England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
MERCANTILE COURT

		Manchester Civil Justice Centre
		30th June 2015

JUDGE STEPHEN DAVIES INTRODUCTION

1. There are two applications before the court today. The first in time is an application by the defendant, Barclays Bank Plc, to strike out or to obtain summary judgment on the claim, in short on the ground that the claims advanced are barred by a general release contained in a Settlement Agreement made between the claimant, Mr. Gary Ronald Marshall, and the defendant. The second in time is an application by Mr. Marshall to amend the particulars of claim, in order to provide further details of the existing claims and to advance a number of substantial new claims.
2. I have had the benefit of detailed written submissions supplemented by oral submissions from counsel for the claimant, Mr. Hurst, and counsel for the defendant, Mr. Pope.
3. Although there may be some scope for argument as to the precise nature of the test, it is common ground that the court, when considering both the defendant's application for strike out and summary judgment and the claimant's application to amend, has to consider the merits of the claims as already advanced and as sought to be advanced, and to consider whether or not they are reasonably arguable. The court cannot conduct a mini-trial in relation to disputed issues of fact, or complex questions of law and fact, nor should it strike out properly arguable claims in relation to new or developing areas of jurisprudence. Equally, however, if the court is satisfied that the claim sought to be raised simply has no real prospect of being successfully advanced, then the court should grasp the nettle and either strike out the claim or refuse permission to amend, as the case may be.
4. In so far as the application to amend is concerned, the court must also exercise its discretion. Helpful guidance as to the proper approach to take to amendment applications was given recently by Coulson J in CIP Properties v .Galliford Try [2015] EWHC 1345 (TCC) at para. 19. In particular, at sub-para.(d), he drew attention to the need to consider whether or not the proposed amendments are sufficiently particularised and sufficiently clear.
5. Mr. Pope has raised four matters for my consideration. First he has submitted that the draft amended particulars of claim is not properly pleaded and the application to amend should be refused on that ground alone. Second, and perhaps most significantly, he has submitted that not just the existing claim but also the further proposed claims are all barred by the general release contained in the Settlement Agreement, which simply cannot be overridden, so that none of the claims can go further. Third, even if that is not the case, he submits that none of the proposed further claims have any real prospect of success and permission to amend should be refused on that basis. Finally, he raises arguments in relation to delay and prejudice in relation to the exercise of the discretion to amend.
6. All of those arguments are strenuously contested by Mr. Hurst for the claimant. I will deal with the general release argument first; the question as to whether or not the proposed new claims have real prospects of success second; the adequacy of the proposed amended particulars of claim as a statement of case third; and the other matters relating to discretion fourth.

SUMMARY OF THE EXISTING AND DRAFT AMENDED PARTICULARS OF CLAIM

7. I should begin by saying something, briefly I hope, about the existing particulars of claim. In short, Mr. Marshall complains about the alleged mis-selling of an interest rate hedge product, also referred to as a swap, which was entered into in March 2008. The existing particulars of claim is pleaded, not by Mr. Hurst, on what may fairly be described as conventional grounds, with which the Mercantile Court has become very familiar. Thus it is said that the Bank made material misrepresentations, was guilty of breach of contractual duty and negligence, was guilty of breaching various regulatory requirements, in particular those commonly referred to as the COBS rules (the Conduct of Business Sourcebook rules), and that as a result Mr. Marshall has suffered loss and damage.
8. The proposed draft amended particulars of claim, in addition to maintaining and re-pleading those existing claims in substantially more detailed form, seeks to add a number of further allegations.
9. First there is an overriding allegation that the swap contract is vitiated by being contrary to public policy because, it is said, of the alleged widespread, deliberate and, as Mr Hurst did not shy away from characterising it in oral submissions, dishonest conduct of the Bank in contravening all of the regulatory procedures to which it was subject, and in failing to comply with what are said to be regulatory conditions precedent to the validity of the swap contract, with the consequence that the swap contract is rendered void. It is said that in those circumstances the claimant is entitled to recover everything paid by him in relation to the swap as a claim in unjust enrichment or restitution.
10. Second, it is said that the Bank was guilty of deceit as regards the sale of the swap, so that Mr Marshall is making a clear allegation of dishonesty against the Bank.
11. Third, there is an allegation in relation to the conduct of a review undertaken by the Bank in relation to the potential mis-selling of this product. It is said that the Bank failed to undertake any proper review in accordance with its regulatory obligations. By way of further very recent amendment it is said that the Bank failed in undertaking this review to comply with further regulatory rules in relation to dispute resolution, known for short as DISP.

SUMMARY OF FACTUAL MATTERS

12. Before dealing with the arguments it is necessary to refer, I hope briefly, to some of the relevant key events and documents.
13. In August 2007, Mr. Marshall borrowed £1 million from the Bank on a variable interest rate loan agreement in order to buy a commercial property in Hertford as an investment, which he intended to lease to his company. The agreement made provision for the Bank to have security over that property.
14. It is his case that from December 2007 through to March 2008, there were various dealings between him and the Bank in which the Bank sought to persuade him to enter into an interest rate hedge product to cover the risk of interest rates rising over the 22 year period of the loan agreement. It is said that, in reliance upon the matters about which complaint is now made, he entered into the swap agreement on 28th March 2008.
15. It is also said that the Bank included contractual provisions in relation to the swap agreement which had the effect of preventing Mr. Marshall from complaining that the relevant regulations had not been adhered to in terms of the sale of the product, which are challenged by way of a specific allegation of breach of COBS 2 in the draft amended particulars of claim.
16. It is common ground that Mr. Marshall ran into financial difficulties with the result that towards the end of 2011 there were discussions between the Bank and Mr. Marshall involving a proposal for a parting of the ways, with Mr. Marshall, effectively, refinancing the loan through other means and redeeming the security over the property.
17. I have been taken to some of the relevant correspondence by both parties. There is no need for me to refer to it all. What is relevant for present purposes is that it is clear that before the settlement was entered into Mr. Marshall was fully aware that he had a potential claim against the Bank for mis-selling of the hedge. That appears for the first time in an email sent by him on 19th December 2011, where he said, in terms, that he was currently awaiting solicitor's instructions to mounting a challenge for a mis-sale of the hedge.
18. Again, when negotiations resumed in March 2012, it is clear that the Bank was saying that any deal should be on the basis that the hedge should be terminated, and that any settlement should include settlement of any claims in relation to the selling of the hedge. It is clear that all discussions proceeded on both sides on the basis that there should be a full and final settlement and a complete break, which would include the Bank giving up its security over the property.
19. By way of final illustration, I refer to an email from the Bank to Mr. Marshall and his representative on 26th March 2012 where it was said, in clear terms, that the Bank would need to formally break the interest rate derivative product as part of this process and that Mr. Marshall would be asked to sign paperwork giving authority to cancel the swap and waiving the right to challenge the swap at a future date. At that stage Mr. Marshall was also telling the Bank that he would be involving solicitors in relation to the proposed settlement agreement.
20. The Settlement Agreement itself was produced on 20th April 2012. There are two agreements, one with Mr. Marshall personally and one with his limited company, both in virtually identical terms. The former provided that the Bank was prepared to accept payment of £950,000 in full and final settlement of the debt that Mr. Marshall and his company owed to the Bank and any issues, complaints and/or claims they may have against the Bank, subject to the terms and conditions set out below. It was provided that once Mr. Marshall had obtained the refinance monies he would pay that £950,000 as the settlement amount, whereupon the Bank would accept it in full and final settlement of the indebtedness and the Bank would release its security.
21. Sub-paragraph (C)(2) is the key clause in this case, and it provides as follows:

"You [Mr. Marshall] agree to release and waive irrevocably any claims, complaints or rights of action against the Bank in relation to this matter and your banking relationship and arrangements with the Bank, and you covenant not to bring any such claim, complaint or action against the Bank. You agree that acceptance of these terms will constitute full and final settlement of your claims against Barclays, whether direct or indirect, foreseen or unforeseen, contingent or actual, present or future, and which arise, or may arise, out of or are in any way connected with this matter."

As Mr. Pope for the defendant submitted, that is a clause drafted in extremely wide terms and it is one which Mr. Marshall was apparently willing to accept. He signed and returned the agreement some time on 26th April 2012.

22. Mr. Hurst has drawn my attention to a further email sent a couple of months later, on 26th June 2012, by which the Bank was chasing Mr. Marshall for payment and making some suggestion that, if he did not do so, they would withdraw the agreement. However that did not happen, and the agreement was subsequently completed, as I shall explain later.
23. But in the meantime, on 29th June 2012, the Financial Services Authority (FSA) issued a statement, which was publicised, under which they announced that they had found on investigation over the last few months what they described as serious failings, including a range of poor sales practices, in the sale of interest rate hedging products to some small and medium sized businesses. They also announced that they had reached agreements with four banks, including Barclays, to provide appropriate redress, which was to be in the form of a review exercise which was to be undertaken by each of the banks and was to be scrutinised by an independent reviewer at each bank.
24. I have been shown an agreement entered into between the FSA and Barclays at that time, under which Barclays agreed to implement this review exercise. As is common ground, it was said to be a confidential document, and was not published at the time. It also specifically excluded any right for third parties to seek to enforce any term of the agreement. It included, in Annexes A and B, detailed provisions as to how the review was to be undertaken by Barclays.
25. There is an issue between the parties which, if this case went to trial, would have to be resolved, as to whether or not, and if so to what extent, the Bank was aware of the FCA investigation, its results, and that as a result it was likely to have to enter into some commitment to undertake a mis- selling review exercise at the time that it entered into the Settlement Agreement with the claimant. For present purposes, I proceed on the basis that the claimant has at least an arguable prospect of showing that the Bank was aware of these matters at that time, towards the end of April 2012.
26. It is clear that Mr. Marshall experienced some difficulty in finding the money payable under the Settlement Agreement, which led to some further discussions, and in January 2013 he entered into a supplemental agreement with the Bank under which they agreed to accept the reduced sum of £900,000 in full and final settlement, but with no other material amendment to the terms of the Settlement Agreement.
27. On 18th February 2013 the Bank wrote to Mr. Marshall a letter headed, "Review of the sale of interest rate hedging products to Gary Ronald Marshall on 28th March 2008", saying that they had determined that he was within the scope of the review exercise agreed with the FCA. They provided some explanation as to the review process, saying that they had asked Eversheds, the well-known solicitors, to carry out what was described as an impartial fact find regarding the sales of these products. They said that Eversheds would welcome the opportunity to hear from Mr. Marshall and, under the heading "Next Steps", said: "Should you wish to take this opportunity to have your sales reviewed, please complete and return the attached form". They also asked him to indicate whether or not he was willing to talk to Eversheds about the matter. Mr. Marshall signed that form on 19th February 2013, indicating that he would like Barclays to review the sale of the product and was willing to talk to Eversheds about it. On that basis the review then began.
28. It is also clear from the agreement between the Bank and the FSA that one of the undertakings that the Bank gave to the FSA was that they would not seek to foreclose on or adversely vary existing lending facilities to any customer during the course of the review process save in exceptional circumstances. The Bank therefore wrote a further letter to Mr. Marshall, which he signed and returned on 15th March 2013, referring to the fact that the Settlement Agreement would involve the refinancing of the lending facilities including the security over the property and the swap, explaining the undertaking given by the Bank to the FSA, and saying,

"We confirm that your agreement to the refinance of the property detailed above and the breakage of the swap is without prejudice to your right should you be eligible under the FSA criteria to be included in the ongoing interest rate swap review and to receive any redress which may be determined as appropriate arising out of that review."

Mr. Marshall signed and returned the letter to say that he accepted it on that basis.

29. On 21st November 2013, the Bank wrote to Mr. Marshall to provide him with the outcome of the review, saying that they had considered all available documentation and materials, and compared what took place against the relevant regulatory standards, and had concluded from this that Barclays met the necessary standards at point of sale and, therefore, that no redress was due. They also said that the well-known firm of accountants, KPMG, acting as an independent reviewer, had provided oversight of the review and having considered it had confirmed that the decision was appropriate.
30. It does not appear that Mr. Marshall took any steps to challenge that decision at the time although it is now his case, as I have already intimated, that the review process suffered from wholesale flaws making the process wholly unsatisfactory.
31. Finally, these proceedings were commenced in March 2014, on the cusp of the expiry of the limitation period. Following service of the Claim Form and Particulars of Claim the application to strike out was made in September 2014. After some delay the amended particulars of claim were provided in February 2015, and after the Bank's solicitors had indicated that they were not willing to consent the action was transferred to the Mercantile Court in May 2015 and duly listed for a 1 day hearing today.

THE GENERAL RELEASE

32. The first question is, as I say, the impact of the general release in the Settlement Agreement. I have been referred by both counsel to the authoritative authority in this regard, which is the decision of the House of Lords in Bank of Credit and Commerce International SA v. Ali and Others [2002] 1 AC 251. Lord Bingham of Cornhill gave the first speech, with which Lord Browne-Wilkinson agreed. Lord Nicholls and Lord Clyde gave concurring speeches, Lord Hoffmann dissenting in the result.
33. In short, in that case certain ex-employees of the insolvent bank, BCCI, sought to bring counter- claims for what were referred to as stigma damages, and were met with a defence that in the course of prior employment claims they had signed a standard form of agreement which contained a general release of "all claims of whatsoever nature that exist or may exist", and thus in wide terms, although not quite so wide terms as the current covenant. The House of Lords was satisfied that, since at the time when the general release was given neither the bank nor the ex-employees could realistically have supposed that a claim for stigma damages was a possibility, the parties could not have intended that the release should apply to those claims.
34. In para.9, Lord Bingham said:

"A party may, at any rate in a compromise agreement supported by valuable consideration, agree to release claims or rights of which he is unaware and of which he could not be aware, even claims which could not on the facts known to the parties have been imagined, if appropriate language is used to make plain that that is his intention."

But in para.10, he went on to say:

"But a long and in my view salutary line of authority shows that, in the absence of clear language, the court will be very slow to infer that a party intended to surrender rights and claims of which he was unaware and could not have been aware."

He then referred to those authorities in support of that proposition.

35. In para.19, he held that on a fair construction of the document it could not be concluded that the parties intended to provide for the release of rights and the surrender of claims which they could never have had in contemplation at all, and that if they had sought to do so, they should have used language which left no room for doubt.
36. Lord Nicholls of Birkenhead in para.32 also considered a further argument, under the heading "Sharp Practice", where he said this:

"Materially different is the case where the party to whom the release was given knew that the other party had or might have a claim and knew also that the other party was ignorant of this. In some circumstances seeking and taking a general release in such a case, without disclosing the existence of the claim or possible claim, could be unacceptable sharp practice. When this is so, the law would be defective if it did not provide a remedy."

That not being the case there, as he said in para.33, he did not need to consider it further.

37. Lord Hoffmann also considered that further argument and in para.69 of the judgment made some suggestions as to the legal basis by which such an argument could be raised. There is no need for me to refer to those observations in the course of this judgment, since I am satisfied that for present purposes it may be said to be at least arguable that the claimant can seek to take advantage of that principle, whatever its precise legal basis.
38. It follows that there are two issues to be considered in this case. The first is the proper construction of the general release; the second is the possible application of the "sharp practice" argument.
39. As Mr. Pope says in relation to the former, the general release in the Settlement Agreement is extremely wide. It is wider than the clause in BCCI v. Ali and it expressly includes not just existing claims but also foreseen and unforeseen claims, present and future claims, and claims which arise or may arise out of or are in any way connected with "this matter". He submitted that in circumstances where the factual matrix demonstrated quite clearly that Mr. Marshall was aware that he did have a potential claim against the Bank for mis-selling of the hedge, it could not conceivably be said that such a claim, which comprises all of the existing and proposed claims sought to be raised by him in these proceedings, is not covered on an objective construction of that clause.
40. Mr. Hurst submitted that the court might reach a different conclusion with better knowledge of the factual matrix. He also submitted that it was at least arguable that the words "this matter" did not include claims of the sort which have now been advanced, including claims in relation to the review. However it seems to me that I am in a perfectly good position today to reach a final conclusion as to the proper construction of that clause, because no-one has suggested nor is there any evidence that might indicate that there are any other matters relevant to the factual matrix which could cast any further light on the proper construction of the general release. It also seems to me to be clear, and I have no doubt whatsoever, that the clause does, upon its proper construction, include all of the claims which the claimant seeks to advance, both the existing and the proposed claims.
41. Mr. Hurst seeks to rely upon the "sharp practice" argument identified by Lord Nicholls. In short, his argument is that the Bank was aware at the time of the Settlement Agreement of the FSA investigation, that it had reached conclusions adverse to the Bank as regards its sales practices, and that some form of review procedure would be set up. His argument is that since the Bank knew this, and also knew that Mr. Marshall did not, it was under an obligation to disclose these matters to Mr. Marshall, so that Mr. Marshall could decide what to do and, in particular, could decide whether or not to await the results of that review exercise before deciding whether or not to enter into the Settlement Agreement, in circumstances where it included the swap being broken and his accepting a settlement based upon his being liable to the Bank under the swap.
42. However in my judgment this argument seeks to ascribe an importance to the review which it simply cannot have on any objective analysis of matters. The reality, in my judgment, is that the review was no more than that. It was an obligation, agreed on as between the FSA and the Bank, under which the Bank agreed to carry out a review of mis-selling of swap products and, where that was found to have taken place, to make proposals for compensation. That, in my judgment, is not materially different in substance to the right that Mr. Marshall already knew that he had, which was a right to make a claim, whether by complaint or by litigation or by both, against the Bank in relation to the mis-selling of the hedge product to him. He knew that he had that right. He had talked about involving solicitors to bring such a claim on his behalf. It was never suggested that any settlement involved his accepting liability in relation to the swap. The settlement involved a substantial writing off by the Bank of monies which it claimed that it was owed, including therefore any liability, actual or contingent, in relation to the swap. He knew this, and in those circumstances to seek to argue that the Bank could or should have been obliged to inform him about the potential of the review before entering into this agreement is really, on any view, a hopeless argument in my judgment.
43. Moreover, even if I was wrong about that, the only consequence of such an argument succeeding would be that Mr. Marshall would have been entitled to insist on his right to participate in the review, if the Bank had said "You are not entitled to do so because of this settlement". In fact, of course, the Bank never sought to prevent him from participating in the review, and he did so. In my judgment, it cannot possibly be argued that the consequence of any non-disclosure could be such as to discharge the Settlement Agreement in its totality, or in some way operate as a general abrogation of the general release. So I reject the argument for that reason as well.
44. The further argument raised by Mr. Hurst rests upon the document of 15th March 2015, which he submitted was a waiver of the right given by the Bank, not just in relation to the review itself but in relation to any claim or cause of action or complaint arising out of or in connection with the review. In my judgment, that is simply untenable as an argument. It clearly is not an argument that can come from the wording of the document itself, which makes it clear that all that the Bank was doing was making it clear to Mr. Marshall that notwithstanding the implementation of the Settlement Agreement it would not seek to prevent him from participating in the review at some later date should he want to do so.
45. It does not seem to me that it could conceivably be argued that on an objective construction of that document the Bank was also saying that this limited waiver could have any further or wider impact and could cover any further or wider rights, such as the claim which is sought to be made in this case, to seek to make complaints about the conduct of the review process.
46. The final argument advanced by Mr. Hurst was to contend, by reference to his public policy argument, that if the original swap agreement itself was void because it was illegal or otherwise contrary to public policy^[1], then both parties were operating under a mistake when they entered into the Settlement Agreement, the mistake being that they both thought that the swap was not void, and that on that basis the Settlement Agreement could and should be set aside. Although I applaud the ingenious nature of the argument, it seems to me to be a distinction without a difference, and to elevate the public policy argument to a significance which it does not have. That is because again, in my judgment, the fundamental point is that Mr. Marshall knew at the time that he had the right to make a claim which would involve, one way or another, a challenge to the current position whereby the swap was apparently enforceable and binding on him, and the precise mechanism of how he might choose to make that challenge good in legal terms really did not matter. Fundamentally, what he cannot credibly contend in my judgment is that he is entitled to avoid the general release by saying in effect, "I may have known in general terms that I was entitled to challenge the swap, but, because I did not know the specifics as to how I could do so, nor did I know just how bad the Bank's conduct was in relation to the mis-selling of the swap, both to me and to others, I can escape from the wide terms of this release".
47. The end result, in my judgment, is that all of the claims currently made in this case and also those sought to be made are barred by the Settlement Agreement and cannot be pursued, and there is no realistic prospect of arguing to the contrary. I am satisfied that in such circumstances the existing claim must be struck out, and summary judgment entered against the claimant in relation to the claim, and also that permission to amend should be refused, because the proposed new claims have no real prospect of success for the same reason.

ARE THE PROPOSED NEW CLAIMS ARGUABLE?

48. I should however also deal, albeit more briefly, with the alternative arguments in relation to the new claims.
49. I refer to the public policy and condition precedent arguments. In my view there is really no proper basis for advancing these arguments in this case on the basis of the proposed pleading. In my judgment it cannot credibly be said by the claimant that, even if there was - which I am prepared to assume for the purposes of the argument but without deciding that is at least arguable - a wholesale systematic, deliberate, even dishonest, non-compliance with the regulatory regime in relation to the entry into this and other swap agreements, the consequence is that the swap agreement itself is made void for illegality or otherwise being contrary to public policy. Whilst I appreciate that such a conclusion might at first blush be said to produce an unfair or unreasonable result against Mr. Marshall if the facts are as Mr. Hurst contends, the answer in my judgment is that the law holds that illegality or other cases of conduct contrary to public policy results in agreements being held void only in very limited circumstances. In a case such as the present, where one party is saying that his entry into an agreement was accompanied by and would not have occurred without widespread breaches of the applicable regulations by the other, that is not one of those circumstances which could result in the agreement being invalidated on grounds of public policy. Instead it would afford the claimant, if he was right, the ability to have that agreement unravelled on one or more of the bases which Mr. Marshall would have been entitled to advance in this case, but for the settlement.
50. It seems to me that illegality or other breach of public policy simply does not avail the claimant in this case. The reality is that either a claimant in the position of Mr. Marshall can rely on breaches of regulations which he can establish afford him a civil remedy, which here he could do so but for the effect of the general release, or he cannot, because the statutory framework does not, on its true construction, allow him to do so, and no amount of repeated reference to wholesale, systematic, deliberate or even dishonest breach of the regulations will alter that fundamental position.
51. Furthermore, even if I was wrong about that, it appears to me, despite what Mr. Hurst submitted, that the effect of what is now s.138E(2) of the Financial Services Act 2012, which specifically provides that no such contravention - that is a contravention of a rule made by a regulator - makes any transaction void or unenforceable, quite clearly means that it is simply not possible to advance an argument that, even in the case of alleged wholesale, widespread, systematic, deliberate and even dishonest breaches of the regulations, the underlying transaction is rendered void. I was, I am afraid, not remotely convinced by Mr. Hurst's appeal to what he characterised as the golden rule approach to statutory construction, whereby one can adopt a non-literal meaning to a statutory provision in such cases.

CLARITY / PARTICULARITY

52. The further reason why I would not have granted permission to amend is that it seems to me that the proposed new claim in relation to public policy, despite the detail with which it is sought to be pleaded, is not in fact pleaded with sufficient clarity or particularity in its key ingredients. What it ought to do is to set out in clear terms what the claimant's case is by reference to what he contends are the actual breaches and their individual and cumulative impact on the circumstances in which the swap agreement was entered into, so that the Bank and the Court can see the wood for the trees. Instead, what the claimant has done is to plead in general non-specific terms a compendious list of every regulation which he can think of was or might have been breached, without properly stating what the individual and cumulative impact of all that was. That is not, in my view, a proper basis for making such a serious allegation and, therefore, I would have refused permission on that basis as well. It would follow that the claim of unjust enrichment would fall away on the same basis.
53. So fact as deceit is concerned, the difficulty with the current pleading, in my judgment, is that it simply does not provide the necessary particulars as to what it is said was not true, or the basis upon which it is said that the Bank knew that it was not true or was reckless as to its truth. In those circumstances, it does not seem to me that it could possibly be right to grant permission to make such a serious allegation of deceit in the absence of proper particularisation.
54. So far as the challenge to the review is concerned, I heard considerable argument about whether or not it could arguably be said that the review process amounted to a contract as between Mr. Marshall and the Bank, as opposed to a non-contractual review process undertaken by the Bank pursuant to an agreement with the FSA and with the consent of Mr. Marshall. If the latter, then the case based on contractual obligation simply could not run. It seems to me to be plain from the documents to which I have referred that it could not possibly be regarded as contractual as between Mr. Marshall and the Bank. It also seems to me that, despite Mr. Hurst's attempt to argue that Mr. Marshall gave consideration for the Bank agreeing to undertake the review by forbearing to sue, in fact on any true analysis there was no consideration which could give rise to contractual relations in this case. The reality is that Mr. Marshall was simply the beneficiary of the review. He did not give anything away nor did he suffer any detriment nor agree to do anything different as a result of being afforded that review. Therefore, the contractual argument simply cannot run, in my judgment.
55. Seeking perhaps to anticipate this difficulty, during the course of yesterday Mr. Hurst as I have said produced an alternative further pleading seeking to rely upon DISP as a basis for contending that there was a right to challenge the results of the review. It seems to me at first blush to be implausible that breaches of what appears to be a procedural dispute resolution regulatory structure could allow the claimant to bring what is tantamount to an appeal against the review decision, but since Mr. Pope had not had the opportunity to deal with the argument and it is not necessary for me to express a concluded view on the point it does not seem to me that it would be right to do so. That will have to be a decision for another case or another court.

EXERCISE OF DISCRETION

56. So far as the other arguments are concerned, it seems to me that the length of the particulars of claim would not in itself be a reason for refusing permission, because such a concern could be addressed by a more appropriate and less draconian sanction. It also seems to me that if a properly particularised case had been made for claims which I had otherwise found to have a real prospect of success, then it is unlikely that I would have shut out the claimant completely from bringing them. However, given the conclusions that I have reached, these issues do not arise and, as I have said, on the conclusions that I have reached, the claim must be struck out and summary judgment entered, and the application to amend must be dismissed.
57. Finally, before concluding this judgment, I should note that I have not been addressed on the question as to whether the proposed new claims involve the addition of a new cause of action which does not arise out of the same or substantially the same facts as the existing causes of action and which are, as at the date of this application, statute-barred.

MR POPE: I am very grateful. The only issue I think is costs. Of course, the normal rule is that at the conclusion of a hearing that has lasted no more than one day, although I suppose that, technically, we are slightly longer than one day, the court will assess costs summarily unless there is a good reason not to do so.

JUDGE DAVIES: I think that the slight difficulty in this case, as I understand it, is that as a result of the order that I have made you will be seeking an order for payment of the entire costs of the case.

MR. POPE: Correct.

JUDGE DAVIES: I have not seen the schedule of costs, but it may be - I will hear argument about it, if necessary - that if as I assume they are relatively substantial, the more appropriate course would be to send them off for detailed assessment but to make an interim payment on account of those

costs.

MR. POPE: May I just turn my back?

JUDGE DAVIES: Yes.

MR. POPE: My Lord, yes, we would be content to take that approach. We do, as I mentioned, have a schedule of costs for the entire action. Hopefully, your Lordship has a copy.

JUDGE DAVIES: Mr. Hurst, I assume that you acknowledge that, as a result of my judgment, your client will have to pay the costs of the claim.

MR. HURST: Yes, and the provisional view that you formed, that it should go off for detailed assessment rather than the halfway house of summary assessment today and the remainder in another fashion, I would submit is right. I cannot realistically resist an order for interim payment. JDUGE DAVIES: The total is £37,000, so about £21,000 solicitors' fees and about £16,000 counsel, together with other disbursements. I would have thought that an interim payment of £20,000 would be about right in this case.

Mr. HURST : I did not know what the overall figure was going to be. The Bank does not need the money. Mr. Marshall, whatever may be the outcome of the case, has suffered significant hardship as a consequence of the swap.

JUDGE DAVIES: To cut you short, I think that what the court should do in a case like this is to make the order which it would otherwise make, assuming there was no question about the financial circumstances of the paying party, but I would be prepared to make an order that, if Mr. Marshall wants to make an application for an extension of time or for payment by instalments, then he can do that by making an application to his local County Court so that, if appropriate, he could put before a District Judge evidence as to his means which would justify a different order being made. I think that it is difficult for this court to say anything other than that, as a losing litigant, he must pay what he otherwise would have to pay.

MR. HURST: My Lord, he goes with the outcome. My Lord, I do not seek to dissuade you from the course that you have just outlined. I would invite you, in fact, to take that course and then he can apply to the court.

I wish to address you on two matters when we have dealt with costs, if I may.

JUDGE DAVIES: Let me just sketch through the order and I will invite Mr. Pope to have carriage of this order, so that he can produce a fair copy. Paragraph 1 will be the claim is struck out and there is summary judgment on the claim on the basis that there is no reasonable prospect of success. Paragraph 2, the claimant's application to amend the particulars of claim is dismissed. Paragraph 3, the claimant shall pay the defendant's costs of the applications and the claim, to be the subject of a detailed assessment if not agreed on the standard basis. The claimant shall make an interim payment on account of such costs in the sum of £20,000 - if I say within 28 days that would take us to 28th July 2015, unless by such date he applies to the County Court - what would be the local County Court for Mr. Marshall?

MR. HURST: Hertford.

JUDGE DAVIES: He applies to the County Court at Hertford for an extension of time or for an instalments order, in each case supported by evidence as to his means. I think that that then deals with the substantive order and the costs, does it not? Then that leaves your two points, Mr. Hurst.

MR. HURST: Yes. The first is the issue of deceit. That was not a matter that I addressed in detail. In fact, I did not address you at all on it. I did ask if there were any matters that needed to be addressed and my Lord indicated that there were none. Therefore, I did not address you on the matters of deceit.

JUDGE DAVIES: I do not think that it matters for these reasons: one, because I held, as I clearly was satisfied, that the Settlement Agreement covered all claims which would include deceit.

MR. HURST: If that is the case, my Lord, then I have no difficulty, because, if it is overruled by the Settlement Agreement, then it has not been overlooked. You can understand my concern that, if it was a separate head that has somehow been missed, then, of course, I will address you.

JUDGE DAVIES: No. MR. HURST: I would have submitted that the claim was adequately pleaded.

JUDE DAVIES: To clarify, I think that what I said was that it was covered by the Settlement Agreement. I did not hold that it had no reasonable prospect of success in itself, but I did say that, because it was not in my view, properly particularised, it would not have been appropriate to grant permission to include it for that reason, even if I had not decided that it was covered by the Settlement Agreement.

MR. HURST: I did not address you on sufficiency, I might do, but it is after the event. It is pointless so I am sure that my Lord will understand if I do not seek to pursue it further.

JDUGE DAVIES: Absolutely.

MR. HURST: My Lord, the second is a question of appeal. I would ask for permission to appeal. JUDGE DAVIES: Yes.

MR. HURST: I would ask for permission to appeal on all points. The critical point, of course, is the question as to whether or not, if the underlying contract is void under public policy, then that would vitiate the Settlement Agreement, and that is a key point. My Lord, focused on illegality. I would submit that, by focusing simply on illegality, my Lord failed to consider the wider doctrines which are well established. It is not illegality that matters, the question is whether or not it would be repugnant, generally, to the public policy and not illegality. The question here is whether or not the overall conduct of the Bank would be repugnant to public policy. At the heart of the application, that is the core point, but may I apply, formally, for permission to appeal in relation to all of the points?

JUDGE DAVIES: Yes, of course, you may. I am going to refuse permission to appeal on the basis that I do not consider there is a real prospect of success and I will fill in and the court will send the appropriate form to your instructing solicitors with the order so then you can take the matter further.

Paragraph 4 of my order then will be as follows: The claimant's application for permission to appeal is refused. The claimant may appeal to the Court of Appeal against this decision, which is an interlocutory decision, with the permission of the Court of Appeal, to which any further application should be made. Then that records that you made the application.

MR. HURST: That is why I made it, my Lord.

JUDGE DAVIES: Indeed so. Thank you both very much for your very helpful submissions.




Note 1   In this paragraph 46 and also in paragraphs 49 and 50 I have added the reference to “or otherwise contrary to public policy” whilst approving the transcript, because whilst I accept, as Mr Hurst submitted when asking for permission to appeal, that I referred expressly in my oral judgment to illegality without adding those words, I had intended when giving judgment to refer to the wider basis of public policy and not to limit my judgment to the narrower ground of illegality.    [Back]