Duty of care - freezing order notified to bank by customs commissioners - bank not liable to commissioners for sums released

Commissioners of Customs and Excise v Barclays Bank plc: QBD (Mr Justice Colman): 3 February 2004

The commissioners obtained freezing injunctions against two companies which held accounts with the bank.

The orders prohibited disposal of or dealing with money in those accounts.

The commissioners' solicitors gave notice of the injunctions to the bank, which later permitted substantial payments to be made out of the accounts.

In letters received by the commissioners after the prohibited transfers had taken place, the bank confirmed their agreement to abide by the orders.

The commissioners obtained judgment in default against the companies.

The commissioners claimed from the bank amounts representing the prohibited transfers together with interest.

The bank denied that it owed any duty of care to the commissioners.

Philip Sales and Daniel Stilitz for the Commissioners of Customs and Excise (instructed by the Solicitor, Customs and Excise); Michael Brindle QC and Richard Handyside for Barclays Bank plc (instructed by Lovells).

Held, dismissing the claims, that this was a case of pure economic loss; that a defendant against whom a freezing injunction had been obtained did not occupy a relationship of proximity with the claimant obtaining the order unless there was conduct amounting to an assumption of responsibility by that party; that it would be inconsistent with that analysis to conclude that by application of the threefold test of forseeability, proximity and reasonableness, a bank holding that defendant's assets, by being given notice of the order, owed a duty of care to the claimant; that there was nothing in the bank's relationship with the commissioners which so enhanced the element of proximity above that of the parties against whom the orders were made as to provide a foundation for a duty of care by application of the threefold test; that unless, prior to the prohibited transfers, the bank had by its conduct assumed responsibility to the commissioners to take reasonable care to prevent disposal of its customers' funds in accordance with the injunction, it could be under no liability in negligence; that unless the letters from the bank had been delivered to the commissioners before the prohibited transfers took place, the bank undertook no relevant assumption of responsibility; but that the bank owed a duty of care to the commissioners in respect of the funds remaining in the accounts after the letters were received.