Singularis Holdings Ltd (in liquidation) v Daiwa Capital Markets Europe Ltd

Singularis Holdings Ltd, a company registered in the Cayman Islands, sought damages from Daiwa Capital Markets Europe Ltd for breach of the Quincecare duty of care, which is an implied term of the contract between a bank and its customer. Singularis, controlled by its Chairman and sole shareholder, Maan Al Sanea, instructed Daiwa to make eight payments totalling approximately US$204,500,000 from its account. The judge found that these payments were a misappropriation of Singularis' funds, and that Daiwa's execution of the payments constituted a breach of the Quincecare duty. Daiwa appealed against this finding of liability, arguing that the fraud committed by Al Sanea should be attributed to Singularis, and that this would defeat Singularis' claim on various grounds, including illegality, lack of causation, and an equal and countervailing claim in deceit. The Supreme Court held that the fraud could not be attributed to Singularis for the purpose of the Quincecare duty. The court held that the purpose of the Quincecare duty is to protect a bank’s customers from harm caused by people for whom the customer is, in some way, responsible. To attribute the fraud of a controlling individual to the company would be to "denude the duty of any value in cases where it is most needed". The court also held that none of Daiwa's proposed defences would succeed: the illegality defence was not applicable because it would be disproportionate to deny Singularis' claim; the claim was not defeated by lack of causation because the breach of the Quincecare duty was the cause of the loss; and the claim was not defeated by an equal and countervailing claim in deceit because Daiwa's breach of duty was the cause of its exposure to Singularis' claim. The appeal was dismissed and the judge's order stood.