They claimed that Société Générale owed it $4,009,697.91, which it held for its customer, the Bahamas Commonwealth Bank Ltd in a trust account.

Alternatively, Société Générale was claimed to owe a duty of care, and to be liable in damages for the loss suffered.

Peter Gibson J held that Société Générale was not liable because it had no knowledge at the time of the fraud in which it assisted.

Mr. Price however accepts that these formulations require modification to this extent, that if the alleged constructive trustee can show that on a balance of probabilities inquiries would have produced answers acceptable to the honest and reasonable man even if such answers be incorrect, constructive knowledge is not to be imputed.

Mr. Leckie's formula is substantially in accord with what Edmund Davies LJ said in Carl Zeiss Stifung v Herbert Smith & Co (No 2) [1969] 2 Ch.

276 , 304, where he recognised as a possible exception to the requirement of actual knowledge the case: where the agent is under a duty to inquire into the validity of the third party's claim and where, although inquiry would have established that it was well-founded, none is instituted.