Royal Bank of Scotland International Ltd (Respondent) v JP SPC 4 and another (Appellants) (Isle of Man)
Case ID: JCPC 2020/0044
Jurisdiction: The High Court of Justice of the Isle of Man (Staff of Government Division)
This case concerns a decision of the High Court of Justice (Appeal Division) of the Isle of Man (the "Appeal Court"). The Judicial Committee of the Privy Council (the "Board") is asked to consider, whether:
1. as a substantive matter, the Funds have an arguable case that a duty of care exists between a bank and a non-customer on the basis of existing authority or, in the alternative, if such a duty can be said to exist as an incremental development of the extant authority; and
2. as a procedural matter, the Appeal Court erred as to certain other substantive and procedural matters including its (i) application of the relevant burden of proof; (ii) identification of the relevant factual and legal issues at stake and (iii) failure to permit amendments to statements of case.
The Funds are investment vehicles incorporated in the Cayman Islands. RBSIL provides banking services in the Isle of Man. Investors subscribed for certain classes of non-voting share in the Master Fund during 2009 with the subscription amounts used to pursue low-value, high-volume litigation claims (the "Scheme"). The Scheme was, naturally, also intended to return a profit to the investors.
The subscription amounts flowed into an account at RBSIL held in the name of Synergy (Isle of Man) Limited ("SIOM" and the "Main Account" respectively). SIOM was identified to investors, in the relevant fund offering documents, as responsible for the disposition and investment of the amounts in that account. SIOM was owned by the two individuals that had conceived the Scheme, Mr Schools and Mr Kennedy. It is alleged that those individuals misapplied the amounts received into the Main Account and, in particular, that they transferred significant sums to third party companies in which they also had undisclosed interests. As a result, the Funds allege that RBSIL failed to comply with its regulatory duties and that, had it complied with these relevant duties, a substantial part of the loss suffered by the Funds could have been avoided.
RBSIL attempted to strike out and seek summary judgment in the High Court of Justice (the "First Instance Court") where its applications were dismissed. The Appeal Court struck out the Funds’ claim and awarded summary judgment in favour of RBSIL.
JP SPC 4, JP SPC 1
Royal Bank of Scotland International Ltd
Lord Briggs, Lord Kitchin, Lord Hamblen, Lord Burrows, Lady Rose
Hearing start date
10 February 2022
Hearing finish date
10 February 2022