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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Osbourne v Persons Unknown & Anor [2022] EWHC 1021 (Comm) (10 March 2022) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2022/1021.html Cite as: [2022] EWHC 1021 (Comm) |
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person
who breaches a reporting restriction is liable to a fine and/or imprisonment. For guidance on whether reporting restrictions apply, and to what information, ask at the court office or take legal advice.
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
7 Rolls Buildings Fetter Lane London EC4A 1NL |
||
B e f o r e :
____________________
LAVINIA DEBORAH OSBOURNE | ||
| and | ||
(1) PERSONS UNKNOWN | ||
| (2) OZONE |
____________________
NO APPEARANCE by or on behalf of the Respondents
____________________
VERSION
OF JUDGMENT (APPROVED)
Crown Copyright ©
HHJ PELLING QC:
validly
transferred into the Commercial Court by an order of a judge of the Commercial Court.
persons
unknown
from a crypto asset account maintained by the claimant.
persons
unknown
who control the wallets to which the non-fungible tokens which are the subject of these proceedings have apparently been transferred.
various
non-fungible tokens in connection with some support provided by the claimant to that entity. With that in mind the
various
non-fungible tokens, representing digital works of art, were transferred into the account controlled by the claimant.
persons
unknown
removed the non-fungible tokens from the claimant's account without her knowledge or consent, in circumstances which are at present a little unclear. I am satisfied, however, that the claimant first discovered the loss on or about 27 February 2022, when she discovered that the NFTs had been removed from her wallet without her consent.
persons
unknown
for the purposes of freezing in the hands of the
persons
unknown
the non-fungible assets that have been removed from her without her agreement, and also an order directed to Ozone requiring it not to permit any further transfers of the assets concerned.
persons
unknown
are located, and it is clear that Ozone is an American corporation with, as far as I can see from the evidence, no connection whatsoever to the English jurisdiction.
persons
unknown,
and secondly, if and to the extent such a cause of action has been demonstrated, whether she is able to demonstrate that it is appropriate for an order to be made permitting service of proceedings against
persons
unknown
out of the jurisdiction wherever they might be located, in circumstances where, if I make an information order as against the second defendant, the information, if provided, will enable the location of the
persons
unknown
and possibly their identity to become known.
v
Persons
Unknown
and others (unreported) [2020] (Comm), a judgment delivered on 21 December 2020 in the Commercial Court, where at paragraph 15, Butcher J held that the lex situs of a crypto asset is the place where the
person
or company who owns it is domiciled, adopting the analysis contained in Professor Andrew Dickinson's book on crypto currencies and public and private law. I consider I should follow these cases in relation to the asset the subject of these proceedings. Therefore, and for these purposes, the claimant is to be treated as having had the non-fungible tokens in her possession in England by operation of that principle.
persons
unknown,
and I am entirely satisfied that it is appropriate to grant an injunction in the terms sought, essentially for all the reasons which are identified in the skeleton argument filed in support of the application. In particular because I am satisfied, for the reasons already identified, that there is a serious issue to be tried as between the claimant and
persons
unknown
concerning what amounts to the theft of her assets from her crypto asset account.
persons
unknown,
and therefore, there can be no confidence that they have the means to meet even the relatively modest damages claim that is likely to arise in the circumstances of this case. The second reason why I am satisfied that damages are not an adequate remedy derive from the nature of the assets themselves. They are given a modest
value
in these proceedings of about £4,000, give or take. The evidence demonstrates, however, that these are assets which have a particular,
personal
and unique
value
to the claimant which extends beyond their mere Fiat currency
value.
The Court will readily grant injunctions to protect assets in such circumstances. In those circumstances, I am satisfied that the claimant has demonstrated to a realistically arguable level required that damages would not be an adequate remedy so far as she is concerned.
persons
unknown
are concerned, I am satisfied that damages would be an adequate remedy in the sense that a cross-undertaking in damages is offered by the claimant, and they have no reason to suppose that she does not have the means to meet any liability that might arise, because, of course, if there were any reasons to suppose that the cross-undertaking could not be honoured in full against any orders made by the Court subsequently, then it would be a material non-disclosure to reveal that fact.
very
real risk that these assets will be transferred through multiple different accounts at great speed, and in a way which will make it practically either
very
difficult, or possibly even impossible, for the claimant to trace and retrieve her assets.
persons
unknown
are out of the jurisdiction.
v
Kyrgyz Mobile Tel Ltd [2012] 1 WLR 1804, consisting of a) a requirement in relation to the proposed defendant, that is to say the
persons
unknown
in the circumstances of this case, that there is a serious issue to be tried as between the
persons
unknown
and the claimant. I need say no more about that. I have already identified in earlier paragraphs of this judgment why I am satisfied that it is appropriate, and why there is a serious issue to be tried.
various
alternatives were identified by Miss Muldoon in the course of her submissions. In my judgment, the strongest cause of action which is available to the claimant in the circumstances of this case is the assertion that the assets, the subject of these proceedings, are held by the
persons
unknown
on a constructive trust. I reach that conclusion because these are assets which have been stolen from the claimant on her case, and she has demonstrated a strong arguable case that that is so.
v
Islington LBC [1996] AC 669 and 716, property obtained by fraud in this manner is impressed with a constructive trust immediately the property concerned comes into the hands of those responsible for removing the assets concerned.
"The claimant may serve a claim form out of the jurisdiction with the permission of the Court under rule 6.36 where…a claim is made against the defendant as a constructive trustee, or trustee of a resulting trust where the claim arises out of acts committed or events occurring within this jurisdiction or relates to assets within the jurisdiction".
persons
unknown
by reference to gateway 15.
persons
unknown
are located, or the jurisdictions in which they are to be found. On the other hand, what I do know is that the claimant is located in England and English law treats the assets as having been removed from her in England. In those circumstances, on balance, and at this stage in the enquiry, I am satisfied that England is the appropriate forum. I am satisfied in those circumstances that permission should be granted to serve the
persons
unknown
out of the jurisdiction.
v
Persons
Unknown
[2019] EWHC 3556 (Comm). As far as that is concerned, I take account of the fact that there is at least a possibility that the
persons
unknown
are located in jurisdictions which are subject to the Hague Service Convention. In those circumstances I have to ask myself what the exceptional circumstances are that justify departure from the Convention scheme. As far as that is concerned, I am satisfied applying that what is now a fairly substantial body of Commercial Court jurisprudence, that it is appropriate to direct service by an alternative means, because it is the mechanism by which the making of and the terms of an injunction can be brought speedily to the attention of the respondent to the injunction in a way which might be defeated if the more leisurely methods of service permitted by the Hague Service Convention were to be adopted. It is not every case where it is appropriate to adopt this approach but it is appropriate to do so where injunctive relief has been granted, and where therefore someone might be placed in contempt of Court by failing to comply with the relevant order.
personal
in nature rather than proprietary which means that if information is to be sought from a third party, that would have to be done generally speaking using the Norwich Pharmacal jurisdiction, rather than the Bankers Trust jurisdiction.
v
Christie, Manson, and Woods Ltd [2017] EWHC 487 (QB), paragraph 12 and following, by Warby J. They summarised down to five propositions. Firstly, that in order to obtain relief under the Bankers Trust jurisdiction it is necessary to demonstrate good grounds for concluding that assets belonging to the claimant have been removed from the claimant. I am satisfied that that ground is satisfied for the reasons explained earlier in this judgment.
persons
unknown
to be served on those individuals, and therefore for the assets hopefully to be recovered.
violated.
As to that, a balance must be struck between the rights of the claimant and the rights of those who control the accounts.
vary
or discharge the order within a fixed future period; and delaying the obligation to comply with the terms of the order until after expiry of the time by which that application has to be made and thereafter until final disposal of the application if made. .
various
undertakings to be given by the claimant in order that Ozone's interests can be protected. As to that, it was unfortunate that the draft orders that have been provided do not contain the undertakings that the case law identifies as required. However, the undertakings that are required are threefold: first of all, an undertaking to meet the expenses incurred by Ozone in complying with the order; secondly, to compensate Ozone in damages that it becomes liable to pay as a result of complying with the order; and third, an undertaking to use any information supplied only for the purposes of attempting to trace the assets, the subject of these proceedings.
"a claim made against aperson,
the defendant, on whom the claim form has been, or will be served, otherwise than in reliance on this paragraph and a) there is between the claimant and the defendant a real issue which is reasonable for the Court to try; and b) the claimant wishes to serve the claim form on another
person
who is a necessary or proper party to that claim".
persons
unknown
otherwise than by relying upon gateway three, namely by relying on gateway 15 as I have summarised earlier in this judgment. Therefore, and to that extent, I am satisfied there is an anchor defendant for the purposes of gateway three.
persons
unknown for the purposes of obtaining the information which is sought.