acquired title to the metal in question. As seen in sub-section (2) below, AW's undertaking to deliver as contained in its warehouse receipts operates and is implemented by AW without reference to or investigation into who has title. In practice, the endorsement and transfer of the warehouse receipts by the order party to the next endorsee and from one endorsee to the next is clearly intended as a means of transferring title or, at least, the right to claim delivery of the goods, but AW's promise to deliver (and the performance thereof) is not itself conditional (or expressed to be conditional) upon the last endorsee's proof or demonstration to AW that it has independently acquired title from the true owner.
(b) Second, it may fairly be said that, in a case where AW has mistakenly authenticated particular receipts as genuine receipts, it has made its delivery promises on the basis of mistake. However, AW has rightly not alleged that, if its delivery promises are otherwise contractually binding, they should be seen as void or unenforceable on the basis of the principles of common mistake reviewed in The Great Peace. Any attempt by AW to rely on such principles would inevitably fail because: (i) AW was at fault in wrongly confirming the PC4-5 receipts as authentic (see section (F) below on AW's negligence), (ii) by its Authentication Emails, AW effectively warranted the authenticity of the PC4-5 receipts, and (iii) contractual performance of the delivery promises is not in any event impossible as explained in sub-paragraph (c) below.
(c) Third, the metal in the present case is not a form of unique property, but a fungible. This is not disputed by AW. Accordingly, the fact that the particular metal described in the receipts by warehouse lot numbers has since been claimed by the true owner(s) is not an obstacle to an order for delivery up or specific performance of AW's delivery promises. It is open to AW either to re-acquire the same metal lots in so far as the particular lots remain within its warehouses, or (in so far as the metal has left AW's warehouses) to acquire metal of similar brand, shape and weight, in order to honour its promises of delivery.
(Marex's emphasis)
(1) Each of Natixis and Marex confirmed that if they were wrong in their submission that there was a contract with Access World – i.e. there was no contract, then the estoppel case cannot arise - for otherwise, as was also confirmed by them, estoppel would be used as a sword and not as a shield which it was accepted is not permissible.
(2) Contrary to the submissions at paragraph 46(a) of its Written Closing (quoted above), in his oral closing Mr Choo-Choy realistically (and correctly), accepted that, "the better construction and therefore the correct construction is that 'originally' means objectively original" with the result that if there was a contractual promise by Access World it was in respect of an original/genuine warehouse receipt and in consequence Marex would then need to prove that Access World is estopped by representation from denying that the PC4-5 receipts are genuine if it were to succeed against Access World on such basis.
A.4.4 Marex's claims against MCAP
A.5 The Confidentiality Order
(1) Certain features which could reveal information that is confidential to Access World as identified in the confidential Schedule attached to the Confidentiality Order (the "Schedule"), were to be protected as follows:-
(a) Those features should not be referred to or otherwise identified in open court save in the manner defined in the Schedule.
(b) Any documents referring to those features should be redacted in order to remove reference thereto.
(c) Cross-examination should be by reference to the redacted documents.
(d) Cross-examination and submissions in relation to the Warehouse Receipt Authentication Checklist should be by reference to a hard copy of the Authentication Checklists only and the Authentication checklists should not be made publicly available.
(2) The Schedule was confidential and was not to be revealed to, or its contents otherwise communicated to, any non-party.
B. The Witnesses
B.1 The Factual Witnesses
B.1.1 Natixis' witnesses
B.1.2 Marex's Witnesses
B.1.3 Access World
B.2 The Expert Witnesses
C. The Facts and Chronology of Events
C.1 Marex's Business and Repurchase Transactions
C.2 Marex's Warehouse Receipt Financing Business
C.3 The Introduction of Marex to CHH & Genesis
"KN I – do we – I mean, you know, do we know why they won't just do a new one to the bank, do we know why that is? I'm not sure I wanna ask, but I mean, do we know why? Do you have any idea?
JF No, I don't know why, and from what I've been told, you know, in transactions that they've done in the past, with other counterparties, you know, it's just a question of endorsing – I don't know what they want – you know what they don't wanna do a clean one"
"In reply to your inquiry, we advise that based upon the photocopy document you provided and according to our records a Warehouse Receipt with cargo details and Reference No. AWSG/KR/0027116 and AWSG/KR/0027117 dated 08/11/2016 had been issued by Access World (formerly known as Pacorini Metals). We however cannot confirm the authenticity and/or validity of the photocopy document until we are in possession of the original Warehouse Receipt and have verified same to our satisfaction. Any information given and/or statement made is for information purposes only without any engagement and/or liability on our part. …"
"So why – I mean why; why, why are they – it just scares the s..t out of me that they're putting us under so much pressure for this.
These guys – Steven Kao is sitting in that room saying we're dealing in billions of dollars every day, y'know, he's desperate for 5 million dollars – really?"
"Based on the warehouse receipts that we have received from the courier today, we have authenticated to be issued by us. The 13 sets of warehouse receipts which we have authenticated as below …" [Lists the 13 PC4 receipts]
"Did he set a max level? Lastly, I assume he is aware from Treasury that we have not yet been able to increase our counterfeit document cover. Given that we now authenticate the documents, the risk is diminished (unless of course the warehouse and the client work in concert)."
"… that phone call wasn't good on all sorts of levels – a) they knew they were s..t b) we got f…..g lined up c) y'know – sorry it went wrong […] Completely and absolutely f….d. Completely played. Everyone knew what was going on. I f…..g wish I knew this phone call before I did this. Either he didn't tell us or … right? We got f…..g used. Absolutely f…..g used and played."
"I wouldn't have gone anywhere near this s..t. Inconsistencies – this went wrong, that went wrong … yeah well … [Bill Silverstein] f…..g knew all this s..t. All his goal was to find a hole to fill from Freepoint – and he found one. It might cost me my job."
D. The Terms of the Purchase Contracts
(1) The definitions in Clause 1 vary in order to set out the different Weights, Prices, Payment Amounts, Payment Dates and Prompt Dates.
(2) Schedule 1 to each contract sets out the brand, shape and location of each parcel of nickel, together with the Agreed Discount. This discount on the price effectively represents the interest charged by Natixis, together with the warehouse rent which will be incurred up until the Prompt Date.
(3) Each definition of Weight in Clause 1 refers to Schedule 2 of the respective Purchase Contract. In the case of PC1-3, Schedule 2 sets out specific warehouse lot numbers, as not all of the metal on the relevant receipts was being purchased. In PC4 and PC5 Schedule 2 refers to the warehouse receipt numbers which in turn refer to specific lot numbers.
"1. Definitions
Seller: Marex…
Buyer: Natixis…
Metal: London Metal Exchange ("LME") registered grade Nickel of Specification, Brand and Shape at Location.
Brand: The brand of metal specified in Schedule 1.
Weight: 401.938 metric tonnes (with warehouse receipt lot numbers as specified in Schedule 2)
Shape: shape(s) of metal specified in Schedule…
Payment: freely transferable and immediately available funds in U.S. Dollars by telegraphic transfer to Seller's Account.
Payment Date: the Business Day immediately following the Trade Date.
Prompt Date: 17th May 2017
…
Required Documentation means, unless otherwise agreed by the parties, the warehouse receipts, certificates of origin, certificate of analysis or such other documents as agreed to be delivered by the parties in respect of the Purchased Metal on the Trade Date, as specified in Schedule 1.
(a) Seller shall sell the Purchased Metal to the Buyer for the Payment Amount.
(b) Seller shall deliver or procure delivery of the Required Documentation to Buyer by no later than 11.00 am London time.
(c) Buyer shall make payment to the Seller of Payment Amount, provided that Buyer has received the Required Documentation referred to in paragraph 2(b) above.
(d) Title to the Purchased Metal shall pass to the Buyer on receipt by the Seller of the Payment Amount; and
(e) Buyer shall, by no later than 11:00 am London time, instruct Seller to execute an order for Buyer to enter into an Exchange Contract whereby Buyer shall sell futures contracts for Metal of Weight (or the whole number of lots nearest to such Weight) (expressed in U.S. Dollars per metric tonne) basis the LME Closing Price for the Prompt Date as specified in section 1 above.
(a) Seller has good title to the Purchased Metal and the full and unqualified right to sell and deliver the Purchased Metal to the Buyer;
(b) the Purchased Metal is free of any mortgage, charge, lien, encumbrance or adverse claim of or by any third party; and
(c) the Purchased Metal complies in all respects with the Brand, Shape and Weight criteria.
(a) it is contracting as principal hereunder (and not as agent of any third party) and that it has full power and authority to enter into the Transaction and to perform its obligations thereunder.
(b) (i) it has entered into the Transaction with a full understanding of the terms and risks thereof, (ii) it is capable of assuming, and does assume, those risks, (iii) the other party is not acting as a fiduciary for or an adviser to it in respect of the Transaction, and (iv) it has not given the other party any advice concerning the investment merits of the Transaction or the accounting or taxation treatment of the Transaction; and
(c) It is acting for its own account, and it has made its own independent decisions to enter into Transactions…
(a) Execute and deliver, or cause to be executed and delivered all such instruments; and
(b) To take all such actions,
in each case as the other party may reasonably request or may be required to effectuate the intent and purposes, and to carry out the terms, of the Transactions, including the procurement of any third-party consents, including such consents as may be necessary or desirable for export of the Purchased Metal.
(a) Delivery of the Purchased Metal shall occur on the Payment Date provided that Buyer shall not have a legal or beneficial interest in the Purchased Metal until the Payment Date and until it has made full Payment of the Payment Amount and nothing in this agreement may be interpreted to give contrary effect.
(b) No term, condition, warranty or representation of any kind whatsoever (express or implied) is or has been given by or on behalf of Seller in respect of the Purchased Metals, other than those set out in paragraphs 3 and 4 above. Except as provided in paragraph 3(c), all terms, conditions, warrants and representations (express or implied and whether statutory, collateral hereto or otherwise) relating to the Purchased Metal, its specification, age, quality (satisfactory or otherwise), description or as to its fitness for any purpose are hereby expressly excluded.
…
…
E. The Construction of the Purchase Contracts and their Breach
E.1 The Admitted Breaches of the Purchase Contracts
(1) Marex breached Clause 2(d) of the Purchase Contracts as it did not pass title to the Purchased Metal to Natixis on receipt by Marex of the Payment Amounts.
(2) Marex breached Clause 3(a) of the Purchase Contracts as Marex did not have good title (or indeed any title) to the Purchased Metal and did not have the full and unqualified right to sell and deliver the Purchased Metal to Natixis.
(3) Marex breached Clause 3(b), in that the Purchased Metal was not free of any encumbrance or adverse claim of or by any third party (in this regard it is common ground that genuine warehouse receipts existed bearing the same reference numbers as the documents delivered by Marex covering the lots of nickel in question and those receipts were presented to Access World, cancelled and all but 42mt was delivered to the properly entitled third parties).
(4) Marex breached Clause 6(a) of PC4 and PC5 in that Marex failed to deliver the PC4 and PC5 Purchased Metal to Natixis on the Payment Date.
E.2 The disputed breaches of the Purchase Contracts
"(b) … delivery of warehouse receipts (by which Natixis would obtain the right to call for delivery up of the relevant metal by AW) was the means by which Marex was to perform its central obligation to deliver the Purchased Metal. No physical delivery of metal was required.
(c) Importantly, the context (as known to both Marex and Natixis) in which the contracts were signed was that, prior to signing, copies of the warehouse receipts (and indeed of the certificates of analysis) to be delivered by Marex to Natixis were first sent by Marex to Natixis after Marex had obtained the same from CHH. Natixis knew in this regard that Marex was proposing to contract with it back to back with CHH, contrary to the assertion in Natixis' opening skeleton argument.
(d) Construed in context, therefore, the references to warehouse receipts in Schedule 1 are properly to be understood as references to the warehouse receipts to be obtained by Marex from CHH, which were thereafter to be provided by Marex to Natixis. Thus, Marex's promise in clause 2(b) to deliver the warehouse receipts was, on proper analysis, a promise to deliver the receipts that were to be provided to it by CHH. There was no promise (or warranty) as such that those receipts would be genuine, only a common underlying assumption (backed by Marex's pre-contractual checks) that they were genuine."
(1) Pursuant to Clause 2(b), on the Payment Date the Seller is required to deliver or procure delivery of the "Required Documentation" such "Required Documentation" being defined in Clause 1 and Schedule 1 and includes "warehouse receipts".
(2) The ordinary and natural meaning of the word "warehouse" is to the warehouse (here Access World), and the ordinary and natural meaning of the word "receipt" is to a receipt issued by such warehouse – the 16 documents delivered to Natixis in this case were not issued by the "warehouse" (Access World) nor can they be properly described as "warehouse receipts". They were not "warehouse receipts" at all – they were forged pieces of paper that had not been issued by the warehouse (Access World) and were not receipts for nickel deposited with Access World. Marex's construction of Clause 2(b) does violence to the express language of Clause 2(b) and is not justified by a consideration of the admissible factual matrix.
(3) If the obligation under Clause 2(b) was to deliver whatever paper had been delivered to Marex by CHH, Clause 2(b) could, and would, have been drafted differently. Such a (different) contractual bargain could easily have been expressed as one to deliver whatever documents that CHH delivered to Marex as fulfilling Marex's delivery obligation under Clause 2(b). The Purchase Contract was Marex's in-house standard form contract and had Marex had such intention it would no doubt have drafted Clause 2(b) differently.
(4) The promise to supply (genuine) warehouse receipts is also entirely consistent with Marex's express warranty and representation at Clauses 3(a) and 3(b) that it had the full and unqualified right to sell and deliver the Purchased Metal to Natixis (reinforced by Clause 6(b) emphasising that Marex makes the warranties and representations set out in Clause 3). Whilst the question of title is separate from the question of the warehouse receipts (a warehouse receipt, as such, is not a document of title) a genuine warehouse receipt is part and parcel of the package of documents which Marex is obliged to supply and which will facilitate Natixis getting the nickel out of the warehouse, or the nickel being put on LME warrant or being the subject of a new warehouse receipt.
(5) It is also to be borne in mind that the final page of each Purchase Contract provides, "Please confirm that the foregoing correctly sets forth all the terms and conditions of our agreement with respect to the Transaction by responding within three Business Days by signing in the space provided below …" and each of the Purchase Contracts was signed by both parties, such parties thereby confirming that it correctly sets forth all of the terms of their agreement. If Marex's interpretation of Clause 2(b) was correct the express wording of Clause 2(b) would not suffice and it would be necessary to imply additional wording to the effect that the promise was (only) a promise to deliver the documents provided to Marex by CHH, whether or not they were genuine.
rise to the logical (but surprising) conclusion that these contracts could only be performed by tender of CHH's documents, even if they were forged, and could not be performed by tender of genuine warehouse receipts if CHH did not supply them to Marex.
"5. Buyer and Seller each agree to:
(a) Execute and deliver, or cause to be executed and delivered all such instruments; and
(b) To take all such actions,
in each case as the other party may reasonably request or may be required to effectuate the intent and purposes, and to carry out the terms, of the Transactions, including the procurement of any third-party consents, including such consents as may be necessary or desirable for export of the Purchased Metal"
F. Common Mistake
F.1 The allocation of risk
"Logically, before one can turn to the rules as to mistake, whether at common law or in equity, one must first determine whether the contract itself, by express or implied condition precedent or otherwise, provides who bears the risk of the relevant mistake. It is at this hurdle that many pleas of mistake will either fail or prove to have been unnecessary. Only if the contract is silent on the point, is there scope for invoking mistake. … The first imperative must be that the law ought to uphold rather than destroy apparent contracts."
"Circumstances where a contract is void as a result of common mistake are likely to be less common than instances of frustration. Supervening events which defeat the contractual adventure will frequently not be the responsibility of either party. Where, however, the parties agree that something shall be done which is impossible at the time of making the agreement, it is much more likely that, on the true construction of the agreement, one or other will have undertaken responsibility for the mistaken state of affairs."
F.2 Applicable principles – common mistake
"… the following elements must be present if a common mistake is to avoid a contract: (i) there must be a common assumption as to the existence of a state of affairs; (ii) there must be no warranty by either party that that state of affairs exists; (iii) the non-existence of the state of affairs must not be attributable to the fault of either party; (iv) the non-existence of the state of affairs must render performance of the contract impossible; (v) the state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible."
F.3 Application of the principles to the facts
F3.1 The risk that the receipts were not genuine is upon Marex (element (ii))
F3.2 The alleged common assumption (element (i))
"It is clear as a matter of fact (despite Natixis' denial) that there was a common and fundamental assumption by both Marex and Natixis in connection with the financing transactions reflected in PC1-5 that (1) delivery of the relevant metal would be by means of the transfer of warehouse receipts relating to it; (2) the warehouse receipts to be delivered by CHH to Marex would thereafter be delivered on by Marex to Natixis; and (3) those warehouse receipts would be genuine (i.e. authentic) warehouse receipts, issued by AW, entitling the endorsee or transferee of those receipts to call for delivery by AW of the metal described in the receipts, upon presentation thereof to AW. Furthermore, it is now common ground that the PC1-5 receipts delivered by CHH to Marex and delivered in turn by Marex to Natixis were not authentic, and that the last (and critical) assumed fact was a mistaken assumption."
(emphasis added)
"As explained above, Marex did not tell me what the outcome of Access World's "authentication" was for the first two transactions. I viewed the lack of a negative as a positive. The fact that a recognised market-counterparty such as Marex was willing to enter into the trades allowed us, I believed safely to assume that the warehouse receipts were authentic. To put it another way, if we had been told that the receipts were not authentic, we would not have proceeded with the trades."
(emphasis added)
"A state of doubt is different from that of mistake. A person who pays when in doubt takes the risk that he may be wrong …"
"25. There is some authority for the view that a state of doubt does not amount to a mistake: see Burrows: The Law of Restitution (2nd ed 2002) pp 139–140. In the Kleinwort Benson case ([1999] 2 AC 349, 410) my noble and learned friend Lord Hope of Craighead said:
"A state of doubt is different from that of mistake. A person who pays when in doubt takes the risk that he may be wrong — and that is so whether the issue is one of fact or one of law."
"Logically, before one can turn to the rules as to mistake … one must first determine whether the contract itself, by express or implied condition precedent or otherwise, provides who bears the risk of the relevant mistake. It is at this hurdle that many pleas of mistake will either fail or prove to have been unnecessary."
F3.3 Was the non-existence of the state of affairs attributable to the fault of Marex? (element (iii))
"What happens if the party, who is seeking to rely on the mistake, had no reasonable grounds for his belief? An extreme example is that of the man who makes a contract with minimal knowledge of the facts to which the mistake relates but is content that it is a good speculative risk. In my judgment a party cannot be allowed to rely on a common mistake where the mistake consists of a belief which is entertained by him without any reasonable grounds for such belief: cf. McRae v. Commonwealth Disposals Commission (1951) 84 C.L.R. 377, 408. That is not because principles such as estoppel or negligence require it, but simply because policy and good sense dictate that the positive rules regarding common mistake should be so qualified."
"77. The second and third of these elements are well exemplified by the decision of the High Court of Australia in McRae v Commonwealth Disposals Commission (1951) 84 CLR 377. The Commission invited tenders for the purchase of "an oil tanker lying on Jourmaund Reef ... said to contain oil". The plaintiff tendered successfully for the purchase, fitted out a salvage expedition at great expense and proceeded to the reef. No tanker was to be found—it had never existed. The plaintiff claimed damages for breach of contract. The Commission argued that the contract was void because of a common mistake as to the existence of the tanker.
"a party cannot rely on mutual mistake where the mistake consists of a belief which is, on the one hand, entertained by him without any reasonable ground, and, on the other hand, deliberately induced by him in the mind of the other party."
"then the Commission cannot in this case rely on any mistake as avoiding the contract, because any mistake was induced by the serious fault of their own servants, who asserted the existence of a tanker recklessly and without any reasonable ground."
F3.4 The non-existence of the state of affairs must render performance of the contract impossible (element (iv))
F.3.5 Existence/vital attribute of the consideration to be provided/circumstances which must subsist if performance of the contractual adventure is to be possible (element (v))
F.3.6 Conclusions on Mistake
F.3.7 Restitution and Change of Position
G. Contractual Promises and Estoppel
G.1 The contractual claims
(1) The thirteen PC4 receipts and the PC5 receipt that were expressly authenticated by Access World in its emails dated 22 December 2016 and 9 January 2017 (the Authentication Emails) ; and/or
(2) The so-called PMA letters dated 23 November 2016, 19 December 2016 and 3 January 2017 sent by Access World to [Natixis] with reference to the PC4 and PC5 receipts (the PMA letters).
"The above statements had contractual effect. They are drafted in the terms of contractual warranties or promises and they are important statements intended to form the basis of legal relations and to be relied upon. Further, they relate to matters which were within AW's own knowledge and which, vis-à-vis Marex and Natixis, AW was in a better position to know or ascertain the truth of. The correct analysis therefore is that the warranties given by AW through its emails of 22 December 2016 and 9 January 2017 (collectively, the "Authentication Emails") and/or the PMA letters constituted collateral warranties – in the sense of being collateral to the PC4 and PC5 contracts between Marex and Natixis."
"In a broad sense, the warranties given by AW through its emails of 22 December 2016 and 9 January 2017 (collectively, the "Authentication Emails") and/or the PMA letters can be described as collateral warranties – in the sense of being collateral to the PC4 and PC5 contracts between Marex and Natixis, but whether or not collateral, they gave rise to contracts in their own right as between AW and Marex / Natixis as described above."
(1) What is the nature of the relationship between a warehouse and anyone seeking delivery up of goods, in the present case the nickel held in one or more of Access World's warehouses, and
(2) What is the role of a warehouse receipt, and in particular the warehouse receipts issued by Access World?
G.2 The basis on which goods are stored in a warehouse
"57. It will be apparent from the above that (absent the transfer of a document of title to the goods, namely, a bill of lading) it is only when a warehouse operator itself attorns to the buyer that delivery is effected. It is at that point that the third party becomes bailee for the buyer and the buyer acquires constructive possession of the goods. In particular, it is well established that the transfer by the seller to the buyer of a "warrant" or "receipt" issued by the warehouse operator in respect of the goods does not in itself effect delivery, even if that document promises delivery to the seller's order or to his assigns. Thus in Farina v Home (1846) 16 M. & W. 119, a wharfinger had handed a warrant to the plaintiff's shipping agent, making the goods deliverable to the agent or his assigns by indorsement. The warrant was thereafter being indorsed by the agent and delivered to the defendant. Parke B held that this did not constitute delivery of the goods:
"Mr Prentice insisted that there was no sufficient evidence of the actual receipt of the goods, that is, the delivery of the possession of the goods on behalf of the vendor to the vendee, and the receipt of the possession by the vendee; and that the delivery and receipt of the warrant was not in effect the same thing as the delivery and receipt of the goods; and we are all of that opinion. This warrant is no more than an engagement by the wharfinger to deliver to the consignee, or any one he may appoint; and the wharfinger holds the goods as the agent of the consignor (who is the vendor's agent), and his possession is that of the consignee, until an assignment has taken place, and the wharfinger has attorned, so to speak, to the assignee, and agreed with him to hold for him. Then, and not till then, the wharfinger is the agent or bailee of the assignee, and his possession that of the assignee, and then only is there a constructive delivery to him. In the meantime, the warrant, and the indorsement of the warrant, is nothing more than an offer to hold the goods as the warehouseman of the assignee."
"The giving by the owner of goods of a delivery order to the warehouseman does not, unless some positive act be done under it, operate as a constructive delivery of the goods to which it relates: McEwan v Smith. And the delivery of a warrant such as those delivered to the respondent in the present case is, in the ordinary case, according to Parke B, no more than an acknowledgement by the warehouseman that the goods are deliverable to the person named therein or to any one he may appoint. The warehouseman holds the goods as the agent of the owner until he has attorned in some way to this person, and agreed to hold the goods for him; then, and not till then, does the warehouseman become a bailee for the latter; and then, and not till then, is there a constructive delivery of the goods. The delivery and receipt of the warrant does not per se amount to a delivery and receipt of the goods: Farina v Home ; Bentall v Burn .
This statement of the law in Farina v Home is supported by many authorities, and, as I understand, was not questioned on behalf of the respondent in the present case."
G.3 A warehouse receipt is not a document of title
"(4) The expression "document of title" shall include any bill of lading, dock warrant, warehouse-keeper's certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented"
"9. Lead is regularly traded on the LME which operates a warrant system that is described in detail by the judge in para 14 and following of his judgment [2002] 2 All ER (Comm) 705, 712. The lead is deposited by producers in LME approved warehouses in lots of 25 metric tons, each of which is individually identified and made the subject of a single warrant. The lead is traded by buying and selling the warrants, which are effectively documents of title. Physical delivery can only be obtained from the warehouse against presentation of the relevant warrant."
"54. Warehouse receipts are common instruments in trade and finance, and may contain, or evidence, a contract between the warehouse and the party on whose behalf the goods are stored. …
55. A warehouse receipt represents goods in the possession of a warehouse. The document gives a description of the goods, and is a receipt for the goods stored. At common law, warehouse receipts are not treated as negotiable documents of title (unlike bills of lading). However, though not in itself conferring possession of the goods on the holder, possession of a warehouse receipt in effect gives the holder the right to possession of the goods. The evidence in this case, for example, is that without receiving the receipt back, the warehouse will not release the goods. …"
G.4 The terms of the Warehouse Receipts in respect of PC4-PC5
"To the order of [Straits]
This is to certify that the undersigned has received the Goods (as defined) for storage in apparent good order and condition, except as noted below, subject to the Remarks/Notes.
…
Remarks/Notes:
- Fees and Charges per agreement in writing (if applicable) or quotation issues by Access World's entity.
- Location of Cargo – Refer to Attachment.
…
• Goods (as defined) are received, stored and released according to agreement in writing entered between the parties (if applicable) or prevailing Access World's Standard Terms & Conditions www.accessworld.com
• This Warehouse Receipt is only valid when duly/legibly completed, endorsed and signed. All rights in connection therewith shall not be transferred or in any way disposed without having been endorsed, signed and dated by the order party / transferee.
• Delivery will be made upon presentation of the duly completed/endorsed ORIGINAL Warehouse Receipt in the office of the undersigned Access World's entity.
• Beneficiary/Transferee of this Warehouse Receipt will be deemed to have responsibility to pay all outstanding invoices in connection with services rendered by the undersigned Access World entity.
…
Upon transfer of this warehouse receipt, kindly ensure that the warehouse receipt is duly endorsed, signed and dated by the order party (transferor). Your endorsement shall follow the below sequence of boxes."
There then followed the attachment thereto entitled "Warehouse Receipt Details" which set out in table form the lot numbers, warehouse, brand, origin, product, quantity, gross and net weights and rent start date.
G.5 The effect of any original warehouse receipts – the alleged unilateral contract
(1) The second bullet point contemplates the transfer of the receipt by endorsement, signature and dating: "This Warehouse Receipt is only valid when duly/legibly completed, endorsed, signed and dated by the order party / transferee." It is true that it is contemplated that the warehouse receipt will only be valid if it is duly/legibly completed and signed and dated by the order party (Straits). It also contemplates the possibility that the warehouse receipt may be endorsed, but this tells one nothing about the consequences of the same. It is right that the second sentence provides that "all rights in connection therewith" "shall not be transferred" without having been "endorsed, signed and dated by the order party / transferee" but this says nothing about how or when rights are transferred (in fact by attornment on presentation of a genuine warehouse receipt).
(2) It is said that the third bullet point uses mandatory language ("Delivery will be made") upon presentation of the duly completed/endorsed "ORIGINAL warehouse receipt" (which it is now accepted by Marex is a reference to, and is limited to a reference to, the genuine Access World warehouse receipt) – but this does not occur on endorsement, but upon presentation, authentication and attornment.
(3) The fifth bullet point provides that the "Beneficiary/Transferee of this Warehouse Receipt will be deemed to have accepted responsibility to pay all outstanding invoices in connection with services rendered by the undersigned Access World's entity". Marex argues that this means that any transferee who accepts the endorsement and transfer of the receipt in his favour is taken by such conduct to accept responsibility to pay AW's outstanding invoices. However, it is not the acceptance of an endorsement or possession of the warehouse receipt that renders the endorsee liable to pay the storage charges – it is the offer by the endorsee (made by presentation of a genuine duly endorsed warehouse receipt) to the warehouse, which is then accepted by the warehouse, at the time of presentation and authentication, that renders the endorsee liable to pay storage charges. A warehouse receipt is not a document of title. There is no relationship between an endorsee and the warehouse, until presentation and attornment.
(4) Marex refers to the opening sentence on the reverse page as contemplating the "transfer of this warehouse receipt" by means of endorsement, signature and dating as set out in the sequence of six boxes. However, this does not assist Marex's argument. Once again, the words contemplate the possibility of the transfer of the warehouse receipt, and the provision makes clear that it should be ensured that the warehouse receipt is duly endorsed, signed and dated. This tells one nothing about the consequences of the same, or the timing when this becomes relevant (i.e. upon presentation to Access World and attornment).
"Thus, whilst in the absence of proof of a mercantile custom, a warehouse receipt in the form of the AW warehouse receipts may not be characterised as a negotiable document of title at common law (in the strict sense) and may not directly operate to transfer to a new holder the right to constructive possession of (or title to) the goods, by the terms of the receipt and the process of endorsement and transfer as described in the receipt, any new endorsee or transferee of the receipt can by its conduct in accepting endorsement and transfer in its favour thereby accept AW's standing promise to deliver as set out in the third bullet point and thereby acquire the contractual right to call on AW to make delivery of the goods in accordance with that promise."
(emphasis added)
G.6 The Warranty claim
G.6.1 General principles re: a "warranty" claim
"Undertakings may be given that are collateral to another contract. They may be considered to be independent of that other contract either because they cannot fairly be regarded as having been incorporated therein, or because rules of evidence hinder their incorporation, or because the main contract is defective in some way or is subject to certain requirements of form or is made between parties other than those by or to whom the undertaking is given. Such undertakings are often referred to as collateral contracts, or "collateral warranties".
"…If this is right, then it would seem to me to follow that any representation, whether made innocently, negligently or fraudulently, which is intended to be acted on and which is acted on creates a contractual relationship. I do not think that this can be right."
"show a warranty, i.e. a contract collateral to the main contract to take the shares, whereby the defendants in consideration of the plaintiff taking the shares, promised that the company itself was a rubber company."
"must be proved strictly. Not only the terms of such contracts but the existence of an animus contrahendi on the part of all the parties to them must be clearly shown."
and said at p. 51:
"In the present case the statement was made in answer to an inquiry for information. There is nothing which can by any possibility be taken as evidence of an intention on the part of either or both of the parties that there should be a contractual liability in respect of the accuracy of the statement."
Lord Haldane L.C. who agreed with these observations, said at p. 38:
"Considerable confusion has arisen from failure to keep in view the simple principle … enunciated by Holt C.J. that an affirmation can only be a warranty provided it appear on evidence to have been so intended."
Although in this case that alleged warranty was not given at the time of the making of the main contract and so was not collateral to that contract, it still is essential to justify the conclusion that a legally binding contract has been made, to show clearly that each party had an animus contrahendi . In the present case I can find nothing which can by any possibility be taken as evidence that Mr Robson when he wrote his letter on the October 20, or thereafter had any intention of entering into a contract or that Mr Mears when he gave the assurance had any intention of undertaking a contractual obligation.
I would therefore reject the claim for damages based on the alleged breach of warranty…"
G.6.2 The Authentication Emails
"Based on the warehouse receipts that we have received from the courier today, we have authenticated to be issued by us. The 13 sets of warehouse receipts we have authenticated as below".
"Delivery will be made upon presentation of the duly completed/endorsed ORIGINAL Warehouse Receipt in the office of the undersigned Access World entity"
"Based on the warehouse receipts that we have received from the courier today, we have authenticated to be issued by us. The 2 sets of warehouse receipts which we have authenticated as below."
G.6.3 The PMA Letters
"We hereby confirm that, upon receiving the original warehouse receipt duly endorsed, signed and dated by the order party, and subject to payment of our warehousing fees, we will release the goods to the endorsee without further written instructions from the order party.
We hereby disclaim and shall not be responsible for any liability, losses, damages, costs or expenses that you or any third party may incur arising from the release of the goods to the endorsee without further written instructions from the order party."
(emphasis added)
"89. In advance of each transaction, Marex provided Natixis with a letter on Access World headed paper and signed by Access World authorised signatories which included details of the relevant warehouse receipt numbers for this particular transaction, and contained confirmations… From my perspective, I did not pay much attention to these letters. Indeed, the wording in the letters mirrored that of the warranty provided in Access World's warehouse receipts. I did not therefore really understand what their purpose was.
G.6.4 Conclusions on any contractual claims and consequences thereof
(1) Any contractual obligation would only have related to an original (that is genuine) warehouse receipt.
(2) Any contract could not have transferred title to the metal.
(3) There would have been no possibility of an obligation on Access World's part to delivery up the metal in such circumstances (and in any event delivery up would have been impossible at this time due to the rights of the true owners of the metal). For the avoidance of doubt by reason of the description of the metal in each warehouse receipt the metal is that actual metal, and delivery of similar metal with similar characteristics could not be substituted (nor, in fact, was that Marex's pleaded relief).
(4) Any claim in damages would (as Marex and Natixis accepted) have been subject to Access World's standard terms and conditions (the issues thereby raised are addressed when considering any tortious liability of Access World below).
G.7 Estoppel
"…it seems to me that an estoppel gives no title to that which is the subject-matter of estoppel. The estoppel assumes that the reality is contrary to that which the person is estopped from denying, and the estoppel has no effect at all upon the reality of the circumstances… I am speaking now of the estoppels which arise upon transactions in business or in daily life, and, as it seems to me, these estoppels have no effect on the reality of the transaction. It may be that under some circumstances an estoppel will prevent a person from dealing in a particular manner with goods; for instance, if a person is estopped from denying that he has made a contract to deliver goods, and if the goods are still in his possession, in a suit to enforce performance of the alleged contract he may be obliged to hand over the goods, although, in fact, there was no contract, and he may be liable to act as if there had been a contract, and to fulfil his supposed obligation. But suppose that although a person is estopped from denying that he has made a contract to deliver goods, he has parted with the goods and has sold them to somebody else: it seems to me that although he may be estopped as against the person claiming delivery under the supposed contract, he cannot be compelled to deliver the goods, which, there being no contract, have legally passed to somebody else: owing to the estoppel he cannot deny that a contract was entered into, but he cannot fulfil it by delivering another person's goods; and therefore the only remedy against him is that he shall pay damages for not delivering the goods. In a similar manner a person may be estopped from denying that certain goods belong to another; he may be compelled by a suit in the nature of an action of trover to deliver them up, if he has them in his possession and under his control; but if the goods, in respect of which he has estopped himself, really belong to somebody else, it seems impossible to suppose that by any process of law he can be compelled to deliver over another's goods to the person in whose favour the estoppel exists against him: that person is entitled to maintain a suit in the nature of an action of trover against him; but that person cannot recover the goods, because no property has really passed to him, he can recover only damages. In my view estoppel has no effect upon the real nature of the transaction: it only creates a cause of action between the person in whose favour the estoppel exists and the person who is estopped."
(emphasis added)
"The legal requirements of an estoppel by representation of fact are well known: (i) a representation which is in law deemed a representation of fact, (ii) that the precise representation was in fact made, (iii) that the later position taken contradicts in substance the original representation, (iv) that the original representation was of a nature to induce and was made with the intention and result of inducing the party raising the estoppel to alter his position on the faith of it and to his detriment, and (v) that the original representation was made by the party sought to be estopped and was made to the party setting up the estoppels (see for example Spencer Bower, The Law Relating to Estoppel by Representation (4th edn, 2004) at paragraph 1.2.3). The representation must be clear or unequivocal, or precise and unambiguous (see Chitty on Contracts (31st edn) at paragraph 3-090)."
H. Negligence and Negligent Misstatement
H.1 Applicable Principles
"6. The decision of the House of Lords in Hedley Byrne & Co Ltd v Heller & Partners Ltd was a landmark in the development of the law of tort. Contrary to the ordinary rule as it had previously been understood, it allowed the recovery of a purely economic loss in negligence where the existence of a special relationship between claimant and defendant made this appropriate. The facts were that Hedley Byrne asked its bank, National Provincial Bank, to obtain a credit reference for a company wishing to place advertising contracts through it. The company's bank, Heller & Partners, supplied the reference to National Provincial. The Appellate Committee inferred as a matter of fact that Heller & Partners must have appreciated that National Provincial was not acting for its own account but wanted the reference for a client intending to do business with Heller's client, even though they did not know who that client was: see, in particular, pp 482 (Lord Reid), 493-494 (Lord Morris of Borth-y-Gest), 530 (Lord Devlin). The ratio of the decision was that the reasonable reliance of Hedley Byrne on the reference, combined with Heller & Partners' appreciation of the fact that they would reasonably rely on it, gave rise to a direct relationship between them involving a duty of care."
"I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."
"The respondents in this case cannot deny that they were performing a service. Their sheet anchor is that they were performing it gratuitously and therefore no liability for its performance can arise. My Lords, in my opinion this is not the law. A promise given without consideration to perform a service cannot be enforced as a contract by the promisee; but if the service is in fact performed and done negligently, the promisee can recover in an action in tort.
…
I think, therefore, that there is ample authority to justify your Lordships in saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton v. Lord Ashburton [1914] AC 932 , 972 are 'equivalent to contract,' that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation, there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and between those which are of a contractual character and those which are not. It may often be material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form. The service that a bank performs in giving a reference is not done simply out of a desire to assist commerce. It would discourage the customers of the bank if their deals fell through because the bank had refused to testify to their credit when it was good."
"recovery of purely economic loss in negligence was available where the relationship between the claimant and the defendant made it appropriate; that where there was reasonable reliance by the claimant on the particular representation combined with appreciation by the defendant of that reliance, a direct relationship arose between them involving a duty of care; but that it was the responsibility, voluntarily accepted by the defendant, towards those who acted on the representation, based either on a general relationship, or specifically in relation to a particular transaction, which created such a duty; that it was fundamental that the defendant assumed responsibility to an identifiable person or group of persons, but not to an indeterminate group or to the world at large; that the foundation of the duty was proximity so that the defendant, in giving the particular information or advice, was fully aware of the nature of the transaction in question and knew that it would be communicated to the claimant and acted on by him; that the claimant would reasonably suppose that he was entitled to rely on it for the purpose for which he had sought it; that the defendant's knowledge of the transaction was potentially relevant for the purpose, in particular, of identifying those to whom he assumed responsibility; that ordinarily where a statement was relied on by B to whom A passed it on, the representor owed no duty to B unless he knew that it was likely to be communicated to and relied on by B, and it had to be part of the statement's known purpose that it should be communicated to and relied on by B if the representor were to be taken to assume responsibility to B; that the present case was no different because the first claimant was the undisclosed principal of the third claimant; that the relationship of the bank and the first claimant was not "equivalent to contract" under the rule that an undisclosed principal might declare itself and assume the benefit of the contract and it bore no correlation to the concepts of proximity and voluntary assumption of responsibility which were critical features of the duty of care; that the law relating to undisclosed principals was in the main entirely inapposite to the law of tort; and that, accordingly, since there was no evidence that the bank had known that its reference would be communicated to or relied on by anyone other than the third claimant or had had reason to suppose that the third claimant was acting for someone else, and since it had known nothing of the first claimant so that it was plain that it had not voluntarily assumed any responsibility to it, the bank had not owed the duty of care."
"19. What is noteworthy for present purposes is the emphasis given in the decision in the Hedley Byrne case to the need for the representee reasonably to have relied on the representation and for the representor reasonably to have foreseen that he would do so. This is expressly stressed in the speech of Lord Hodson at p 514. In fact it lies at the heart of the whole decision: in the light of the disclaimer, how could it have been reasonable for the appellant to rely on the representation? If it is not reasonable for a representee to have relied on a representation and for the representor to have foreseen that he would do so, it is difficult to imagine that the latter will have assumed responsibility for it. If it is not reasonable for a representee to have relied on a representation, it may often follow that it is not reasonable for the representor to have foreseen that he would do so. But the two inquiries remain distinct."
"8. In Caparo Industries plc v Dickman [1990] 2 AC 605, the Appellate Committee held that foreseeability, although it was a necessary condition for liability, was not necessarily a sufficient one. The foundation of the duty is proximity, which may require more than the mere foreseeability of reliance. The problem before the Appellate Committee was to identify the outer limits of the class of persons whose reliance on a statement could properly be said to give rise to a sufficiently proximate relationship. They found the relevant limiting factors in the defendants' knowledge of (i) the person known to be likely to rely on the statement, and (ii) the transaction in respect of which he was known to be likely to rely on. After reviewing the authorities supporting a duty of care for negligent statements, both before and after Hedley Byrne, Lord Bridge (with whom Lord Roskill, Lord Ackner and Lord Oliver agreed), summarised the position as follows at pp 620-621:
"The salient feature of all these cases is that the defendant giving advice or information was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew that the advice or information would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice or information in deciding whether or not to engage in the transaction in contemplation. In these circumstances the defendant could clearly be expected, subject always to the effect of any disclaimer of responsibility, specifically to anticipate that the plaintiff would rely on the advice or information given by the defendant for the very purpose for which he did in the event rely on it. So also the plaintiff, subject again to the effect of any disclaimer, would in that situation reasonably suppose that he was entitled to rely on the advice or information communicated to him for the very purpose for which he required it. The situation is entirely different where a statement is put into more or less general circulation and may foreseeably be relied on by strangers to the maker of the statement for any one of a variety of different purposes which the maker of the statement has no specific reason to anticipate. To hold the maker of the statement to be under a duty of care in respect of the accuracy of the statement to all and sundry for any purpose for which they may choose to rely on it is not only to subject him, in the classic words of Cardozo CJ to 'liability in an indeterminate amount for an indeterminate time to an indeterminate class:' see Ultramares Corpn v Touche (1931) 174 N.E. 441 , 444; it is also to confer on the world at large a quite unwarranted entitlement to appropriate for their own purposes the benefit of the expert knowledge or professional expertise attributed to the maker of the statement. Hence, looking only at the circumstances of these decided cases where a duty of care in respect of negligent statements has been held to exist, I should expect to find that the 'limit or control mechanism … imposed upon the liability of a wrongdoer towards those who have suffered economic damage in consequence of his negligence' rested in the necessity to prove, in this category of the tort of negligence, as an essential ingredient of the 'proximity' between the plaintiff and the defendant, that the defendant knew that his statement would be communicated to the plaintiff, either as an individual or as a member of an identifiable class, specifically in connection with a particular transaction or transactions of a particular kind (eg in a prospectus inviting investment) and that the plaintiff would be very likely to rely on it for the purpose of deciding whether or not to enter upon that transaction or upon a transaction of that kind."
(emphasis added)
"(1) the advice is required for a purpose, whether particularly specified or generally described, which is made known, either actually or inferentially, to the adviser at the time when the advice is given; (2) the adviser knows, either actually or inferentially, that his advice will be communicated to the advisee, either specifically or as a member of an ascertainable class, in order that it should be used by the advisee for that purpose; (3) it is known either actually or inferentially, that the advice so communicated is likely to be acted upon by the advisee for that purpose without independent inquiry, and (4) it is so acted upon by the advisee to his detriment."
"We are presently concerned with its significance for the first of these purposes, which will vary according to what is known about the person or group expected to rely on the statement. Thus in Hedley Byrne itself, the defendant understood that the statement would be relied on by the unidentified, but readily identifiable, client on whose behalf National Provincial Bank was known to be making the inquiry. It was enough that the proposed transaction was said to be an advertising contract for £8,000 to £9,000. It would probably have been enough even if the transaction had not been identified as an advertising contract but simply as some kind of business transaction. For Lord Morris, for example, it was enough that the person contemplated was "some one who was contemplating doing business with Easipower Ltd": see pp 493-494. In Caparo on the other hand, where the persons said to have been entitled to rely on the defendant's audit report were any potential bidder for the auditor's client, the absence of a specific transaction in the defendant's contemplation assumed decisive significance.
(emphasis added)
I will need to return to the passage highlighted above as it is of potential relevance to the claims made against Access World by Marex and Natixis, in particular that made by Natixis.
"I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise. "
"…it remains the case that a claimant is much more likely to be able to show that he is entitled to depend on a service or statement where the work is undertaken by a person who is exercising a special skill in a business context. This is particularly the case when the information being given relates to matters which are within the exclusive preserve of the defendant. Thus in Smith v Eric S Bush [[1990] 1 AC 831 at 865] Lord Griffiths commented: "the valuer is discharging the duties of a professional man… The essence of the case against him is that he as a professional man realised that the purchaser was relying on him to exercise proper skill and judgment in his profession"
"… the approach to be adopted as to what may in law amount to an assumption of risk. This point was elucidated in Henderson by Lord Goff of Chieveley. He observed, at p. 181B-C:
"… especially in a context concerned with a liability which may arise under a contract or in a situation 'equivalent to contract,' it must be expected that an objective test will be applied when asking the question whether, in a particular case, responsibility should be held to have been assumed by the defendant to the plaintiff:"
"The touchstone of liability is not the state of mind of the defendant. An objective test means that the primary focus must be on things said or done by the defendant or on his behalf in dealings with the plaintiff. Obviously, the impact of what a defendant says or does must be judged in the light of the relevant contextual scene. Subject to this qualification the primary focus must be on exchanges (in which term I include statements and conduct) which cross the line between the defendant and the plaintiff."
"76. As Lord Wilson JSC explains in his judgment, the requirement that there should be an assumption of responsibility is to some extent a legal construct in the sense that in many cases the defendant solicitor or other professional will be treated as having assumed responsibility to the third party for his actions by virtue of the proximity between them and the obvious effect which any failure on his part would have on the third party. There will rarely be an actual, conscious and voluntary assumption of responsibility not least because the solicitor or other professional will have a client to whom he is contractually bound. But, on the basis that the court is deciding whether to treat the defendant as having assumed legal responsibility to the third party, non-client, for his actions, it will be necessary to balance the foreseeability that the third party will rely on the professional to perform their task in a competent manner against any other factors which would make such an imposition of liability unreasonable or unfair."
"The first is whether the defendant assumed responsibility for what he said and did vis-à-vis the claimant, or is to be treated by the law as having done so. The second is commonly known as the threefold test [in Caparo Industries plc v Dickman [1990] 2 AC 605 ]: whether loss to the claimant was a reasonably foreseeable consequence of what the defendant did or failed to do; whether the relationship between the parties was one of sufficient proximity; and whether in all the circumstances it is fair, just and reasonable to impose a duty of care on the defendant towards the claimant (what Kirby J in Perre v Apand Pty Ltd (1999) 198 CLR 180 , para 259, succinctly labelled "policy"). Third is the incremental test, based on the observation of Brennan J in Sutherland Shire Council v Heyman (1985) 157 CLR 424 , 481, approved by Lord Bridge of Harwich in Caparo Industries plc v Dickman [1990] 2 AC 605 , 618, that:
" "It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable 'considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed"."
"… the outcomes (or majority outcomes) of the leading cases cited above are in every or almost every instance sensible and just, irrespective of the test applied to achieve that outcome. This is not to disparage the value of and need for a test of liability in tortious negligence, which any law of tort must propound if it is not to become a morass of single instances. But it does in my opinion concentrate attention on the detailed circumstances of the particular case and the particular relationship between the parties in the context of their legal and factual situation as a whole."
"62. It is clear that parts of the threefold test and the assumption of responsibility test overlap: Chandler v Cape plc [2012] EWCA Civ 525, [2012] 1 WLR 3111, at paragraph 62 (Arden LJ). The different tests usually lead to the same answer and can be used as cross-checks on each other: Playboy Club London Ltd v Banca Nazionale del Lavoro SpA [2016] EWCA Civ 457, [2016] 1 WLR 3169, at paragraph 17. They are complementary and should not be considered in isolation from each other: CGL Group Ltd v Royal Bank of Scotland plc [2017] EWCA Civ 1073, [2017] CTLC 97; cf Robinson v Chief Constable of West Yorkshire Police [2018] UKSC 4 "
"63. The Hedley Byrne common law duty of care not to misstate is, then, merely one example of a more general principle that a defendant's assumption of responsibility may give rise to a duty of care – giving rise to pure economic loss - either in relation to a particular transaction or a continuing relationship, the existence of the duty and its extent being dependent on the particular facts.
H.2 The question of assumption of responsibility for the type of loss suffered
"It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless. 'The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it:' see Sutherland Shire Council v. Heyman, 60 A.L.R. 1 , 48, per Brennan J. Assuming for the purpose of the argument that the relationship between the auditor of a company and individual shareholders is of sufficient proximity to give rise to a duty of care, I do not understand how the scope of that duty can possibly extend beyond the protection of any individual shareholder from losses in the value of the shares which he holds. As a purchaser of additional shares in reliance on the auditor's report, he stands in no different position from any other investing member of the public to whom the auditor owes no duty."
(emphasis added)
"Even if Access World owed a duty to take reasonable care in authenticating the warehouse receipts, this duty would not be actionable because, assuming breach, it was not Access World's breach which led to Marex's loss but CHH's failure to pass title. Two points flow from this analysis: first, as the duty is not actionable it is not really a duty at all and secondly, it demonstrates that the question of duty is inextricably bound up with the issue of causation."
"52. It is accepted by Grant Thornton that an auditor may owe duties to third parties other than the members in general meeting, in certain circumstances, as other authorities make clear. In MAN Nutzfahrzeuge AG v Freightliner Ltd [2007] EWCA Civ 910, the Court of Appeal considered the question of the purpose for which any statement was made or report communicated. Chadwick LJ, with whom the other Lords Justices agreed, stated that there was no question of distinguishing between "the defendant's purpose" and "the claimant's purpose". The purpose for which a statement was made or communicated was to be judged objectively and the question was whether a reasonable person in the position of the claimant would conclude from the circumstances in which the statement was made or communicated to him that the purposes for which the statement was made or communicated to him included protecting him from a type of loss which he suffered in reliance on the statement (paragraphs 35 and 37)."
(emphasis added)
H.3 Did Access World assume a responsibility/owe a duty to Marex?
H.3.1 PC4 and PC5 receipts - "authentication"
"Based on the warehouse receipts that we have received from the courier today, we have authenticated to be issued by us.
The 13 sets of warehouse receipts which we have authenticated as below …" [The 13 PC4 receipts are then listed].
"I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."
(1) Access World held itself out as possessed of a special skill, namely, that it could identify whether warehouse receipts purportedly issued by it were authentic or not. This was within the "exclusive preserve" of Access World, not least because (as Access World has admitted) its warehouse receipts are known to contain security features confidential to it, which enable it, but no other party, authoritatively to authenticate a document as a genuine warehouse receipt issued by it.
(2) Access World agreed to apply that skill for the assistance and benefit of those to whom it offered authentication services, here Marex (I address the position of Natixis separately below). It is no doubt because of its unique ability to authenticate the warehouse receipts that it had issued that Access World offered authentication services to those who dealt in those receipts and wished to obtain the authentication of particular warehouse receipts by Access World. This was no doubt not simply altruistic on Access World's part – like the bank in Hedley Byrne there is a benefit to Access World, as a warehouse owner storing goods held under its warehouse receipts in providing such authentications.
(3) Access World was well aware that its statements as to authenticity would be relied upon by the party to whom it provided its statement as to authenticity – here Marex (I address the position in relation Natixis separately below), and for what purpose – namely in reliance on the fact that the warehouse receipts were genuine to enter into contracts to purchase and sell metal on the basis that it/its endorsee would be able to obtain delivery up of the metal from Access World against presentation of a genuine Access World warehouse receipt. Not only was it reasonably foreseeable, Access World knew that Marex would rely on the statement made by Access World as to the genuineness of a warehouse receipt and for what purpose.
H.3.2 PC1-PC3 receipts - "verification"
"Please find attached the copies of the warehouse receipts that I have been provided with by Come Harvest
Please confirm that these are copies of documents that you have issued
I note that they have an AW sticker and an orbit watermark. The signatures are also appear to be as per your signature list."
"In reply to your inquiry, we advise that based upon the photocopy document you provided and according to our records
[1] a Warehouse Receipt with cargo details arid Reference No, AWSG/KR/0027116 and AWSG/KR/0027117 dated 08/11/2016 had been issued by Access World (formerly known as Pacorini Metals).
[2] We however cannot confirm the authenticity and/or validity of the photocopy document until we are in possession of the original Warehouse Receipt and have verified same to our satisfaction.
[3] Any information given and/or statement made by us is for information purposes only without any engagement and/or liability on our part.
[4] We do not make any representation or assume responsibility for the validity and/or veracity of endorsements, if any."
(emphasis added)
"Information given and/or statement made by" as a matter of the ordinary and natural meaning of words encompasses both an express statement and any statement that might otherwise be implied (and equally if an express statement is excluded it would make no sense for the disclaimer not also to apply to any implied statement). Indeed, Mr Choo-Choy acknowledged as much stating as to the meaning of the words, "I quite accept that the language of "information given and/or statement by" is capable of applying to an implied representation". Equally in the light of that disclaimer I do not consider that Marex could have reasonably relied upon what was said – the disclaimer is making clear that there is no engagement or liability on Asset World's part, so Marex could not reasonably rely on what was said (Mr Nutt had no basis for his belief that Access World would "check the things they could" which he accepted was an assumption on his part, and was not based on any specific enquiry of Access World).
"In the past judges have tended to invoke the contra proferentem rule as a useful means of controlling unreasonable exclusion clauses. The modern view, however, is to recognise that commercial parties (which these were) are entitled to make their own bargains and that the task of the court is to interpret fairly the words they have used. The contra proferentem rule may still be useful to resolve cases of genuine ambiguity, but ought not to be taken as the starting point: see, for example, The Hut Group Ltd v Nobahar-Cookson [2016] EWCA Civ 128 and Transocean Drilling UK Ltd v Providence Resources plc [2016] 2 All ER (Comm) 606."
160. "The judge avoided this conclusion by approaching the disclaimer as if it were a contractual exclusion. On such an approach it would need to be strictly construed and the argument was available that it did not as such cover an oral statement. But that is not, in my judgment, the right approach. It is not an exclusion to be construed. The right approach, as is made clear in Hedley Byrne, is to treat the existence of the disclaimer as one of the facts relevant to answering the question whether there had been an assumption of responsibility by the defendants for the relevant statement. This question must be answered objectively by reference to what a reasonable person in the position of Mr McCullagh would have understood at the time that he finally relied upon the representation."
H.3.3 PC4 and PC5 receipts – Natixis
"11. Mr Salzedo QC, who appeared for the Playboy Club, accepted that there was no evidence that BNL knew that its reference would be communicated to or relied on by anyone other than Burlington. He also accepted that in the ordinary course where a statement is relied upon by B to whom A has passed it on, the representor owes no duty to B unless he knew that the statement was likely to be communicated to B. That concession was plainly justified. I would go further and say that the representor must not only know that the statement is likely to be communicated to and relied upon by B. It must also be part of the statement's known purpose that it should be communicated and relied upon by B, if the representor is to be taken to assume responsibility to B. Mr Salzedo's submission was that the present case was different because the Club was Burlington's undisclosed principal. He submitted that the relationship between BNL and the Club was, in Lord Devlin's phrase, "equivalent to contract" because in contract the Club would have been entitled to declare itself and assume the benefit of the contract. This is an ingenious argument, but in my opinion it is fallacious."
(emphasis added)
I. Was Access World negligent in relation to the authentication of PC4-5?
I.1 The applicable standard
I.2 Did Access World fail to exercise reasonable skill and care in its authentication of the PC4 and PC5 receipts as authentic warehouse receipts issued by Access World?
I.2.1 The 5 differences that Marex says were obvious
(1) Item 4;
(2) In the logo at the top left of the first page of the receipt, the shade of blue of the circle and the word 'ACCESS';
(3) In the logo at the top left of the first page of the receipt, the colour of the word 'WORLD' (which is grey in the forged receipts and grey-green in a genuine receipt);
(4) The colour of the footer on the first page, which is grey in the forged receipts but grey-green in a genuine receipt; and
(5) On the reverse/second page of the receipt, the colour of the pro-forma text and endorsements box. It appears in a paragraph of 4 lines of text (beginning: "Upon transfer of this warehouse receipt …") and the numbers 1 through 6 and the words "Endorsement", "Signature" and "Date" (and Chinese characters following each such word), as well as the 6 boxes in which these words appear. The colour of the pro-forma text and endorsements box is grey in the forged receipts but grey-green in a genuine receipt.
(1) Each of these differences is recorded by the experts as being visible to the naked eye (Handy para 29 (item 4), para 42 (logo, header, footer and pro-forma text on the reverse; Radley paras 67 and 138 (item 4), paras 75 and 142 (logo) and para 142 (footer)).
(2) When cross-examined, Mr. Png accepted that, in respect of the forged versions of the PC4 and PC5 receipts, if he had been comparing the forged versions with an original genuine warehouse receipt with pre-printing on it (that is, with the pre-printed AW logo and footer on the obverse and pro-forma text/endorsements box on the reverse), he would immediately have seen each of the above differences. In this regard it is not necessary (and Mr Png did not suggest that it was necessary) in order to identify these differences to compare the forged receipts with the actual original receipts. These differences are all in the pre-printed parts of a genuine Access World receipt (be that any genuine AW warehouse receipt - including a cancelled one, and any "blank" receipt (i.e., a pre-printed sheet of Access World warehouse receipt paper without details of any metal on it)), and in this regard (as Mr. Png acknowledged) a source of such paper would be the paper sitting in one of the trays of the Access World printer used for printing warehouse receipts. Of course, Mr Png would himself be very familiar with such paper in any event.
(3) In relation to the authentication exercise conducted by three other members of staff on 14 February 2017(Mr Frankie Tan, Ms Jenny Chen and Ms Rachel Ngo) they unanimously concluded that each of the 16 forged receipts (including the PC4 and PC5 receipts) (amongst other matters), failed Item 4 and failed in respect of the colour of the printing (the test referred to on the Checklists as "PRINTS/COLOR", with Mr Tan noting, in particular that the colour of the "AW logo" was different on the forged receipts compared to the genuine receipts).
(1) The experts bring their own expertise in relation to the exercise so it does not necessarily follow that an ordinary individual or an ordinary competent person exercising the particular art would make the same observation (although one might expect the latter person to have their own particular experience).
(2) The issue of negligence is not subjective and so ultimately what matters is not what Mr Png or other Access World employees would have noted but what an individual exercising the ordinary skill of an ordinary competent person exercising that particular art would have noted (though the evidence of Access World's witnesses may well reflect, or evidence, that).
(3) The Checklists were drawn up after the time of the authentication specifically to determine whether receipts were authentic (and so are drawn up for a specific purpose and are also not contemporaneous to the time of the earlier authentication).
(4) Hindsight must not be used when looking for differences.
(1) All such evidence speaks with one voice – those differences are apparent to all of the witnesses.
(2) Each of those differences is apparent to me (a person with no expertise in the matter) and I am satisfied would be apparent to anyone exercising any care. As Marex rightly submits they are obvious even upon cursory inspection and to the naked eye.
(3) I am satisfied that each such difference and all such differences would have been apparent, without the exercise of hindsight by anyone exercising the ordinary skill and care to be expected. In this regard the colour differences are the most obvious and are readily apparent, and I am satisfied would have been apparent contemporaneously and without any need for there to be a requirement to look for colour differences (though that would be an obvious point to look for in any event). As Access World points out it is, of course, very easy for a judge with the advantage of hindsight to identify some act on the party of an employee which would have avoided an accident occurring (see per Keene LJ in Cooper v Carillion Plc [2003] EWCA Civ 1811 at [13]), but this is not such a case – no hindsight is needed to look for or identify these differences.
(4) The noting of any of these differences would inevitably have set alarm bells ringing and would have alerted anyone inspecting the receipt to a need to inspect the receipt more carefully in order to exercise the ordinary skill of an ordinary competent person exercising the particular art. At which point any differences not spotted would also have been spotted. Indeed, other differences (for example as to signatures) even if not already noted (and I address this further below) would no doubt be considered (and would be likely to have been identified by an ordinary competent person).
(1) It is common ground that these were sophisticated and skilfully executed forgeries (Joint Memorandum paras 5, 17(a) and 18(b)).
(2) It was the first time that such sophisticated attempts at forgery had been made (see the points relied upon by Access World at paragraph 147 of their Written Closing).
(3) Fraud prevention is an exercise in "chasing the game".
(1) It takes, as it is entitled to take, a pleading point, submitting that Access World is confined to its pleaded case.
(2) It says that Marex adopts a fundamentally incorrect starting point and approach. What the Court should ask itself is "(a) did Mr Png properly perform the [authentication] process that he was instructed to perform and (b) to the extent that Marex is entitled to run its new case, what were the known or perceived types and levels of risks at the time and, in the light of those risks, what steps would be considered appropriate by the notional person identified in the Bolam test as adequate to guard against them."
(3) There is no evidence by which the Court can judge either the conduct of Mr Png or Access World and what a competent warehouse receipt inspector/issuer would or should have done in the circumstances pertaining at the time, or indeed whether and, if so, in what respects their conduct fell short, which is the result of Marex's failure to call any admissible expert evidence on these key issues despite the parties having permission to do so.
I.2.2 Marex's Case
"(4) Given that Access World's own position is that the Warehouse Receipts contain features which show that they are not genuine Access World warehouse receipts, Marex will say that, when authenticating …and/or verifying the very same…PC4 and PC5 Warehouse Receipts on …22 December 2016 and 9 January 2017 respectively, Access World:
(a) did not use all reasonable measures to ascertain whether the documents were genuine warehouse receipts issued by it; and/or
(b) did not take reasonable care in using the measures it did employ to that end.
(5) In particular, if (which is not admitted) the …PC4 and/or PC5 Warehouse Receipts contain features that now cause them to fail Access World's authentication tests then, had Access World exercised reasonable skill and care at the time of the original authentication, those features would have been detected and the transactions would not have proceeded. Marex will rely on (amongst other things) the February 2017 "Warehouse Receipt Authentication Checklists" disclosed by Access World (the "Checklists"). In this regard:
(a) In respect of the PC4 and PC5 Warehouse Receipts, Marex relies on the schedule summarising those Checklists that is set out in paragraph 56(2) of its Amended Reply, as if that schedule were set out in full herein. The scale and frequency with which each of the PC4 and PC5 Warehouse Receipts failed the tests described in those Checklists is such that a person exercising reasonable skill and care when inspecting those receipts in December 2016 and January 2017 would have concluded (i) that those receipts failed those tests; and (ii) accordingly that there were (at the very least) grounds for suspecting the warehouse receipts were not authentic; and (iii) therefore, that there was no proper basis for representing that those receipts are authentic."
(emphasis added)
"as already pleaded at paras 29(4) and 29(5) of its POAC, is that AW (as a company, not just Png individually) failed to take all reasonable measures to ascertain whether the receipts were genuine receipts, and failed to take reasonable care in using the measures that it did use; and that the reasonable measures (or tests) relied upon by Marex are all of the measures described in the Checklists, notwithstanding that the Checklists (as documents) may only have been prepared in February 2017. Our case is that the Checklists evidence what should reasonably have been done during the authentication exercise…"|
I.2.3 Access World's Procedure Manual and whether the same was complied with
"OBJECTIVE To verify the authenticity of Warehouse Receipts (WRC)
SCOPE The procedure covers the authentication of a WRC, the response to a WRC verification inquiry and the cancellation of the original WRC upon Presentation
DEFINITION A Verification inquiry is a request to confirm the existence of a WRC basis a copy whereas for a cancellation of the WRC the original document must be presented."
"Is the WRC printed on AW security paper with perforated 'Access World' logo at the top left and 'Access World' water mark logo across the address details in the footer"
(emphasis added)
(1) He accepted that verifying whether the receipt was "printed on AW security paper" (in the first bullet point) included him making sure that all the features of the pre-printed paper that was sitting in his tray (i.e. on the Access World pre-printed paper) was the same as the presented document.
(2) He would check that the AW logo in the letterhead was the same as the original, that the footer details were the same; as well as the endorsement pro forma language on the reverse page and whilst he initially denied that he was obliged to carry out specific checks of the colour (though I consider this would logically follow from his earlier answer in (1) above, and from the terms of the bullet point) he did clarify, when it was put to him that it would be wrong for him not to check this, that, "What I mean is I can recognise my own company logo with the dark Navy blue with the grey-green, Access World", that wordings, that I can recognise the colour. So by looking at it, I can satisfy myself that, yes, it is my company logo, and in fact indeed it is embossed and the watermark is there. So that's how I satisfy myself that it is a genuine Access World security paper" (emphasis added). It is clear, therefore, that he was familiar with the colour features of an original AW receipt and did take into account colour (including when verifying the logo) - under the first bullet point (and this was a particular difference/failing expressly noted by Mr Tan on the 14 February 14 authentication exercise). In any event, I am satisfied that Mr Png would have been aware of all the colour features, and that he ought to have taken into account such colour features, both for the purpose of discharging his responsibilities under the first bullet point, and more generally in exercising the ordinary skill and care of an ordinary competent person exercising the particular art (as addressed below Mr Png's evidence was also that the purpose of the exercise was to identify any visible suspicious features or discrepancies (which would clearly include colour discrepancies), and in this regard the terms of paragraphs 4.2 and 4.4 of the Procedure Manual are also of relevance (as addressed below)).
"4.2 The Account Holder shall further examine the original document for any alterations (example: Has a different font been used to change/add information, etc…). Any alterations must be initialled and authenticated by authorized AW signatories. Please alert the Customer Service Manager in the adverse case.
…
(a) The purpose of the exercise (as he understood it) was to identify any visible suspicious features or discrepancies between the document presented and AW's internal records;
(b) Whilst following the Procedure Manual, he would be seeking to use as much possible care as he could in the circumstances to try to ensure that he made a correct determination. He accepted he was required to discover any reasonably discoverable discrepancies or any obvious discrepancies or divergences;
(c) He appreciated that "suspicious observations" and/or "diverging information" (as mentioned in paragraph 4.4 of the Procedure Manual) might not be limited to the points identified in paragraphs 4.1 or 4.2. He said he would "do all my best to detect whatever is suspicious".
I.2.4 Signatures
"In paragraph 78, I explain that the authentication checks included a breakdown of the standard items to check based on the procedure, as set out in paragraphs 2 and 4 of the procedure manual (31 January 2017 version), the special test and two new tests. On reviewing the authentication checklist in detail, I realise I should have said that there were three new tests in the checklist in addition to the special test. The test in the checklist named "Signature: signatures consistent with scanned PDF record' was not included in the original manual (2016 version) or the 31 January 2017 version and therefore was a new check. I would have expected one of my team, when carrying out an authentication check in November 2016 to January 2017, to perform a quick check to ensure (1) the person that signed the warehouse receipt being authenticated was authorised to do so and (2) the same names appeared on both the document being checked and the copy document in Access World's records. This was because paragraph 4.5 of the 2017 manual and 4.4 of the 2016 manual required any suspicious observations or diverging information to be reported to the Customer Services Manager. However, I did not consider at that time (and still do not consider) that the procedure manual dated 31 January 2017 or the 2016 version required a detailed check on the signatures and I did not require and do not believe that a detailed check on the signatures was performed by Access World employees authenticating warehouse receipts between November 2016 and January 2017."
(emphasis added)
Q. Now, I just want to clarify: in February 2017, what, if
anything, did you understand that somebody carrying out
an authentication before January 2017 was required to do
in the context of the signatures on warehouse receipts?
A. For the February authentication checklist under the signature part, we are referring to a very – or a much more detailed check to look for signatures, as in whether the curvature of the signature is consistent, how the signature handwriting intersection with the
surrounding correctors or fonts, whether they are
consistent with the scanned copy. That is my
understanding.
Q. So you said that for the February authentication
checklist under the signature part we are referring to
a much more detailed check to look at the signatures?
A. That's correct.
(emphasis added)
Here Mr Sim is recognising that there was a check of signatures pre the Authentication Checklist in February 2017 (albeit he said not a detailed one).
I.2.5 The Other Tests
I.2.5.1 The Special Test
I.2.5.2 The Other Feature
I.2.6 Conclusion re: negligence
J. Causation and Contributory Negligence
J.1 Applicable principles
"Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage"
"Fault" is defined in section 4 as meaning:
"negligence, breach of statutory duty or other act or omission which gives rise to a liability in tort or would, apart from this Act, give rise to the defence of contributory negligence"
"…it would only be a case in which, … it could be seen that the whole of the responsibility for the damage was the defendants' failure to protect the claimants' against their own negligence, that it would be appropriate to hold that the claimant was not guilty of contributory negligence. As was stressed by Lord Hobhouse and Lord Millett in Platform Home Loans v Oyston [2002] 2 AC 190 at pages 211 and 214 respectively, a reduction for contributory negligence should only be applied to damage for which the claimants are partly responsible. See also Rahman v Arearose [2001] QB 351 , where Laws LJ said at page 367 that "the real question is what is the damage in question should be held responsible " (Laws LJ's italics). We accept the submission that that approach is also relevant to contributory negligence.
"Section 1(1) does not specify how responsibility is to be apportioned, beyond requiring the damages to be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage (not, it is to be noted, responsibility for the accident). Further guidance can however be found in the decided cases. In particular, in Stapley v Gypsum Mines Ltd [1953] AC 663, 682, Lord Reid stated:
'A court must deal broadly with the problem of apportionment and in considering what is just and equitable must have regard to the blameworthiness of each party, but 'the claimant's share in the responsibility for the damage' cannot, I think, be assessed without considering the relative importance of his acts in causing the damage apart from his blameworthiness.'"
…
The problem is not merely that the factors which the court is required to consider are incapable of precise measurement. More fundamentally, the blameworthiness of the pursuer and the defender are incommensurable. The defender has acted in breach of a duty (not necessarily a duty of care) which was owed to the pursuer; the pursuer, on the other hand, has acted with a want of regard for her own interests. The word 'fault' in section 1(1), as applied to 'the person suffering the damage' on the one hand, and the 'other person or persons' on the other hand, is therefore being used in two different senses. The court is not comparing like with like."
"It is only in rare cases that a solicitor is able to advance a plea of contributory negligence with any real prospect of success, and for obvious reasons. That is because his breach of duty will usually be in relation to a matter within his special expertise as a solicitor, being a duty which is not usually one relating to a purely commercial matter of judgment falling squarely within the client's own competence. It will usually relate to a matter upon which the client is depending upon the solicitor's special expertise".
"The present case is, however, different in kind. Assuming, as I must, that Mr Alderson had a duty to advise or prompt the FLL to consider the question of bidder solvency and parent company guarantees, this was, I find, a matter which was still primarily one for the FLL to consider and assess for itself without any need for such advice or prompting. I have found that it concluded that ONdigital was a sufficiently strong counterparty that it could deal with it alone. The consequence of any advice or prompting by Mr Alderson would, so I have also found, have been that the Committee would have re-considered the assessment it had itself made and have decided, as a matter of caution, to ask for guarantees that it had itself tacitly concluded were unnecessary. Whilst it can therefore be said that Mr Alderson's breach of duty caused loss to the FLL, the FLL also made its own commercial decision on the same matter, being a decision which, with hindsight, it now regrets.
I see no good reason why, in these circumstances, the FLL should not be regarded as contributing to its own loss. I find that it was guilty of contributory negligence since I consider that the relevant issue was one that was primarily for it to decide upon for itself rather than for Mr Alderson to prompt it to consider. I regard the FLL's contribution as substantial. I assess it at 75%."
J.2 Discussion and application of the principles
K. Access World's Terms and Conditions
K.1 The Terms and Conditions
"These Standard Terms and Conditions (hereinafter referred to as "Conditions"), electronically published at http://www.accessworld.com, as amended, set out the general standard terms on which any company or subsidiary belonging to the Access World Group of companies performs any Services. In addition to these Conditions, certain sectoral terms and conditions, as detailed in Appendix 1, subject to Section 4 of these Conditions, apply with respect to Services rendered by Access World (Vlissingen) B.V., Access World (Rotterdam) B.V., Access World Terminals B.V., Access World (Italia) Sri., and any subsidiary belonging to Access World (RF) (Pty) Ltd…"
(emphasis added)
"In these Conditions, the following words and expressions shall have the following meanings, save where the context otherwise requires:
"Agreement" means any agreement, whereby the Company and/or an authorized agent of the Company offers and the Customer accepts the provision of the Services, or where the Company has started performance of an order, and shall include without limitation any written contract agreed and/or correspondence by post, fax and/or email between the Company and/or an authorized agent of the Company and the Customer, and these Conditions;
"Company" means the Access World entity that has concluded the Agreement;
"Customer" means the party to whom the Company's offer is addressed and/or the party entering into the Agreement with the Company, and/or the party to whom the Company shall provide the Services pursuant to the Agreement;
"Goods" mean any goods handled, transported, stored or otherwise dealt with by or on behalf of or at the instance of the Company, or which come under control of the Company or its agents, servants or nominees on the instructions of the Customer, and includes any container, transportable tank, flat pallet, flat rack, package or any other form of conveyance, covering, packaging, container or equipment used in connection with or in relation to such goods;
"Group" means the Company and the related companies of the Company collectively;
"in writing" shall mean any written correspondence sent by post, fax, or email between the Company and/or its authorized agents and the Customer;
"Loss" includes (without limitation) loss (including theft), destruction, damage, unavailability, contamination, deterioration, delay, non-delivery, mis-delivery, unauthorized delivery, non-compliance with instructions or obligations, or incorrect advice or information;
"Order" means the Customer's request for Services using its own format;
"Price" means the rates which shall be chargeable by the Company to the Customer for the provision of the Services as set forth in the Agreement;
and
"Services" shall mean any and all services provided or to be provided by the Company to the Customer pursuant to the Agreement."
"3.1 Unless otherwise agreed in writing, these Conditions apply to all offers made by the Company and/or its authorized agents, all business relations between the Company and/or its authorized agents, and any Agreement concluded.
3.2 The Company shall not be bound by any conflicting standard terms and conditions (howsoever called) used by the Customer and such terms and conditions shall not be applicable to the Agreement unless the terms and conditions have been accepted in writing by the Company. These Conditions may only be varied in writing by an authorized representative of the Company. If a Customer's acceptance document, purchase Order or other documentation, received by the Company before or after notification of these Conditions, contains terms at variance with these Conditions, then every such terms shall be of no effect.
3.3 Failure of the Company to invoke or enforce compliance with any provisions of the Conditions shall not constitute a waiver by the Company of its right to insist upon strict compliance with all other provisions of the Conditions or invoke the respective provision in other circumstances.
3.4 If any of the terms of these Conditions is repugnant to or in conflict with applicable law, then and in such event the conflicting term shall be deemed to be deleted, amended and/or altered to conform therewith, and such deletion, amendment and/or alteration shall not in any way affect the remaining provisions of these Conditions."
"10.1 Where an Agreement is subject to sectoral terms and conditions under Section 4 (Applicability of Sectoral Terms and Conditions and Jurisdiction Specific Legislation), and where liability is specifically addressed in the sectoral terms and conditions, the Company's liability shall be determined by the applicable sectoral terms and conditions. However, in cases where the sectoral terms and conditions do not specifically determine such liability, the following provisions shall apply.
…
or for any purposes connected with their transportation); or
10.5.4 EUR 100,000 (or equivalent amount in the local currency of the country in which the Company that is party to the Agreement is domiciled) per event, or series of events arising from one and the same cause."
K.2 The Applicability of the Terms and Conditions
"(c) "No liability whatsoever is accepted as to any errors, omissions or misstatements contained herein,…"
"(d) "neither the bank not any officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this presentation for any purpose…"
"21. Paragraphs (c) and (d) of the disclaimer differ from paragraphs (b) and (e) in that they purport to exclude liability for any misstatement rather than qualify the scope or nature of the statements which the document contains. In other words, they are liability-negating clauses rather than duty-negating clauses. The judge was content to proceed on the assumption that they could be effective, despite the fact that they too did not form part of any relevant contract between Roskilde and Taberna, and held that they satisfied the requirement of reasonableness. None the less, he held that the words used were insufficiently clear to exclude liability for damages for misrepresentation.
"Since it is common ground that there was no contract between Roskilde and Taberna which incorporated the disclaimer, it must be effective, if it is to be effective at all, simply as a notice to the reader of the document that Roskilde is unwilling to accept liability for its contents. Mr. Lord submitted that, since it was tucked away at the back of the document in fairly small print, the court could not be satisfied that the reasonable reader would have seen it and taken it in. I cannot accept that. The document was intended to be read by experienced professional investors, such as Taberna, who must be taken to be well aware that it is necessary to read a document of this kind in its entirety. Nor, for much the same reasons, can I accept that the disclaimer could reasonably be understood as relating only to those parts of the document which contained forecasts or estimates. In my view, read fairly as a whole, it contained a clear message: fraud apart, Roskilde was not willing to accept any
liability for the accuracy of the document's contents."
"In Hedley Byrne the defendants expressly disclaimed any responsibility on their part. All of their Lordships were agreed the defendants were not liable. Lord Morris maintained that the claimant could not accept a reply given with a stipulation and then reject the stipulation. The reason is found in the principle of notice. The defendant must give reasonable notice of the disclaimer, but does not have to show that the claimant actually knew about it and voluntarily assumed the risk of harm. However, the impact of a disclaimer in this context is subject to the provisions of the Unfair Contract Terms Act 1977 or the Consumer Rights Act 2015. The latter now applies in "consumer" cases, as defined, and the former continues to apply in other cases."
(emphasis added)
"84. That leaves Mr Christie QC's final submission that, because Hall Fire were seeking to avoid their core obligation of providing a proper fire suppression system, clause 11 should be regarded as unreasonable. In making that submission, Mr Christie QC relied heavily on the judgment of Christopher Clarke J in Balmoral v Borealis, and also on Charlotte Thirty.
"The legal relationship between the Access World entity indicated on the front of the warrant (the "Warehouse") and the warrant holder is subject in all respects to the rules and regulations set out by the London Metal Exchange (the "LME"), applicable local law and regulations of the jurisdiction where the metal is stored, and the standard terms of the Warehouse available as www.accessworld.com."
"Access World's General Terms and Conditions are applicable to all offers made by Access World, all agreements concluded between Access World and a customer, and any other work carried out by Access World for the customer. A copy of the General Terms and Conditions will be sent to you upon request or can be found on our website at www.accessworld.co." (emphasis added).
"The judge avoided this conclusion by approaching the disclaimer as if it were a contractual exclusion. On such an approach it would need to be strictly construed and the argument was available that it did not as such cover an oral statement. But that is not, in my judgment, the right approach. It is not an exclusion to be construed. The right approach, as is made clear in Hedley Byrne, is to treat the existence of the disclaimer as one of the facts relevant to answering the question whether there had been an assumption of responsibility by the defendants for the relevant statement. This question must be answered objectively by reference to what a reasonable person in the position of Mr McCullagh would have understood at the time that ·he finally relied upon the representation." (emphasis added)
K.3 Reasonableness
"After [UCTA], in commercial matters generally, when the parties are not of unequal bargaining power, and when risks are normally borne by insurance, not only is the case for judicial intervention undemonstrated, but there is everything to be said, and this seems to have been Parliament's intention, for leaving the parties free to apportion the risks as they think fit and for respecting their decisions."
"99. An important pillar of English common and commercial law is party autonomy. Parties are free to contract on terms they choose, to allocate risks as they see fit - and the court will enforce their bargains. Outside the scope of application of the Unfair Contract Terms Act 1977 ("UCTA") but taking account of its enactment, as Lord Wilberforce observed in Photo Production Ltd v Securicor Transport Ltd [1980] I Lloyd's Rep 545; [1980] AC 827 at page 843:
"After this Act, in commercial matters generally, when the parties are not of unequal bargaining power, and when risks are normally borne by insurance, not only is the case for judicial intervention undemonstrated, but there is everything to be said ... for leaving the parties free to apportion the risks as they think fit and for respecting their decisions."
"A basic principle of the common-law of contract . . . is that parties to a contract are free to determine for themselves what primary obligations they will accept . .. ".
" ... the more outlandish the clause the greater the notice which the other party, if he is to be bound, must in all fairness be given."
In essence the question of the reasonableness of notice entails "a principle of fair and open dealing" (Bingham LJ in lnterfoto, at page 439) or avoiding the "mischief of ignorance" (to paraphrase HHJ Waksman's summary, in Allen Fabrications Ltd v ASD Ltd (t/a ASD Metal Services and/or Kockner & Co Multi Metal Distribution) [2012] EWHC 2213 (TCC) at paragraph 62).
"55. Where experienced businessmen representing substantial companies of bargaining power negotiate an agreement, they may be taken to have had regard to the matters known to them. They should, in my view, be taken to be the best judge of the commercial fairness of the agreement which they have made; including the fairness of each of the terms in that agreement. They should be taken to be the best judge on the question whether the terms of the agreement are reasonable. The court should not assume that either is likely to commit his company to an agreement which he thinks is unfair, or which he thinks includes unreasonable terms. Unless satisfied that one party has, in effect, taken unfair advantage of the other - or that a term is so unreasonable that it cannot properly have been understood or considered - the court should not interfere.""
K.4 The proper construction of Clause 10.3
L. MITIGATION
"Q. In the absence of that working, the prudent course of action, the only course of action consistent with your duties to your own company, and consistent with your fiduciary duty to Natixis, would be to pursue him in court to get a judgment and then to seek to enforce it wherever you can find assets, wouldn't it?
A. Yes, that's logical, albeit I'm not so sure the Chinese court system and the Western court systems are the same."
"In mitigating his loss the claimant victim of a wrong is only required to act reasonably and the standard of reasonableness is not high in view of the fact that the defendant is an admitted wrongdoer. Lord Macmillan put this point well for contract in Banco de Portugal v Waterlow [[1932] AC 452]; his remarks apply equally to tort. He said [at p. 506]:
"Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken."
"A claimant need not take steps to recover compensation for his loss from parties who, in addition to the defendant, are liable to him for the same loss
9-094 This is an undoubted principle and it is a principle which, strictly speaking, stands on its own feet independently of mitigation. It is mentioned here largely because it quite often becomes associated with mitigation in the minds of both judges and commentators. On this matter The Liverpool (No.2) is the central case. It was in this case that Harman LJ made the first clear statement of the principle, pointing out that otherwise it would have been unnecessary for the legislature to make provision for contribution and indemnity between joint and several tortfeasors. Indeed The Liverpool (No.2) goes as far as to show that, even if the third party offers payment of the amount for which he is liable, the claimant is not required to accept it in mitigation. In that case the defendants' ship through negligence came into collision in port with another ship which sank. The claimant harbour board sued the defendants, whose liability was limited, for expense incurred and damage sustained in clearing the port of the wreck. However, the claimants had also taken steps to enforce their statutory right against the owners of the wreck to recover from them any expenses outstanding after raising and selling the wreck, and not only had this amount been established but the money had been tendered, refused by the claimants, and then put on deposit by the owners of the wreck. In such circumstances the Court of Appeal held that the claimants were under no duty to satisfy part of their damages by accepting the money already on deposit. Harman LJ, delivering the court's judgment, pointed to the analogy that
"it has never been the law that a creditor having a security against a third party for his debt must give credit for that when proving in the bankruptcy""
"20. Mr Railton submits that the authorities demonstrate a principled approach to the question what credit is to be deducted in assessing what loss is recoverable in situations such as the present. He referred me to a line of authorities including Steamship Enterprises of Panama Inc, Liverpool v Ousel (The Liverpool) (No 2) [1963] P 64, International Factors Ltd v Rodriguez [1979] 1 QB 351, London and South of England Building Society v Stone [1983] 1 WLR 1242, Standard Chartered Bank v Pakistan National Shipping Corporation [2001] CLC 825, and Peters v East Midlands Strategic Health Authority [2009] 3 WLR 737. Authorities such as these are summarised in the textbooks as giving rise to a principle. In Halsbury's Laws of England, 4th Edition, volume 12(1) at para 826 it is said:
In general, where a claimant has a right of action against two obligors in respect of a particular matter, but brings an action against only one, the defendant cannot generally avoid or reduce his liability on the ground that the claimant, having a potential action against the other obligor, has not suffered the loss claimed. The availability of any such alternative cause of action affords no defence to the particular obligor's liability to pay damages in full unless the failure to pursue that liability constitutes a failure to take reasonable steps to mitigate the claimant's loss. Where, however, a claimant who has concurrent claims against two obligors in respect of the same matter recovers the whole or part of his loss from one of those obligors, the amount which the claimant thus recovers is applied in diminution of the damages which are awarded to him against the other obligor. A claimant cannot recover more than the total sum due in respect of his loss, merely by reason of the fact that his claim may lie against more than one person. The rule reflects a general judicial dislike of overcompensation.
The principle is however put differently in McGregor on Damages, 18th Edition, para 7-085: …
[as quoted above]
principle that a claimant is free to choose from whom to recover compensation has nothing to do with mitigation of loss — see The Liverpool (No 2) per Harman LJ at page 83 and Peters per Dyson LJ giving the judgment of the court at page 752, para 41."
"23. The Liverpool (No 2) was not referred to in International Factors Ltd v Rodriguez where a director of a company, being sued for conversion of cheques which he had paid into the company's account, but which should have been paid to the claimant factors, contended that the claimant factors had suffered no loss, because they had a right of action against the debtors, the drawers of the cheques. The debtors had been notified that the debts were assigned to the plaintiff debt factors but they mistakenly sent payment to the company. The argument was therefore that the claimant debt factors could have sued the debtors on the original obligation, making them pay twice over. That argument pursued by a tortfeasor guilty of conversion was perhaps unlikely to succeed. Sir David Cairns put it this way at page 359A to B:
A plaintiff who has two causes of action cannot be met when he makes a claim against one defendant by the answer: "Oh, no; you've suffered nothing by my tort because you have a cause of action against somebody else".
That clearly cannot be right. The principle, although unstated, is the same as that enunciated in The Liverpool (No 2)…" (emphasis added)
"A claimant need not take the risk of starting an uncertain litigation against a third party Thus in Pilkington v Wood [1953[ Ch , the claimant bought freehold land from a seller who purported to convey the property as beneficial owner, the defendant acting as the claimant's solicitor in the transaction. When the claimant later tried to sell the property he found the title was defective, since the seller was a trustee of the property and had committed a breach of trust in buying it himself. In the claimant's action against the defendant solicitor for negligence, the latter contended that before suing him the claimant ought to have mitigated his damage by suing the seller on an implied covenant of title. This contention was rejected by Harman J because, even conceding that the defendant had offered an adequate indemnity against costs in an action against the seller and that the seller was solvent and therefore worth suing, it was not clear that the claimant had a good prima facie right of action against the seller. The judge stated that he was of the opinion that
"the so-called duty to mitigate does not go so far as to oblige the injured party, even under an indemnity, to embark on a complicated and difficult piece of litigation against a third party.""
"The facts of that case were, in my judgment, very different from the facts in the present case. In the present case the litigation in question was no more than a possession action which is an ordinary feature of enforcing security, with which the plaintiffs in this case will be well familiar and which would have been a necessary step whether or not there were defects in the security. Such litigation is in no way analogous to the action that was proposed in Pilkington." (emphasis added)
M. Quantum
(1) US$30,428,374.40, i.e. the price Natixis paid to Marex under the Purchase Contracts.
(2) US$1,476,025.80, i.e. the loss Natixis incurred when it unwound the hedges of the Purchase Contracts.
(3) US$209,694.25, i.e. the sums which Natixis would have received on the Prompt Dates (17 May 2017 and 21 June 2017) if not for Marex's breaches of the Purchase Contracts.
(4) Statutory interest, at a rate and on a basis to be determined (if not agreed), from the Prompt Dates until the date of Judgment.