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Transworld Payment Solutions UK Ltd & Anor v First Curacao International Bank NV & Anor
Factual and Procedural Background
The Court of Appeal heard the Appellants’ application for permission to appeal against an order made by the High Court following a 19-day trial. The claim concerned allegations that Company B, a bank, participated in or assisted MTIC fraud involving telecommunications and computer-sector companies. [1][2][3][4]
The principal allegation was that Defendant, who was Company B’s sole shareholder, director, CEO and president, knew or deliberately ignored the prevalence of MTIC fraud while causing Company B to provide banking facilities despite inadequate compliance procedures. The High Court rejected the allegation of dishonesty. [2][5][6]
The Appellants advanced ten grounds, but the parties agreed that none could succeed unless the first ground—challenging the rejection of the dishonesty allegation—succeeded. The Court of Appeal refused permission to appeal. [7][8]
Legal Issues Presented
- Whether the High Court arguably erred in law when applying the two-stage test for dishonesty to Defendant’s conduct. [9][10]
- Whether the High Court wrongly required proof that Defendant knew that MTIC fraud was prevalent or widespread in the relevant sector, or otherwise failed to assess the evidence cumulatively. [9][11][12]
- Whether an arithmetic error concerning the prevalence of MTIC fraud materially affected the High Court’s conclusions. [13][14]
Arguments of the Parties
Appellants’ Arguments
- The High Court allegedly adopted an excessive test requiring Defendant to suspect that the vast majority of prospective customers were involved in MTIC fraud. [9]
- The judge allegedly collapsed the subjective and objective stages of the dishonesty test, contrary to the guidance in Grosvenor Property Developers Limited v Portner Law Limited. [15][16]
- The judge allegedly ignored evidence, considered too short a period, treated acknowledgments of inadequate compliance procedures as evidence of honesty, and wrongly required proof that other persons within Company A or Company B participated in the fraud. [9]
- The judge allegedly compartmentalised the allegations, made an arithmetic error concerning the prevalence of MTIC fraud, and reached conclusions inconsistent with his own findings. [17][12][13][18]
Respondents’ Position
- The Respondents maintained that the High Court had ample evidence for its findings that Defendant did not know or deliberately ignore the prevalence of MTIC fraud, that Company B’s compliance function was not known to be incapable of identifying fraudulent customers, and that banking facilities were not provided without relevant enquiries. [19]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| LZLabs Gmbh & Ors v IBM UK Limited [2025] EWCA Civ 842 | An appeal against findings based on oral evidence and extensive contemporaneous documentary evidence faces a high hurdle. [20] | The Court applied that approach in assessing the challenge to the High Court’s factual and evaluative findings. [20] |
| Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67; [2018] AC 391 | The dishonesty test requires identification of the defendant’s actual state of mind, followed by application of the objective standards of ordinary decent people. [10] | The Court held that the High Court correctly articulated and applied the test, notwithstanding that it did not separately label its conclusions under each stage. [21][22] |
| Grosvenor Property Developers Limited v Portner Law Limited [2026] EWCA Civ 1238 | The two stages of the dishonesty test should not be compressed into one, because doing so may introduce standards concerning carelessness or other conduct falling short of dishonesty. [15][16] | The Court held that the High Court had not made that error and that the complaint concerned form rather than substance. [21][22] |
| Group Seven Ltd v Nasir [2019] EWCA Civ 614; [2019] 3 ALR 1011 | A compartmentalised analysis may be inappropriate where connected conduct must be assessed together. [17][23] | The Court distinguished that case because no specific fraudulent transaction was identified here and Defendant’s conduct was not self-evidently dishonest. [23][24] |
Court's Reasoning and Analysis
The Court emphasised that the High Court had conducted a detailed review of the evidence and contemporaneous documents before rejecting the dishonesty allegation. Appellate intervention was therefore subject to a high threshold. [6][20]
The Court accepted that the Ivey test has two stages, but found no real prospect that the High Court had collapsed them. The judge correctly identified Defendant’s subjective knowledge and beliefs, then reached an objective conclusion about whether his conduct was dishonest. [10][16][22]
The Court rejected the argument that the High Court had imposed an unrealistic requirement that Defendant know that most sector participants were fraudulent. The relevant formulation reflected the pleaded case that MTIC fraud was believed to be prevalent or widespread. [25][12]
The alleged compartmentalisation was also rejected. Unlike the circumstances considered in Group Seven, this case involved no identified fraudulent transaction and no conduct that was self-evidently dishonest. The High Court was entitled to keep its fact-finding within the scope of the pleaded case. [23][24][12]
The arithmetic error did not provide a realistic basis for appeal. The actual percentage of fraudulent businesses was less important than Defendant’s state of knowledge, and the High Court’s principal conclusions rested on the contemporaneous documents and other evidence. [13][26][27][14]
Finally, the Court rejected the contention that the High Court had found Defendant knew that 50% of the sector was fraudulent. The relevant passage was merely an illustrative assumption, not a finding of actual knowledge. [18]
Overall, the first ground did not identify an arguable error of law with a real prospect of success. [19]
Holding and Implications
Permission to appeal was refused. Because the remaining grounds depended on success on the first ground, the Appellants could not pursue those grounds. [7][8][19]
The direct effect was that the High Court’s rejection of the dishonesty allegation remained undisturbed. The opinion does not discuss broader implications or establish a new precedent.
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