GOLDMAN SACHS INTERNATIONAL LIMITED V PHILIP LYONS

On 6th February, 1987, Goldman Sachs (the plaintiffs in the action from which this appeal arose and the respondents to the appeal hereinafter referred to as the Plaintiffs) purchased US$10m face value worth of Exxon bonds for which they paid US$2.26m. They sold them on and a month later it transpired that the bonds were forgeries. The London brokers from whom the Plaintiffs bought the bonds revealed, following police enquiries, that they acted on the instructions of a Mr Philip Lyons (the Defendant). Mr Lyons was a Chartered Accountant, and had delivered the bonds to the clearing house when the sale was concluded and he also controlled the Liechtenstein Anstalt (a form of nominee trust) to which the purchase price had been paid. In April 1987 Mr Lyons was arrested and charged with forgery and deception.