Primeo Fund (in Official Liquidation) (Appellant) v Bank of Bermuda (Cayman) Ltd and another (Respondents) (Cayman Islands)

Case summary

Case ID

JCPC/2019/0089

Jurisdiction

Cayman Islands

Parties

Appellant(s)

Primeo Fund (in Official Liquidation)

Respondent(s)

Bank of Bermuda (Cayman) Ltd and another

Issue

This appeal concerns claims brought by the appellant, Primeo Fund (In Official Liquidation) (Primeo), against the respondents for breach of their contractual duties. The claims arise in the context of the fraud perpetrated by Bernard Madoff. The Judicial Committee of the Privy Council allowed Primeo's appeal in relation to the application of the reflective loss rule to the extent explained in its judgment dated 9 August 2021. The Board is now asked to decide the remaining issues on Primeo's appeal and also decide the respondents' cross-appeal/additional grounds for upholding the decision below.

Facts

Primeo operated as an open-ended investment fund incorporated in the Cayman Islands. It invested funds with Bernard L Madoff Investment Securities LLC (BLMIS), initially a small proportion of its overall investments, growing over time. From 2003, Primeo also placed a small proportion of investments with BLMIS indirectly through Alpha Prime, a Bermudan-domiciled investment fund. From 2004, Primeo also began investing indirectly via another Cayman-domiciled fund, Herald Fund SPC. On 1 May 2007, Primeo switched its remaining direct investments in BLMIS to an indirect investment through Herald Fund SPC. The respondents acted respectively as Primeo’s administrator and custodian at all relevant times.On 11 December 2008, Bernard Madoff was charged with fraudulently operating a multi-billion-dollar Ponzi scheme. Primeo was subsequently placed into voluntary liquidation. On 20 February 2013, Primeo brought claims against the respondents for breach of their contractual duties. At first instance, the judge dismissed Primeo’s claims, principally on the basis that strict liability loss and causation had not been established and that the claims were barred by the reflective loss principle in any event. The Court of Appeal agreed that that Primeo's claims were barred by the reflective loss principle, and so dismissed Primeo's appeal on that basis. Primeo now appeals to the Judicial Committee of the Privy Council.

Date of issue

30 August 2019

Interim Judgment details

Judgment date

9 August 2021

Neutral citation

[2021] UKPC 22

Judgment links

Full Judgment details

Judgment date

15 November 2023

Neutral citation

2023] UKPC 40

Judgment links

Judgment summary

15 November 2023

Appeal

Justices

Lord Reed

Lord Hodge

Lord Lloyd Jones

Lord Kitchin

Lord Sales

Hearing dates

Full hearing

Start date

20 April 2021

End date

21 April 2021

Appeal hearing

Start date

12 October 2021

End date

15 October 2021

Watch hearings

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