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England and Wales High Court (Commercial Court) Decisions


You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Daburn v Persons Unknown & Ors [2025] EWHC 356 (Comm) (07 February 2025)
URL: http://www.bailii.org/ew/cases/EWHC/Comm/2025/356.html
Cite as: [2025] EWHC 356 (Comm)

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If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.

Neutral Citation Number: [2025] EWHC 356 (Comm)
Case No: LM-2024-000039

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)

The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
7th February 2025

B e f o r e :

HIS HONOUR JUDGE PELLING KC
(Sitting as a Judge of the High Court)
Remotely via Microsoft Teams

____________________

Between:
STUART CHARLES DABURN Claimant
-and-
(1) PERSONS UNKNOWN CATEGORY 1
(being the natural and/or legal person(s) who
(i) run, operate and or own the websites Toro-banc.net, toro-banc.io, toro-banc.com (the "Websites"); and/or
(ii) use the telephone numbers +447311088019, +447383912305 and/or +447383912305; and/or
(iii) use one or more of the aliases Nicole Bennett, Mia Thompson, Marc Adler, Sebastien Colton, Alex Jensen; and/or
(iv) use the email addresses nicolebennett@toro-banc.io, mia.t@torro-net.io, sebastiancolton@toro-banc.io, alex.j@toro-banc.io ; and/or
(v) run, operate and or own the corporate entities Purple Sun Ltd, Giricon Ltd, 4Word Solutions; and/or
(vi) operate, own and/or control the four addresses: Bc1…c8ln7a, bc1…nuycv, bc1…xs7vy, 1Nn…n1f32 ("the Depositing Addresses")
(2) PERSONS UNKNOWN CATEGORY 2
(being the natural and/or legal persons who operate/own and/or control
(i) the addresses held at the Kucoin.com Cryptoasset
(ii) Exchange: (I) 36h…co5dtfR; and 3Qc…kLwYg (the "Kucoin Addresses"); and
(iii) The following 30 addresses held the
Kyrrex.com cryptoasset exchange::3By...qzJ64, 3Lb...nZWMQg, 3BL...kqncNG, 3P5...ysxmFP, 3Lq...FZKbN, 3N7...kSEFkMx, 3N4...unTQSP, 3DR...26JkFSR, 3Pp...ttBZokp, 3Fd...oi8zzS, 3Lw...fkSeC6M, 37H...Ro7J5y5, 31n...A53Xk7s, 3AU...fYgKjo, 32h...8CXGBdir, 3Ah...JVZKiXg, 3Fi...GLV29T2, 3BM...61kGYEH, 31p...YqjHY, 3Nr...o84HYM, 38N...4ZoQcBjJ,
3MW...S7JHboG, 3LH...rPGKVSh, 33b...92jb3so, 37b...CvsmmAnh, 3C9...sZDBan, 3Hk...szSpGXG, 37B...JWnG6Mk, 3HR...b5okrn and 3Ac...pGywE (the "Kyrrex"Addresses")
(3) 4WORD SOLUTIONS
(4) COURT LEET LIMITED
(5) RIANA GROUP LIMITED
(6) KYRREX LIMITED
(A Company Registered in St Vincent and the Grenadines)
(7) BOXER CART ADS LIMITED
(8) GREENCODE CONNECTION LIMITED
(9) PURPLESUN LIMITED
(10) GIRICON LIMITED Defendants

____________________

Transcript of the Stenograph Notes of Marten Walsh Cherer Ltd.,
2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.
Telephone No: 020 7067 2900. DX 410 LDE
Email: info@martenwalshcherer.com
Web: www.martenwalshcherer.com

____________________

MR. HENRY REID (instructed by Lawrence Stephens Limited) for the Claimant
THE DEFENDANTS did not appear and were not represented

____________________

HTML VERSION OF JUDGMENT APPROVED
____________________

Crown Copyright ©

    HIS HONOUR JUDGE PELLING KC:

  1. This is an application for summary judgment in cryptocurrency fraud claim where the claimant has advanced both personal and proprietary claims. As is typical with claims of this sort, the defendants are identified as being a mixture of named defendants and the first and second defendants, who are two separately defined categories of persons unknown. Broadly, the Persons Unknown Category 1 defendants are those natural or legal persons who perpetrated the fraud to which I turn in more detail in a moment, and the Persons Unknown Category 2 defendants are those who control the cryptocurrency exchange wallets to which assets belonging to the claimant (or their traceable proceeds) are located.
  2. The application is for summary judgment against all defendants, other than Kyrrex Limited, who are referred to collectively as the "defaulting defendants" on the basis that they have not filed acknowledgements of service or defences. Summary judgment as opposed to judgment in default is sought on the basis that for practical reasons it is desirable that there should be summary judgment with a reasoned judgment in support for the purposes of enforcement.
  3. The first issue that arises, therefore, is whether or not I should give permission to the claimants to apply for summary judgment. The applicable principles are those summarised by Henshaw J in Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. v Société Bengaz S.A. [2024] EWHC 901. In summary, the points that are relevant for the present purposes are three in number. The first is whether to give permission would defeat the purpose of the rule that requires permission to be obtained where summary judgment is sought against a defendant who has not filed an acknowledgement of service, which is to ensure that no application for summary judgment is made before a defendant has had an opportunity to participate in the proceedings and to protect a defendant who wishes to challenge the court's jurisdiction. That problem does not arise in the circumstances of this case because there is only a question-mark as to whether or not service has been affected in any meaningful sense in relation to the first category of defendants unknown. Sensibly, Mr. Reid, who appears on behalf of the claimant, acceded to a suggestion made by me in the course of the argument that the best way to proceed in relation to the claim against the first category of defendants unknown is to stay the application for summary judgment and these proceedings as against those defendants, with liberty to restore. The problem does not arise in the same way in relation to the second category of persons unknown.
  4. The second factor relevant to deciding whether or not permission should be given to apply for summary judgment where acknowledgements of service have not been filed is whether the court can be satisfied that the court has jurisdiction to hear the claim. For reasons I will explain later in this judgment, as against all the defendants, other than the first category of unknown defendants, service has been affected in accordance with directions previously given. Assuming service has been affected as directed, the court has jurisdiction to hear the claim, for the reasons set out in in earlier judgments in these proceedings when applications were made for worldwide freezing relief and associated information orders.
  5. The third factor which is relevant is that summary judgment may be more readily enforced in some foreign jurisdictions than a default judgment. That is a point relied upon in the circumstances of this case because it may be necessary to enforce any judgment obtained by the claimant in these proceedings in myriad foreign jurisdictions, some of which may be reluctant or simply unable as a matter of local law to enforce a default judgment.
  6. In those circumstances, it is submitted that I should accede to the application and grant permission for the summary judgment application to proceed. I very readily grant permission for the summary judgment application to proceed as against all except the first category of unnamed defendants. For the reasons I have identified, they fall into a separate category so far as service is concerned. The others have been validly served. The time for challenging jurisdiction has long gone and applying the reasoning which has been adopted in countless cases in relation to cryptocurrency frauds, over, now, an increasing number of years, I am entirely satisfied that the court has jurisdiction to hear the application and to enter judgment in relation to the claim. Finally, I am satisfied it is entirely appropriate that the claimant would wish to obtain summary judgment for the purposes of being able to enforce any judgment I grant in all foreign jurisdictions.
  7. I turn now, therefore, to the summary judgment application and I remind myself at the outset that the relevant tests for a summary judgment application are those set out in the well-known decision in Easyair Ltd v. Opal Telecom Limited [2009] EWHC 339 (Ch). It is not necessary for me to set out all the sub-paragraphs within that judgment that summarise how summary judgment applications are to be approached. The key point for present purposes is that the court should enter judgment on a summary basis where there is no (or, in a case such as this, no basis for thinking that there is a) realistically arguable defence to any of the claims that have been made. Where there is a no more than fanciful defence available then summary judgment should be entered. The test, therefore, focuses on the reality of any defence relied on.
  8. On the evidence which has been filed in these proceedings, which is voluminous, I am satisfied that proper notice of the application has been given to the defaulting defendants (excluding for present purposes the first category of persons unknown defendants) and I am satisfied on the basis of the evidence, which, is entirely uncontradicted by any evidence filed from the defendants, that the claimant is entitled to succeed at a factual level in the claims made against those defendants. In the decision of Richard Salter KC, sitting as a judge of this court, in Boonyaem v Persons Unknown and Others [2023] EWHC 3180 (Comm), the judge was prepared to proceed on the basis that the evidence relied upon by the claimant was not, as Mr Salter KC put it, "obviously incredible" and therefore, and in those circumstances was prepared to accept it without qualification. I approach this case in exactly the same way. The evidence filed in support of the claim is not obviously incredible, it is not contradicted and therefore should be accepted. It follows, therefore, that I am satisfied the claimant has been the victim of a fraudulent cryptocurrency scheme that operated between May 2023 and January 2024 in the course of which the claimant acted on the advice of people who purported to be bona fide crypto currency investment advisors but who turned out to be the operators of the fraudulent scheme, to make various transfers for the purpose of investing in cryptocurrency for the purpose of commencing trading on what was described as the "Toro-Banc" trading platform.
  9. In the result, the claimant was induced to acquire and transfer in excess of 48 Bitcoin, which has a current value of about £1.4 million-odd, to four crypto asset wallets controlled by those operating the scheme. The claimant became suspicious of the bona fides of the scheme and engaged expert inquiry agents to analyse what had happened to his assets. It rapidly become apparent that the Toro-Banc trading platform was a fraudulent scheme that had been the subject of a warning issued by the Financial Conduct Authority and that the assets belonging to the claimant had been dissipated through a very complex network of addresses. Following the commencement of these proceedings, various freezing orders were obtained and some, but not all, of the traceable proceeds of the fraudulent scheme were frozen in the hands of various exchanges having control of the wallets to which the claimant's assets (or their traceable proceeds) had passed. It would be possible to extend this judgment by a very significant length by descending into the detail concerning the minutiae of the various transfers that took place, but that is unnecessary. It is all set out in the evidence filed in support of the application and, as I have said, that is credible evidence on which a court can properly and sensibly act.
  10. In those circumstances, I am satisfied that there was a fraudulent scheme by which the claimant lost the sums claimed in these proceedings, together with an additional sum of some £217,000 that he was also induced to transfer to bank accounts by the people operating the scheme.
  11. The consequences that follow, as a matter of law, are relatively straightforward. There are a variety of causes of action which are available and have been pleaded against the various defendants, some of which are proprietary in nature and some of which are personal in nature. The personal claims which have been pleaded include an unlawful means conspiracy and an unjust enrichment claim. So far as proprietary claims are concerned, the claim is advanced on the basis that because the funds transferred by the claimant were obtained by fraud, they were impressed with a constructive trust at the moment of transfer, applying the well-known and often applied dictum of Lord Browne-Wilkinson of Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, where at 716C-D, Lord Browne-Wilkinson said this:
  12. "... when property is obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and traceable in equity. "

    In those circumstances, the claimant has available to him against each of the defendants against whom summary judgment is sought, both a personal claim for damages for unlawful means conspiracy and/or a personal claim for unjust enrichment to be quantified in each case in the sums he was induced to part with by fraud. By the same token he is entitled to maintain (and maintains) proprietary claims as against the second category of unknown defendants, who were the recipients of the proceeds of the fraud and the various named defendants who in various ways received sums as well.

  13. In those circumstances, the question which arises is whether or not I can enter summary judgment against the second category of persons unknown. There was a discussion in the course of the argument in which Mr. Reid persuaded me that, as the law now stands, as long as service in the form of communication can be established in relation to an unknown category of defendants it is possible, as a matter of legal theory, to enter judgment for personal claims against such defendants. The principle of law is that identified by the Supreme Court in Cameron v Liverpool Victoria Insurance Co Ltd [2019] UKSC 6; [2019] 1 WLR 1471. I accept that there is a distinction of principle to be drawn between the Category 1 unknown defendants who are anonymous and cannot be identified and therefore cannot be served and over whom, therefore, arguably at least, jurisdiction cannot be asserted, and the second category who can in principle be served albeit by the alternative means directed earlier in these proceedings. There is some suggestion in the subsequent case law – see Mooji v. Persons Unknown and others [2024] EWHC 814 (Comm) (HHJ Russen KC) – that this distinction may be immaterial where as here summary judgment has been directed. That said, the difficulty that arises in this case is an entirely factual and practical one, which is that the only methods of service which have been adopted in relation to the first defendants are substituted service provisions concerning service by e-mail and by WhatsApp message. In principle, those are perfectly satisfactory alternative means of serving proceedings in cases such as this, but at a practical level, the e-mails serving the proceedings on the first category of persons unknown defendants were, as I understand it, bounced back, demonstrating that they were not received. The WhatsApp messages do not have the in-built acknowledgement showing that they were either received or at any rate read. In those circumstances, it is highly unlikely there has been any effective communicated service on the first category of persons unknown defendants. Because of that and because the practical significance of obtaining a judgment against the first category of persons unknown is limited, Mr. Reid acceded to the suggestion I made that the claim as against the first category of unknown defendants should be stayed.
  14. Different considerations apply, however, to the second defendants because they are the specific persons or entities who own, or control at any rate, the wallets containing the proceeds of the fraud against whom service by alternative means has been affected (subject to one point that I turn to in a moment) and in respect of which I see no difficulty in entering judgment, both on the proprietary claims that have been made against them and in relation to the personal claims that have been made against them. The point which arises is quite simply this: in relation to the proprietary claims, the unknown defendants in Category 2 could have come into these proceedings, engaged with them and defended, if they had legitimate bona fide purchases for value without notice defences in relation to the assets that were transferred to them . That requires a positive assertion by or on behalf of those defendants that that is so, but, as I have explained, none of the defendants have engaged with this process, none of them have come into these proceedings and asserted such a defence, and in those circumstances and on the evidence available, I am satisfied that those defendants have no realistic prospect of defending the claimant's claims, certainly in relation to the traceable proceeds and also in relation to the personal claim of unlawful means conspiracy on the basis it is advanced in the evidence.
  15. In those circumstances, I am satisfied that there should be summary judgment against the second and other defaulting defendants as asked. Only one point remains, which is a point concerning the means of service on the second category of unknown defendants. Entirely correctly, my attention was drawn to the fact that one of the e-mail addresses obtained by the claimant's solicitors was not used. It seems to me in a case such as this the appropriate course, out of an abundance of caution, is to include within the order an express provision which permits the second category of unknown defendants to apply to vary or set aside the judgment that has been obtained, providing an application is made within a fixed future period. Where in the world those defendants are located is entirely unknown. Therefore it is possible that when the order is served, it will be served on them in foreign jurisdictions. It is appropriate, as Mr. Reid suggests, therefore, that a fairly generous period should be included within the order for an application to be made to vary or set aside the judgment and what he suggests (and I agree), is that the period of 21 days is appropriate in the circumstances
  16. Taking a step back, therefore, there will be judgment against the various defaulting defendants, for damages for unlawful means conspiracy and in relation to the proprietary claims I have identified. My understanding is that the damages that are sought are sought by reference to the Bitcoins that were supplied and lost, so I will hear counsel briefly on the amount that is appropriate because it may involve converting Bitcoins to a sterling value at today's date and then inserting that in the judgment. However, for the reasons I have given, there will be summary judgment.
  17. (For continuation of proceedings: please see separate transcript)
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