Input:
The wedding of the Duke and Duchess of Cambridge on 29 April 2011 attracted vast public interest nationally and internationally.
Managing the crowds presented the Metropolitan Police with a big challenge.
In giving the judgment of the Administrative Court, [2012] EWHC 1947 (Admin), Richards LJ explained the nature of the policing operation, its command structure and planning, in considerable detail.
This was necessary because at the heart of the claims made against the police in these proceedings was a broad challenge that the planning and execution of the policing operation did not make proper allowance for the democratic rights of anti monarchist protestors to express their views in a peaceable way.
For present purposes, the background and circumstances giving rise to the claims may be outlined more shortly.
The police were aware that on the day of the wedding a large number of members of the Royal Family, foreign royalty and other heads of state would be moving around London and that thousands of citizens including children were expected to converge on central London to take part in the days celebrations.
One month earlier, on 26 March 2011, a day of action organised by the TUC had been marred by the actions of outsiders who used the occasion to commit various offences of violence.
There had been similar violent disruption of student protests in November and December 2010, including an attack on the Prince of Waless car.
In the build up to the royal wedding, the police had intelligence that activities aimed at disrupting the celebrations were being planned through social websites.
The threat level from international terrorism at the time was assessed as severe, meaning that an attempted attack was thought to be highly likely.
Thousands of police officers were deployed across the metropolis.
The strategic aims, as set out in briefing materials prepared by the Gold commander with overall responsibility for the safe policing of the event, included to provide a lawful and proportionate policing response to protest, balancing the needs and rights of protesters with those impacted by the protest and to maintain public order.
The same aims were reflected in tactical operational plans prepared by subordinate commanders.
The four appellants were part of a larger group of claimants, but it was agreed before the Court of Appeal that their cases should be treated as test cases.
They were arrested in separate incidents at various places in central London on the grounds that their arrest was reasonably believed by the arresting officers to be necessary to prevent an imminent breach of the peace.
They were taken to four different police stations and later released without charge, once the wedding was over and the police considered that the risk of a breach of the peace had passed.
Their periods of custody ranged from about 2 hours to 5 hours.
The power of the police, or any other citizen, to carry out an arrest to prevent an imminent breach of the peace is ancient, but it remains as relevant today as in times past.
The leading domestic authorities on the subject are the decisions of the House of Lords in Albert v Lavin [1982] AC 546 and R (Laporte) v Chief Constable of Gloucestershire Constabulary [2007] 2 AC 105.
There are important safeguards for the citizen, in order to prevent breach of the peace powers from becoming a recipe for officious and unjustified intervention in other peoples affairs (in Lord Rodgers words in Laporte, at para 62).
The essence of a breach of the peace is violence.
The power to arrest to prevent a breach of the peace which has not yet occurred is confined to a situation in which the person making the arrest reasonably believes that a breach of the peace is likely to occur in the near future (quoting again from Lord Rodger in Laporte, at para 62).
And even where that is so, there may be other ways of preventing its occurrence than by making an arrest; there is only a power of arrest if it is a necessary and proportionate response to the risk.
The Administrative Court rejected the broad complaint that the police adopted an unlawful policy for the policing of the royal wedding.
After close examination of the facts of the individual arrests, it also held that the arresting officers had good grounds to believe that the arrests were necessary in order to prevent the likelihood of an imminent breach of the peace.
It dismissed as unrealistic the argument that lesser measures would have been adequate to meet the degree of risk.
Continuous police supervision was not a feasible option, given the many demands on police resources.
The claims that the police acted unlawfully as a matter of domestic law therefore failed.
Article 5
The appellants also alleged that their detention violated their rights under article 5 of the European Convention on Human Rights, and on this issue alone they were given permission to appeal to the Court of Appeal and subsequently to this court.
The material parts of article 5 for present purposes are the following: 1.
Everyone has the right to liberty and security of person.
No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: the lawful arrest or detention of a person for non (b) compliance with the lawful order of a court or in order to secure the fulfilment of any obligation prescribed by law; (c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so; 3.
Everyone arrested or detained in accordance with the provisions of paragraph 1(c) of this Article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. 4.
Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. 5.
Everyone who has been the victim of arrest or detention in contravention of the provisions of this Article shall have an enforceable right to compensation.
Decision of the Administrative Court
The Administrative Court interpreted the phrase effected for the purpose of bringing him before the competent legal authority in article 5.1(c) as limited in its application to the words immediately following it, that is, for the purpose of bringing the person concerned before the court on reasonable suspicion of having committed an offence, and not applying where the purpose of the arrest was to prevent the commission of an offence.
The court considered that this was the more natural reading of the wording, and that the Strasbourg case law on the point was inconclusive.
For the purposes of the Convention a breach of the peace counts as an offence, despite it not being classified as an offence under English law: Steel v United Kingdom (1998) 28 EHRR 603, paras 46 to 49.
The Administrative Court therefore concluded that the arrests conformed with article 5.1(c).
The police also relied on the wording of article 5.1(b).
Richards LJ commented that that the wording seemed ill suited on its face to cover arrest and detention for the purpose of preventing a future, albeit imminent, breach of the peace, but that it was unnecessary for the court to decide the point and better not to do so: para 187.
Decision of the Court of Appeal
The Court of Appeal agreed with the decision of the Administrative Court in a judgment given by Maurice Kay LJ, [2014] 1 WLR 2152, but not with its reasoning.
The Court of Appeal was strongly influenced by the judgment of the Strasbourg court in Ostendorf v Germany (2013) 34 BHRC 738, which post dated the decision of the Administrative Court.
The Court of Appeal held that it was well established in the Strasbourg jurisprudence that the words for the purpose of bringing him before the competent legal authority govern all the limbs of article 5.1(c) and that English courts should accept that interpretation.
However, it declined to follow the majority view in Ostendorf that article 5.1(c) was incapable of authorising purely preventive detention, notwithstanding the existence of good grounds to believe an offence to be imminent, and that the person concerned must be suspected of having already committed a criminal offence.
On the facts, the Court of Appeal concluded that it was an irresistible inference that the officers who arrested and detained the [appellants] appreciated that, if only by reference to domestic law, the [appellants] could not be lawfully detained beyond the point at which it was reasonably practicable to take them before the magistrates court: para 85.
The court also inferred that as things were in central London on the day of the royal wedding it would not have been practicable to take the appellants before a magistrates court before they were released, but that they would have been taken to court if the situation had deteriorated to the extent that it was necessary to continue their detention to a point in time when it would have been practicable to do so.
The court therefore concluded that that the appellants were arrested and detained for the purpose of bringing [them] before the competent legal authority, if that were to become necessary, so as to prolong their detention on a lawful basis: para 86.
As to article 5.1(b), the Court of Appeal observed that the decision of the majority in Ostendorf had strengthened the argument advanced by the police (para 90), but considered it unnecessary to reach a conclusion on that issue.
The appellants argue that the Court of Appeal was wrong not to follow the interpretation of article 5.1(c) by the Strasbourg court in Ostendorf, and that the process of reasoning by which the Court of Appeal arrived at its finding that the appellants were detained for the purpose of bringing them before the court was artificial and contrived.
They submit that it was plain from the evidence as a whole that the purpose of the appellants arrest and detention was purely preventive.
They also submit that article 5.1(b) was not applicable even on the approach taken by the court in Ostendorf.
The police argue that the Court of Appeal was right to hold that there was a contingent purpose to bring the appellants before the court sufficient to satisfy the requirements of article 5.1(c) and that the appellants detention was also justified under article 5.1(b).
Strasbourg case law
Lawless v Ireland (No 3) (1961) 1 EHRR 15 concerned the internment without trial of IRA members by the Irish government.
The applicant was detained for five months, without being brought before a judge, under legislation which gave to ministers special powers of detention without trial, whenever the government published a proclamation that the powers were necessary to secure the preservation of peace and order.
The government argued that such detention was permitted by the second limb of article 5.1(c), which was not qualified by the words for the purpose of bringing him before the competent legal authority and therefore was also not within article 5.3.
The court rejected this argument, noting that in the French text there is a comma after the passage up to for the purpose of bringing him before the competent legal authority (en vue dtre conduit devant lautorit judiciaire comptente), meaning that this passage qualifies all the categories after the comma.
The court also said (at para 14) that the governments interpretation would permit the arrest and detention of a person suspected of an intent to commit an offence for an unlimited period on the strength merely of an executive decision, and that this, with its implications of arbitrary power, would lead to conclusions repugnant to the fundamental principles of the Convention.
I interpose that two linked points are important to note: the reference to the potential for unlimited detention without judicial oversight and the fundamental objectionableness of arbitrary detention.
The court held that the expression effected for the purpose of bringing him before the competent legal authority qualified every category of arrest or detention referred to in article 5.1(c), and the clause therefore permitted deprivation of liberty only when such deprivation is effected for the purpose of bringing the person arrested or detained before the competent judicial authority, irrespective of whether such person is a person who is reasonably suspected of having committed an offence, or a person whom it is reasonably considered necessary to restrain from committing an offence, or a person whom it is reasonably considered necessary to restrain from absconding after having committed an offence.
The court further held that the purpose of bringing the person before the court might, depending on the circumstances, be either for the purpose of examining the question of deprivation of liberty or for the purpose of deciding on the merits (para 14).
In Brogan v United Kingdom (1988) 11 EHRR 117, the four applicants were arrested and detained under prevention of terrorism legislation on suspicion of being concerned in the commission, preparation or instigation of acts of terrorism.
They were released without charge after periods between four and six days and without having been brought before a magistrate.
The court held that in each case there had been a violation of article 5.3 but not article 5.1.
The court accepted that there was an intention to bring them before a court if sufficient and usable evidence had been obtained during the police investigation following their arrest, and that this was sufficient to satisfy the requirement in article 5.1(c) that the detention was for the purpose of bringing them before the court.
There was no reason to believe that the police investigation was not in good faith or that their detention was for any other reason than to further the investigation by confirming or dispelling the suspicions which grounded their arrest.
In other words, the police were not required to intend to take the applicants to court in the event of there being insufficient evidence after investigation to proceed against them.
In Jecius v Lithuania (2000) 35 EHRR 16, the applicant complained of violation of his article 5 rights in successive periods of detention.
The first period of five weeks was under a broad provision of the criminal code which permitted preventive detention in connection with banditry, criminal association or terrorising a person.
During that period no investigation was carried out and no charge was made.
In holding that preventive detention of the kind found in that case was not permitted by article 5.1(c), the court stated that a person may be detained under that clause only in the context of criminal proceedings for the purpose of bringing him before the competent legal authority on suspicion of his having committed an offence (para 50).
However, as the Court of Appeal observed in this case (para 61), that was plainly not a complete statement of article 5.1(c).
Nicol and Selvanayagam v United Kingdom, (Application No 32213/96) 11 January 2001, provides an example of a case where the court recognised that article 5.1(c) embraces different sets of circumstances.
The applicants took part in an anti fishing protest at an angling match on 28 May 1994.
Their aim was to sabotage the match by throwing twigs in the water close to the anglers hooks so as to disturb the surface, while other protestors sounded horns to frighten the fish.
When they refused to stop, they were arrested.
The custody record gave the reason for their initial detention as to allow a period of calming, and to determine method of processing.
They were later kept in custody in order to take them before the magistrates for the purpose of being bound over to keep the peace.
The court found that their complaint under article 5.1 was manifestly unfounded.
It said that their initial detention was to prevent them from committing an offence and their continued detention was for the purpose of bringing them before the court on suspicion of having committed an offence.
Both the initial arrest and their subsequent detention were therefore compatible with article 5.1(c).
Most recently, Ostendorf raised parallel issues to those in the present case.
The applicant was known to the police as a suspected football hooligan and gang leader.
He travelled by train from Bremen to Frankfurt to attend a match with 30 to 40 other fans, most of whom were known to the police and considered to be hooligans prepared to use violence.
The group went under police surveillance to a pub.
They were told that they would be escorted to the football ground and that any member leaving the group would be arrested.
At the pub the applicant was seen talking to a member of a rival hooligan group.
He remained in the pub when the rest of his group left and was discovered by the police hidden in a locked cubicle in the ladies bathroom.
He gave no plausible explanation why he was there.
The police reasonably concluded that he was trying to evade police surveillance and that he was planning violence.
He was arrested under public security legislation which permitted the police to take a person into custody if necessary to prevent the imminent commission of a criminal or regulatory offence of considerable importance to the general public.
He was taken to a police station and released one hour after the game finished, when it was considered that the risk of violence had passed.
He complained that his arrest and detention violated his rights under article 5.
The Strasbourg court (Fifth Section) unanimously rejected his complaint.
The following paragraph in the leading judgment merits citation in full, not only because it states a central principle but also because it has a direct resonance in the present case: 88.
The court is aware of the importance, in the German legal system, of preventive police custody in order to avert dangers to the life and limb of potential victims or significant material damage, in particular, in situations involving the policing of large groups of people during mass events It reiterates that article 5 cannot be interpreted in such a way as to make it impracticable for the police to fulfil their duties of maintaining order and protecting the public provided that they comply with the underlying principle of article 5, which is to protect the individual from arbitrariness (see Austin v UK (2012) 32 BHRC 618 at para 56).
The court was divided on how to implement that principle.
The majority held that the applicants detention was permitted under article 5.1(b) but not under article 5.1(c).
Conversely, the minority were for holding that it was permitted under article 5.1(c) but not under article 5.1(b).
As to article 5.1(c), the majority held (at paras 82 to 86) that the second part (when it is reasonably considered necessary to prevent his committing an offence) only covers pre trial detention, and not custody for preventive purposes without the person concerned being suspected of having already committed an offence.
Moreover, it held that the purpose of bringing the person before a court must be for the purpose of trial, and not just for the purpose of determining the legality of his preventive detention.
The majority sought to answer the governments argument that on this analysis the second part would add nothing to the first, saying that it was not superfluous since it could cover the detention of a person who had already committed preparatory acts which were themselves punishable in order to prevent him from going on to commit the full offence.
However, that does not fully meet the point, for in the hypothetical case postulated by the majority the applicant would already be suspected of having committed an offence, for which he could be detained under the first part of article 5.1(c).
The minority (Judges Lemmens and Jaderblom) considered that the case law to the effect that preventive detention under article 5.1(c) was permissible only in the context of criminal proceedings, for the purpose of bringing [a person] before the competent legal authority on suspicion of his having committed an offence (Jecius v Lithuania at para 50), derogated without any specific explanation from what the court stated in Lawless, and that it went too far.
In Lawless the court recognised that article 5.1(c) covered three different types of situation.
The judgment in Lawless stated (para 14) that the clause had to be construed in conjunction with article 5.3, with which it formed a whole; and that the obligation to bring a person arrested or detained in any of the circumstances contemplated by article 5.1(c) was for the purpose of examining the question of deprivation of liberty or for the purpose of deciding on the merits.
The minority in Ostendorf said that later case law had unduly restricted the purpose of bringing the detainee before the court to deciding on the merits and had done away with the possible purpose of examining the question of deprivation of liberty.
They favoured returning to Lawless, which did more justice to prevention as a possible justification for a deprivation of liberty than the interpretation followed by the majority.
They said at para 5 of their judgment: An early, prompt release, without any appearance before a judge or judicial officer, may occur frequently in cases of administrative detention for preventive purposes.
Even so, in such a situation it will be enough for the purpose of guaranteeing the rights inherent in article 5 of the convention if the lawfulness of the detention can subsequently be challenged and decided by a court.
Applying that approach to the facts, the minority said that the applicant was detained in order to prevent a brawl in connection with a football match.
They were of the opinion that the police, faced with the situation of a large football event with the assembly of many aggressive supporters in which the applicant appeared and, as assessed by the authorities, planned to instigate fights, could reasonably consider it necessary to arrest and detain him.
He was detained for approximately four hours.
It did not appear that this period exceeded what was required in order to prevent the applicant from fulfilling his intentions.
For those reasons they concluded that his arrest and detention were justifiable under article 5.1(c).
As to article 5.1(b), it is well established in the Strasbourg case law that an obligation prescribed by law within the meaning of the paragraph must be concrete and specific and that a general obligation to comply with the criminal law will not suffice: see, for example, Schwabe v Germany (2011) 59 EHRR 28, paras 70 and 73.
The majority found that the requirement of specificity was satisfied on the facts because the obligation whose fulfilment was secured by the applicants detention was not to arrange a brawl between Bremen and Frankfurt hooligans in the hours before, during and after the football match in the vicinity of Frankfurt.
In the case of a negative obligation, it was necessary and sufficient to show that the applicant had taken clear and positive steps which indicated that he would not fulfil the obligation.
For this purpose it was necessary that the person concerned was made aware of the specific act which he or she was to refrain from committing, and that the person showed himself or herself not willing to refrain from doing so (as the applicant had done by ignoring a police warning).
They added that in the case of a duty not to commit a specific offence at a certain time and place, the obligation must be considered as having been fulfilled for the purposes of article 5.1(b) at the latest at the time when it ceased to exist by lapse of the time at which the offence at issue was to take place.
Judges Lemmens and Jaderblom disagreed, because the legislation under which the applicant was arrested did not specify any obligation which he failed to fulfil.
Although the police specifically ordered him to stay with his group of fans, the statutory obligation not to commit criminal or regulatory offences was in the view of the minority too general for the purpose of article 5.1(b).
The cases on the subject all concerned obligations to perform specific acts.
Things might have been different if the applicant had been the subject of a specific banning order, but that was not the case.
His only legal obligation was the general obligation not to commit certain crimes or regulatory offences.
That general obligation did not become specific and concrete merely because he was reminded of it in the context of a specific football match.
Analysis
The fundamental principle underlying article 5 is the need to protect the individual from arbitrary detention, and an essential part of that protection is timely judicial control, but at the same time article 5 must not be interpreted in such a way as would make it impracticable for the police to perform their duty to maintain public order and protect the lives and property of others.
These twin requirements are not contradictory but complementary, and this is reflected in the statement in Ostendorf cited at para 22 above.
In balancing these twin considerations it is necessary to keep a grasp of reality and the practical implications.
Indeed, this is central to the principle of proportionality, which is not only embedded in article 5 but is part of the common law relating to arrest for breach of the peace.
In Austin v Commissioner of Police of the Metropolis [2009] 1 AC 564 Lord Hope made the point at para 34: I would hold that there is room, even in the case of fundamental rights as to whose application no restriction or limitation is permitted by the Convention, for a pragmatic approach to be taken which takes full account of all the circumstances.
No reference is made in article 5 to the interests of public safety or the protection of public order as one of the cases in which a person may be deprived of his liberty But the importance that must be attached in the context of article 5 to measures taken in the interests of public safety is indicated by article 2 of the Convention, as the lives of persons affected by mob violence may be at risk if measures of crowd control cannot be adopted by the police.
This is a situation where a search for a fair balance is necessary if these competing fundamental rights are to be reconciled with each other.
The ambit that is given to article 5 as to measures of crowd control must, of course, take account of the rights of the individual as well as the interests of the community.
So any steps that are taken must be resorted to in good faith and must be proportionate to the situation which has made the measures necessary.
In this case there was nothing arbitrary about the decisions to arrest, detain and release the appellants.
They were taken in good faith and were proportionate to the situation.
If the police cannot lawfully arrest and detain a person for a relatively short time (too short for it to be practical to take the person before a court) in circumstances where this is reasonably considered to be necessary for the purpose of preventing imminent violence, the practical consequence would be to hamper severely their ability to carry out the difficult task of maintaining public order and safety at mass public events.
This would run counter to the fundamental principles previously identified.
There is, however, a difficult question of law as to how such preventive power can be accommodated within article 5.
The Strasbourg case law on the point is not clear and settled, as is evident from the division of opinions within the Fifth Section in Ostendorf.
Moreover, while this court must take into account the Strasbourg case law, in the final analysis it has a judicial choice to make.
The view of the minority in Ostendorf, that article 5.1(c) is capable of applying in a case of detention for preventive purposes followed by early release (that is, before the person could practicably be brought before a court), is in my opinion correct for a number of reasons.
In the first place I agree with the Administrative Court that the situation fits more naturally within the language of article 5.1(c) than 5.1(b).
On its plain wording article 5.1(c) covers three types of case, the second being when the arrest or detention of a person is reasonably considered necessary to prevent his committing an offence.
There is force in the argument that the interpretation adopted by the majority in Ostendorf collapses the second into the first (reasonable suspicion of having committed an offence) and is inconsistent with Lawless.
It is accepted by the police that English courts should treat Lawless as authoritative, but in that case the court was not concerned with a situation in which the police had every reason to anticipate that the risk necessitating the persons arrest would pass in a relatively short time and there was every likelihood of it ending before the person could as a matter of practicality be brought before a court.
It would be perverse if it were the law that in such circumstances, in order to be lawfully able to detain the person so as to prevent their imminently committing an offence, the police must harbour a purpose of continuing the detention, after the risk had passed, until such time as the person could be brought before a court with a view to being bound over to keep the peace in future.
This would lengthen the period of detention and place an unnecessary burden on court time and police resources.
Some analogy may be drawn with Brogan, in which the court rejected the argument that at the time of the arrest the police must intend to take the arrested person before the court willy nilly, regardless of whether on investigation there was cause to do so.
In order to make coherent sense and achieve the fundamental purpose of article 5, I would read the qualification on the power of arrest or detention under article 5.1(c), contained in the words for the purpose of bringing him before the competent legal authority, as implicitly dependent on the cause for detention continuing long enough for the person to be brought before the court.
I agree therefore with Judges Lemmens and Jederblom in para 5 of their judgment in Ostendorf (cited at para 25 above) that in the case of an early release from detention for preventive purposes, it is enough for guaranteeing the rights inherent in article 5 if the lawfulness of the detention can subsequently be challenged and decided by a court.
I prefer to put the matter that way, rather than as the Court of Appeal did by inferring the existence of a conditional purpose ab initio to take the appellants before the court, although it makes no difference to the result.
I have no disagreement with the Court of Appeal that the appellants would have been brought before a court to determine the legality of their continued detention, if it had been considered necessary to detain them long enough for this to happen.
The case would then have been materially similar to Nicol and Selvanayagam, where the applicants initial detention was preventive and they were later kept in custody and brought before the court to be bound over.
It would be contrary to the spirit and underlying objective of article 5 if the appellants early release placed them in a stronger position to complain of a breach of article 5 than if it had been decided to detain them for longer in order to take them before magistrates to be bound over.
As to article 5.1(b), I am inclined to the same view as the minority in Ostendorf that the obligation has to be much more specific than a general obligation not to commit a criminal offence (or, in this case, a breach of the peace), and that such a general obligation does not acquire the necessary degree of specificity by focusing narrowly on the particular facts or by the person concerned being given a reminder of it in specific circumstances.
There are also practical considerations.
The police may find it necessary to take action to prevent an imminent breach of the peace in circumstances where there is not sufficient time to give a warning.
An example might be a football match where two unruly groups collide and the police see no alternative but to detain them, or the ringleaders on both sides, immediately for what may be quite a short time.
In summary, I would be concerned that in stretching article 5.1(b) beyond its previously recognised ambit the majority found it necessary to impose limitations which in another case might leave the police effectively powerless to step in for the protection of the public.
Conclusion
I would uphold the decision of the lower courts that the appellants arrests and detention were lawful under article 5.1(c) and dismiss the appeals.

Output:
This appeal concerns the arrest and detention of four individuals on 29 April 2011, the day of the wedding of the Duke and Duchess of Cambridge.
The appellants were part of a larger group of claimants but it was agreed before the Court of Appeal that their cases should be treated as test cases [1, 3].
The appellants were arrested in separate incidents at various places in central London on the grounds that their arrest was reasonably believed to be necessary to prevent an imminent breach of the peace.
They were all released without charge once the wedding was over and the police considered the risk of a breach of the peace had been passed.
Their period of custody ranged from 2.5 to 5.5 hours [3].
Complaints regarding the lawfulness of the policy for the policing of the royal wedding and the grounds for, and necessity of, the appellants arrest were dismissed by the Administrative Court and these issues were not in dispute on appeal [5].
The appellants also alleged that their detention violated their rights under article 5 of the European Convention on Human Rights which provides that no one shall be deprived of their liberty save in the certain specific circumstances provided for in subsection (1).
The police argued that the appellants detention was lawful under article 5(1)(b), which allows for the lawful detention of a person in order to secure the fulfilment of any obligation prescribed by law, or under article 5(1)(c), which allows for the detention of a person for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so.
For the purposes of article 5 a breach of the peace counts as an offence, despite not being classified as an offence under English law [8].
The Administrative Court found that the appellants arrest and detention were lawful under article 5(1)(c).
It interpreted the phrase effected for the purpose of bringing him before the competent legal authority as applicable only where the purpose of the arrest was to bring the person before the court on reasonable suspicion of having committed an offence and not where the purpose of the arrest was to prevent a commission of an offence [8].
It felt it was therefore unnecessary to determine whether the arrest was lawful under article 5(1)(b) [9].
The Court of Appeal agreed but for different reasons.
In light of the decision of the Strasbourg court in Ostendorf v Germany (2015) 34 BHRC 738, which post dated the decision of the Administrative Court, it read the phrase effected for the purpose of bringing him before the competent legal authority as applying to the whole of article 5(1)(c).
However, it inferred that the officers who arrested and detained the appellants appreciated the appellants would not be lawfully detained beyond the point at which it was reasonably practicable to take them before the magistrates court.
The appellants had therefore been arrested and detained with the intention of bringing them before the competent legal authority within the meaning of article 5.1(c) [11].
The Supreme Court unanimously dismisses the appeal.
Lord Toulson, with whom the other Justices agree, gives the lead judgment.
The fundamental principle underlying article 5 is the need to protect the individual from arbitrary detention, and an essential part of that protection is timely judicial control.
However, article 5 must not be interpreted in such a way as would make it impracticable for the police to perform their duty to maintain public order and protect the lives and property of others [29].
An appreciation of the reality and practical implications is central to the principle of proportionality embedded in both article 5 and in the common law relating to arrest for breach of the peace [30].
The ability of the police to perform their duty would be severely hampered if they could not lawfully arrest and detain a person for a relatively short time (too short for it to be practical to take the person before a court) [31].
The Strasbourg case law on how such a preventative power can be accommodated within article 5 is not clear and settled and the Strasbourg court in Ostendorf was divided.
Whilst the Supreme Court must take into account the Strasbourg case law, the final decision is the Courts [32].
The Court prefers the view of the minority of the Strasbourg court in Ostendorf that article 5(1)(c) is capable of applying to a case of detention for preventive purposes followed by early release [33].
It would be perverse if the law was such that in order to be lawfully able to detain a person so as to prevent their imminent commission of an offence, the police must harbour a purpose of continuing the detention, after the risk has passed, until such time as the person could be brought before a court with a view to being bound over to keep the peace in the future.
This would lengthen the period of detention and place an unnecessary burden on police resources [36].
Rather, Lord Toulson reads the phrase for the purpose of bringing him before the competent legal authority as implicitly dependent on the cause for detention continuing long enough for the person to be brought before the court.
Early release from detention for preventive purpose will not breach article 5 if the lawfulness of the detention can subsequently be challenged and decided by a court [38].
In respect of article 5(1)(b), the Court also prefers the view of the minority in Ostendorf.
A general obligation not to commit a criminal offence or, in this case, a breach of the peace, is not an obligation prescribed by law for the purposes of article 5(1)(b) as it is not concrete or specific enough.
Such a general obligation does not acquire the necessary degree of specificity by focusing narrowly on the particular facts or by the person concerned being given a reminder of it in specific circumstances.
The police may be required to take action to prevent an imminent breach of the peace where there is insufficient time to give a warning [27, 40].


Input:
Counsel for the respondent, Jonathan Crow QC, boldly asserted at the outset of his submissions that this case is in fact bristling with simplicity.
The issue is certainly a simple one.
The claim is brought by a company (through its liquidators) against its investment bank and broker for breach of the so called Quincecare duty of care.
In Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363, Steyn J held that it was an implied term of the contract between a bank and its customer that the bank would use reasonable skill and care in and about executing the customers orders; this was subject to the conflicting duty to execute those orders promptly so as to avoid causing financial loss to the customer; but there would be liability if the bank executed the order knowing it to be dishonestly given, or shut its eyes to the obvious fact of the dishonesty, or acted recklessly in failing to make such inquiries as an honest and reasonable man would make; and the bank should refrain from executing an order if and for so long as it was put on inquiry by having reasonable grounds for believing that the order was an attempt to misappropriate funds.
The issue in this case is whether such a claim is defeated if the companys instructions were given by the companys Chairman and sole share holder who was the dominant influence over the affairs of the company.
Can his fraud be attributed to the company? And if so, is the claim then defeated, whether on grounds of illegality, of causation, or by an equal and opposite claim against the company in deceit?
The background
The respondent company, Singularis, is a company registered in the Cayman Islands, set up to manage the personal assets of a Saudi Arabian business man, Maan Al Sanea, separately from his business group.
At all times material to this claim, Mr Al Sanea was its sole shareholder, a director and also its chairman, president and treasurer.
There were six other directors, who were reputable people, but did not exercise any influence over the management of the company.
Very extensive powers were delegated to Mr Al Sanea to take decisions on behalf of the company, including signing powers over the companys bank accounts.
The company had a substantial and legitimate business, carried out over a number of years before the relevant events, for which it borrowed substantial sums of money under a variety of funding arrangements.
The appellant, Daiwa, is the London subsidiary of a Japanese investment bank and brokerage firm.
In 2007, it entered into a stock financing arrangement with Singularis.
Daiwa provided Singularis with loan financing to enable it to purchase shares which were the security for the repayment of the loan.
In June 2009, all the shares were sold, the loan was repaid, and Daiwa was left holding a cash surplus for the account of Singularis.
Together with a sum of US$80m deposited by Singularis in June 2009, the total held to Singularis account was approximately US$204m.
Between 12 June and 27 July 2009, Daiwa was instructed by Singularis to make eight payments, totalling approximately US$204,500,000, out of the money held to Singularis account.
Five of those payments were to the Saad Specialist Hospital Company.
Three of them were to or for the benefit of Saad Air (A320 No 2) Ltd and Saad Air (A340 600) Ltd (together, Saad Air).
Those instructions were given with the approval of Mr Al Sanea who, as between Singularis and Daiwa, had authority to give instructions to make the payments.
Daiwa made those payments.
The judge held that each of the payments was indeed a misappropriation of Singularis funds because there was no proper basis for any of them.
There has been no appeal against that finding.
On 20 August 2009, Mr Al Sanea placed Singularis in voluntary liquidation.
On 18 September 2009 the Grand Court of the Cayman Islands made a compulsory winding up order and joint liquidators were appointed.
On 18 July 2014, Singularis, acting through its joint liquidators, brought a claim against Daiwa for the full amount of the payments (less any sums recovered either from Mr Al Sanea or the recipients of the payments).
There were two bases for the claim: (1) dishonest assistance in Mr Al Saneas breach of fiduciary duty in misapplying the companys funds; and (2) breach of the Quincecare duty of care to the company by giving effect to the payment instructions.
In the Chancery Division of the High Court, Rose J dismissed the dishonest assistance claim because Daiwas employees had acted honestly.
However, she upheld the negligence claim, while making a deduction of 25% under the Law Reform (Contributory Negligence) Act 1945 to reflect the contributory fault of Mr Al Sanea and the companys inactive directors, for which the company was responsible: [2017] EWHC 257 (Ch); [2017] Bus LR 1386.
Singularis did not appeal against the dismissal of the dishonest assistance claim.
Daiwa did appeal against the finding of liability on the negligence claim.
The Court of Appeal unanimously dismissed the appeal: [2018] EWCA Civ 84; [2018] 1 WLR 2777.
In brief, it held (1) that Mr Al Saneas fraudulent state of mind could not be attributed to the company; but (2) even if it could, the claim would still have succeeded the banks negligence had caused the loss, it was not defeated by a defence of illegality, or by an equal and opposite claim by the bank for the companys deceit; and (3) the judges finding of 25% contributory negligence was a reasonable one.
Daiwa now appeals to this Court on the question of attribution and its consequences.
Two broad issues arise. (1) When can the actions of a dominant personality, such as Mr Al Sanea, who owns and controls a company, even though there are other directors, be attributed to the company? (2) If they are attributed to the company, is the claim defeated (i) by illegality; (ii) by lack of causation because the banks duty of care does not extend to protecting the company from its own wrongdoing or because the company did not rely upon its performance; or (iii) by an equal and countervailing claim in deceit?
The starting point
The starting point must be the judges findings, none of which is under appeal.
She held that there was no good reason to make the payments to Saad Air and that it was a breach of fiduciary duty for Mr Al Sanea to direct Singularis to make them (para 120).
She also held that the agreement made between Singularis and the hospital to pay the expenses of the hospital was a sham and the five payments were a misappropriation of the companys money by Mr Al Sanea in breach of his fiduciary duty (paras 121 127).
As sole shareholder he was not entitled to ratify the misappropriation of company funds because he must have known that the company was on the verge of insolvency and his duty as director was to act in the best interests of the companys creditors.
This precluded making gratuitous payments to other companies in the Saad group to the detriment of Singularis creditors (paras 128 137).
She went on to hold that Daiwa was in breach of the Quincecare duty on the facts of the case.
Any reasonable banker would have realised that there were many obvious, even glaring, signs that Mr Al Sanea was perpetrating a fraud on the company.
He was clearly using the funds for his own purposes and not for the purpose of benefiting Singularis (para 192).
First, Daiwa was well aware of the dire financial straits in which Mr Al Sanea and the Saad group found themselves at the end of May and in early June 2009 (paras 193 196).
Second, it was aware that Singularis might have other substantial creditors with an interest in the money (para 197).
Third, there was plenty of evidence to put Daiwa on notice that there was something seriously wrong with the way that Mr Al Sanea was operating the Singularis account (para 199).
Fourth, it was alive to the possibility that the agreement with the hospital was a front or a cover rather than a genuine obligation (para 200).
Fifth, there was a striking contrast between the way in which some payment requests were processed and how the disputed payments were handled (para 201).
In short Everyone recognised that the account needed to be closely monitored But no one in fact exercised care or caution or monitored the account themselves and no one checked that anyone else was actually doing any exercising or monitoring either (para 202).
On the basis of those findings, the judge held that there was a clear breach of Daiwas Quincecare duty of care to Singularis.
That is incontrovertible.
The issue for this Court, as in the courts below, is whether Daiwa has any defence to that claim.
The issue of attribution has to be seen in the context of the possible defences to which it might give rise.
Were attribution to be established, Daiwa raises three possible defences.
It is worth giving a brief account of each of these before turning to the question of attribution.
It will be seen that, even if attribution were established, none of them is a very promising basis for denying liability.
Illegality
Both the judge and the Court of Appeal rejected the illegality defence raised by Daiwa on two grounds: first, that Mr Al Saneas fraud could not be attributed to the company ie held to be the companys fraud for this purpose (Rose J, paras 208 to 215; CA, paras 50 to 60); and second, in any event, the test for a successful illegality defence, laid down by this Court in Patel v Mirza [2016] UKSC 42; [2017] AC 467, was not met (Rose J, paras 216 to 220; CA, paras 61 to 67).
Patel v Mirza was a restitution claim.
Mr Patel agreed to pay 620,000 to Mr Mirza on the basis that Mr Mirza would use it to bet on the price of shares using inside information that Mr Mirza expected to receive.
This was a conspiracy to commit the offence of insider dealing contrary to section 52 of the Criminal Justice Act 1993.
However, the inside information was not forthcoming and the bets were never placed.
Mr Patel asked for his money back and Mr Mirza refused.
He argued that the claim was barred by illegality because Mr Patel would have to prove the illegal agreement under which the money was paid in order to prove that the purpose had failed and he should get it back.
A panel of nine Supreme Court Justices was convened to hear the appeal, because of the perceived conflict between the decisions of this Court in Hounga v Allen [2014] UKSC 47; [2014] 1 WLR 2889, Les Laboratoires Servier v Apotex Inc [2014] UKSC 55; [2015] AC 430, and Bilta (UK) Ltd v Nazir (No 2) [2015] UKSC 23; [2016] AC 1.
By a majority of six to three, the Court rejected the approach of the House of Lords in Tinsley v Milligan [1994] 1 AC 340, which depended on whether or not the claimant had to plead the illegal agreement in order to succeed.
Instead it adopted the approach summed up by Lord Toulson, who gave the leading judgment, at para 120: The essential rationale of the illegality doctrine is that it would be contrary to the public interest to enforce a claim if to do so would be harmful to the integrity of the legal system In assessing whether the public interest would be harmed in that way, it is necessary (a) to consider the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim, (b) to consider any other relevant public policy on which the denial of the claim may have an impact and (c) to consider whether denial of the claim would be a proportionate response to the illegality, bearing in mind that punishment is a matter for the criminal courts.
In that case, it was not contrary to the public interest to allow Mr Mirza to recover the money which he had paid for an illegal purpose but which had not been used for that purpose.
In wanting it back he was seeking to unwind the arrangement, not to profit from it.
In this case, the illegality relied on was, in relation to some of the payments, Mr Al Saneas provision of documents which he knew to be false and, in relation to all of the payments, his breach of his fiduciary duty towards Singularis.
The judge held that the purpose of the prohibition of breach of fiduciary obligation was to protect the company from becoming the victim of the wrongful exercise of power by officers of the company.
That purpose would certainly not be enhanced by preventing the company from getting back the money which had been wrongfully removed from its account.
The purpose of the prohibition of making false statements was both to protect the bank from being deceived and the company from having its funds misappropriated.
Although the purpose of protecting the bank would be enhanced by denial of the claim, that purpose was achieved by ensuring that the bank was only liable to repay the money if the Quincecare duty was breached: that duty struck a careful balance between the interests of the customer and the interests of the bank.
It would not enhance the integrity of the law to undermine that balance by denying the claim on grounds of illegality in a case where, ex hypothesi, the exceptional circumstances needed for the duty to arise and be breached are found to be present. (para 218)
Turning to whether there might be any other relevant public interests, she held that denial of the claim would have a material impact upon the growing reliance on banks and other financial institutions to play an important part in reducing and uncovering financial crime and money laundering.
If a regulated entity could escape from the consequences of failing to identify and prevent financial crime by casting on the customer the illegal conduct of its employees that policy would be undermined (para 219).
Finally, denial of the claim would be an unfair and disproportionate response to any wrongdoing on the part of Singularis.
The possibility of making a deduction for contributory negligence on the customers part enables the court to make a more appropriate adjustment than the rather blunt instrument of the illegality defence (para 220).
The Court of Appeal took the view that there was no error in the judges approach.
Barring Singularis claim would serve to undermine the carefully calibrated Quincecare duty and would not be a proportionate response, particularly where Daiwas breaches were so extensive and the fraud was so obvious (para 66).
Mr John McCaughran QC, who appears for Daiwa, argues that the judge went wrong at each stage of the analysis.
The purpose of the prohibition of deceit is to encourage honest dealing.
The integrity of the legal system is not enhanced by allowing fraudulent companies to recover damages in respect of their fraud.
If this is adequately addressed by the carefully calibrated Quincecare duty, it leaves no room for the application of the illegality defence.
As to the public policy of enlisting banks and financial institutions in the fight against financial crime and money laundering, there already existed important incentives in the regulatory regime for banks and brokers to detect financial crime.
There was no need for a further incentive in the form of a damages claim by the company.
Denying the claim would be a proportionate response to the companys wrongdoing.
Daiwas arguments necessarily depend upon a finding that Mr Al Saneas fraud was the companys fraud, an issue which is discussed later.
But even if it was, in my view the judges conclusion was correct for the reasons she gave.
I should, however, record my reservations about the view expressed by the Court of Appeal as to the role of an appellate court in relation to the illegality defence: that an appellate court should only interfere if the first instance judge has proceeded on an erroneous legal basis, taken into account matters that were legally irrelevant, or failed to take into account matters that were legally relevant (para 65).
Daiwa point out that applying the defence is not akin to the exercise of discretion (citing Lord Neuberger in Patel v Mirza, at para 175) and an appellate court is as well placed to evaluate the arguments as is the trial judge.
It is not necessary to resolve this in order to resolve this appeal and there are cases concerning the illegality defence pending in the Supreme Court where it should not be assumed that this Court will endorse the approach of the Court of Appeal.
Causation
Daiwa argues that, if the fraud is attributed to the company, the companys loss is caused by its own fault and not by the fault of Daiwa.
In Reeves v Comr of Police of the Metropolis [2000] 1 AC 360, at 368, Lord Hoffmann referred to the sound intuition that there is a difference between protecting people against harm caused to them by third parties and protecting them against harm which they inflict upon themselves People of full age and sound understanding must look after themselves and take responsibility for their actions.
This was a case, argues Daiwa, in which the company inflicted the harm upon itself.
Against that, Lord Hoffmann went on to say that This philosophy expresses itself in the fact that a duty to protect a person of full understanding from causing harm to himself is very rare indeed.
But, once it is admitted that this is the rare case in which such a duty is owed, it seems to me self contradictory to say that the breach could not have been a cause of the harm because the victim caused it to himself.
This is just such a case: the purpose of the Quincecare duty is to protect a banks customers from the harm caused by people for whom the customer is, one way or another, responsible.
Hence Mr Crow argues that the loss was caused, not by the dishonesty, but by Daiwas breach of its duty of care.
Had it not been for that breach, the money would still have been in the companys account and available to the liquidators and creditors.
This was not a case where the companys act came after Daiwas breach of duty (unlike Reeves, where the prisoners suicide came after the polices breach of duty).
The fraudulent instruction to Daiwa gave rise to the duty of care which the bank breached, thus causing the loss.
Countervailing claim in deceit
Daiwa argues that because it would have an equal and countervailing claim in deceit against the company, the companys claim in negligence should fail for circularity.
They paid out because of the companys deceit and therefore have a claim against the company for any loss suffered by their exposure to Singularis claim.
This cancels out the companys claim against them for negligence in failing to detect the fraud.
This is a variant of the causation argument and the judge answered it by reference to two decisions of Evans Lombe J in Barings plc v Coopers & Lybrand (No 2) [2002] EWHC 461 (Ch); [2002] 2 BCLC 410 and [2003] EWHC 1319 (Ch); [2003] PNLR 34.
These were proceedings brought by Barings against their auditors for failing to detect the dealings of Mr Nick Leeson which led to the downfall of the bank.
The first decision concerned the allegation of the auditors that they had been deceived by Barings finance director into accepting figures which he knew to be false.
That claim failed on the facts, but had it succeeded, the judge would have held that Barings were vicariously responsible for the deception and this would have defeated the negligence claim.
The second decision concerned the activities of Mr Leeson.
Fraudulent though they were, they did not defeat the banks claim because it was the very duty of the auditors to detect the fraud.
Thus, in this case, the judge held that Daiwa owed Singularis a duty to guard against being misled into paying away Singularis money by just such fraudulent instructions.
Their breach, and not Mr Al Saneas misrepresentations, is the cause of their exposure to the claim for Singularis loss (Rose J, para 228).
Daiwa sought to distinguish Barings on the basis that Barings were merely vicariously liable for Mr Leesons fraud, whereas, if it is right about attribution, in this case the fraud is the fraud of the company itself and not just one of its employees.
The Court of Appeal rejected this argument and upheld the reasoning of the judge: The existence of the fraud was a precondition for Singularis claim based on breach of Daiwas Quincecare duty, and it would be a surprising result if Daiwa, having breached that duty, could escape liability by placing reliance on the existence of the fraud that was itself a pre condition for its liability (CA, para 79).
Attribution
Daiwa argues that, as Singularis was effectively a one man company and Mr Al Sanea was its controlling mind and will, his fraud is to be attributed to the company, with the consequence that its Quincecare claim against Daiwa is defeated, either by illegality, or for lack of causation, or because of an equal and opposite claim for the companys deceit.
To examine such an assertion, it is necessary to go back to basic principles.
The starting point has to be the principle established by the House of Lords in Salomon v A Salomon and Co Ltd [1897] AC 22, that a properly incorporated company has an identity and legal personality quite separate from that of its subscribers, shareholders and directors.
Mr Salomon had established the company, with his family, to buy his boot and shoe manufacturing business at a time when it was solvent.
When it later became insolvent, he was entitled to enforce the debentures granted by the company in part payment of the price and he was not obliged to indemnify the company against the claims of its creditors.
It is also worth recalling the words of Lord Macnaghten, at p 53, that It has become the fashion to call companies of this class one man companies.
That is a taking nickname, but it does not help one much in the way of argument.
Companies being fictional persons, they have of course to act through the medium of real human beings.
So the issue is when the acts and intentions of real human beings are to be treated as the acts and intentions of the company.
The classic exposition is to be found in the Opinion of the Judicial Committee of the Privy Council in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, delivered by Lord Hoffmann.
He identified three levels of attribution (at pp 506 507).
The primary rule is contained in the companys constitution, its articles of association, which will typically say that the decisions of the shareholders or of the board of directors are to be the decision of the company on certain matters.
But this will not cover the whole field of the companys decision making.
For this, the ordinary rules of agency and vicarious liability, which apply to natural persons just as much as to companies, will normally supply the answer.
However there will be some particular rules of law to which neither of these principles supplies the answer.
The question is not then one of metaphysics but of construction of the particular rule in question.
In seeking to establish attribution in this case, Daiwa prays in aid the decision of the House of Lords in Stone & Rolls Ltd v Moore Stephens [2009] UKHL 39; [2009] 1 AC 1391.
The claimant company was owned, controlled and managed by a Mr Stojevic, who had procured the company to engage in frauds upon banks.
The company was sued for deceit by one of the banks and went into liquidation.
The company then brought proceedings against its auditors, alleging that they had been negligent in failing to detect and prevent Mr Stojevics activities.
The auditors applied to strike out the claim on the basis that Mr Stojevics fraud was to be attributed to the company.
The trial judge refused to strike it out, on the basis that such fraud was the very thing that the auditors were employed to detect.
The Court of Appeal held that, as the company had to rely upon the illegality to found its claim, the defence of illegality was made out (this was, of course, before Patel v Mirza).
The House of Lords, by a majority, held that, as Mr Stojevic was the beneficial owner and directing mind and will of the company, knowledge of his fraudulent activities was to be attributed to the company, so the company could not complain that the auditors had failed to detect it.
Lord Mance, dissenting, pointed out that this deprived the companys creditors of a remedy, as it was only the company which could sue the auditors for their negligence.
It appears that what principally divided their lordships was whether the auditors had to have regard to the interests of creditors even though they owed them no duty of care.
Stone & Rolls has prompted much debate and criticism.
It was analysed in detail by a panel of seven Justices of this Court in Bilta (UK) Ltd v Nazir (No 2) [2015] UKSC 23; [2016] AC 1.
The company and its liquidators brought claims against its directors and others who were alleged to have dishonestly assisted the directors in a conspiracy to defraud the company.
The claim was defended on the basis that the fraud of its directors was attributable to the company which could not then make a claim against the other conspirators relying on its own illegality.
This court held unanimously that where a company has been the victim of wrongdoing by its directors, the wrongdoing of the directors cannot be attributed to the company as a defence to a claim brought against the directors and their co conspirators by the companys liquidator for the loss suffered by the company as a result of the wrongdoing.
The court explained that the key to any question of attribution was always to be found in considerations of the context and the purpose for which the attribution was relevant.
Where the purpose was to apportion responsibility between the company and its agents so as to determine their rights and liabilities to one another, the answer might not be the same as where the purpose was to apportion responsibility between the company and a third party.
Stone & Rolls was a case between a company and a third party.
Lords Toulson and Hodge, after analysing the judgments in detail, reached the conclusion (para 154) that it should be regarded as a case which has no majority ratio decidendi.
It stands as authority for the point which it decided, namely that on the facts of that case no claim lay against the auditors, but nothing more.
Lord Sumption identified three points for which it was authority (para 80), but Lord Neuberger, with whom Lord Clarke and Lord Carnwath agreed, agreed with only two of these (para 26).
The first was that an illegality defence cannot be run by a third party against a company where there are innocent shareholders or directors.
The second was that the defence was available, albeit only on some occasions, where there are no innocent directors or shareholders.
Lord Mance agreed with the first of these but as to the second he commented that it appears [to be] a factually correct representation of the outcome of Stone & Rolls, though the present appeal does not raise the correctness in law of that outcome, which may one day fall for reconsideration (para 50).
Subject to the two points with which he agreed, Lord Neuberger said this: [T]he time has come in my view for us to hold that the decision in Stone & Rolls should as Lord Denning MR graphically put it in relation to another case in In re King, decd [1963] Ch 459, 483, be put on one side in a pile and marked not to be looked at again.
Without disrespect to the thinking and research that went into the reasoning of the five Law Lords in that case, and although persuasive points and observations may be found from each of the individual opinions, it is not in the interests of the future clarity of the law for it to be treated as authoritative or of assistance save as already indicated. (para 30)
Unfortunately, the majoritys acceptance of the second point has been treated as if it established a rule of law that the dishonesty of the controlling mind in a one man company could be attributed to the company with the consequences discussed earlier whatever the context and purpose of the attribution in question.
Thus there was much argument in this case about what was meant by innocent directors and whether this included innocent but inactive directors who should have been paying more attention to what Mr Al Sanea was doing.
The judge found that Singularis was not a one man company in the sense that the phrase was used in Stone & Rolls and Bilta (Rose J, para 212).
The company had a board of reputable people and a substantial business.
There was no evidence to show that the other directors were involved in or aware of Mr Al Saneas actions.
There was no reason why they should have been complicit in his misappropriation of the money (para 189).
The Court of Appeal held that, on those findings of fact, she had made no error of law (CA, para 54).
I agree.
But in any event, in my view, the judge was correct also to say that there is no principle of law that in any proceedings where the company is suing a third party for breach of a duty owed to it by that third party, the fraudulent conduct of a director is to be attributed to the company if it is a one man company.
In her view, what emerged from Bilta was that the answer to any question whether to attribute the knowledge of the fraudulent director to the company is always to be found in consideration of the context and the purpose for which the attribution is relevant (para 182).
I agree and, if that is the guiding principle, then Stone & Rolls can finally be laid to rest.
The context of this case is the breach by the companys investment bank and broker of its Quincecare duty of care towards the company.
The purpose of that duty is to protect the company against just the sort of misappropriation of its funds as took place here.
By definition, this is done by a trusted agent of the company who is authorised to withdraw its money from the account.
To attribute the fraud of that person to the company would be, as the judge put it, to denude the duty of any value in cases where it is most needed (para 184).
If the appellants argument were to be accepted in a case such as this, there would in reality be no Quincecare duty of care or its breach would cease to have consequences.
This would be a retrograde step.
Daiwa makes two further arguments essentially policy arguments against this conclusion.
First, it argues that it is odd if the claim of a company arising out of the dishonest activities of its directing mind and will against a negligent auditor fails (as in Stone & Rolls and in Berg Sons & Co Ltd v Adams [1993] BCLC 1045) but a claim against a negligent bank or broker succeeds.
But (quite apart from the difficulties of Stone & Rolls) this ignores the fact that the duties of auditors are different from the duties of banks and brokers.
The auditors duty is to report on the companys accounts to those having a proprietary interest in the company or concerned with its management and control.
If the company already knows the true position (as in Berg) then the auditors negligence does not cause the loss.
Second, Daiwa argues that the law should not treat a company more favourably than an individual.
In Luscombe v Roberts (1962) 106 SJ 373, a solicitors claim against his negligent accountants failed because he knew that what he was doing transferring money from his clients account into his firms account and using it for his own purposes was wrong.
But companies are different from individuals.
They have their own legal existence and personality separate from that of any of the individuals who own or run them.
The shareholders own the company.
They do not own its assets and a sole shareholder can steal from his own company.
I therefore see nothing in those arguments to detract from the conclusion reached that, for the purpose of the Quincecare duty of care, the fraud of Mr Al Sanea is not to be attributed to the company.
However, even if it were, for the reasons given earlier, none of the defences advanced by Daiwa would succeed.
Conclusion
In reaching this conclusion in such short order, I mean no disrespect to the lengthy arguments of counsel or to the impressive judgments in the courts below.
But Mr Crow was correct to say that this case is bristling with simplicity.
A company with a substantial business traded for some years and ran up debts in doing so.
It also had a substantial sum of money standing to its credit, as a result of its legitimate business activities, with its broker bankers.
When it appeared that the company was running into difficulties, its directing mind and sole shareholder fraudulently deprived the company of that money by directing Daiwa to pay it away.
Daiwa should have realised that something suspicious was going on and suspended payment until it had made reasonable enquiries to satisfy itself that the payments were properly to be made.
The company (and through the company its creditors) has been the victim of Daiwas negligence.
This appeal should be dismissed and the judges order should stand.

Output:
An implied term of the contract between a bank and its customer is that the bank owes a duty of care not to execute the customers order if it knows the order to be dishonestly given, or shuts its eyes to obvious dishonesty, or acts recklessly in failing to make inquiries.
This is known as the Quincecare duty of care, following the 1992 case of Barclays Bank plc v Quincecare Ltd. The issue in this appeal is whether a claim against a bank for breach of the Quincecare duty is defeated if the customer is a company, and the fraudulent payment instructions are given by the companys Chairman and sole shareholder who is the dominating influence over the companys affairs.
The respondent company (Singularis) is registered in the Cayman Islands.
It was set up to manage the personal assets of Mr Maan Al Sanea.
He was the sole shareholder, a director and the chairman, president and treasurer.
There were six other directors but they did not exercise any influence over the management of Singularis.
Sole signing powers over the companys bank accounts rested with Mr Al Sanea.
In 2007 the appellant investment bank (Daiwa) provided Singularis with loan financing for the purchase of shares, which were the security for the repayment of the loan.
In June 2009 the shares were sold, the loan was repaid, and Daiwa held a cash surplus of US$204m for the account of Singularis.
Daiwa complied with instructions from Mr Al Sanea to pay out those funds to third parties.
The payments were a misappropriation of Singularis funds and left Singularis unable to meet the demands of its creditors.
On 18 September 2009 the Grand Court of the Cayman Islands made a compulsory winding up order and joint liquidators were appointed.
On 18 July 2014 Singularis brought a claim against Daiwa for the full amount of the payments on the basis of (1) dishonest assistance in Mr Al Saneas breach of fiduciary duty and (2) breach of the Quincecare duty of care to Singularis by giving effect to the payment instructions.
The High Court dismissed the dishonest assistance claim but held there was a clear breach of the Quincecare duty of care to Singularis, with a deduction of 25% by way of contributory negligence.
Daiwas appeal against the finding of liability on the negligence claim was dismissed.
Daiwa appealed to the Supreme Court.
The Supreme Court unanimously dismisses Daiwas appeal and holds that the High Court order should stand.
Lady Hale gives the only substantive judgment.
Daiwa argued that, as Singularis was effectively a one man company, and Mr Al Sanea its controlling mind and will, his fraud should be attributed to the company, with the result that its Quincecare claim against Daiwa should fail for illegality, lack of causation or because of a countervailing claim for deceit [1].
Lady Hale agrees with the judge that whether or not Mr Al Saneas fraud was attributed to the company, those defences would fail in any event [12]: (i) Illegality The illegality relied on by Daiwa was Mr Al Saneas provision of false documents in relation to the payments and his breach of fiduciary duty towards Singularis.
As the judge found, fiduciary duties are intended to protect a company from becoming the victim of the wrongful exercise of power by the companys officers.
That purpose would not be enhanced by preventing the companys recovery of the money wrongfully removed from its account.
The Quincecare duty strikes a careful balance between the interests of the customer and those of the bank and denying the claim would not enhance the integrity of the law [16].
Denial of the claim would undermine the public interest in requiring banks to play an important part in uncovering financial crime and money laundering [17].
It would also be an unfair and disproportionate response to any wrongdoing on the part of Singularis: the power to make a deduction for contributory negligence enables the court to make a more appropriate adjustment [18].
The judges conclusion on this issue was correct, whether or not the fraud was attributed to the company [21]. (ii) Causation Daiwa argued that if the fraud was attributed to the company, its loss was caused by its own fault and not that of the bank.
However, the purpose of the Quincecare duty is to protect the banks customers from harm caused by people for whom the customer is responsible.
The fraudulent instruction to Daiwa gave rise to the duty of care which Daiwa breached, thus causing the loss [23]. (iii) Countervailing claim in deceit This was a variant of the causation argument.
The judge held that Daiwas breach of duty and not Mr Al Saneas misrepresentations was the cause of Daiwas exposure to the claim for Singularis loss [24].
Attribution Mr Al Saneas fraud should not however be attributed to the company for the purposes of the Quincecare claim.
The basic principle was that a properly incorporated company has an identity and legal personality separate from that of its shareholders and directors.
The company has to act through the medium of real human beings but the acts of those persons are only treated as the acts and intentions of the company in circumstances specified by its constitution, or the ordinary rules of agency and vicarious liability, or other particular rules of law [28].
As the judge noted, the answer to any question whether to attribute the knowledge of a fraudulent director to the company is always to be found in consideration of the context and purpose for which the attribution is relevant [34].
The context in this case is the breach of Daiwas Quincecare duty of care.
To attribute the fraud of a trusted agent of the company to the company would denude the duty of any value in cases where it is most needed and be a retrograde step [35].