Boyse (International) Ltd v Natwest Markets Plc & Anor

In this judgment I will refer to the claimant as Boyse and the defendants as the Bank. The second defendant (RBS) at all material times acted as agent for the first defendant (NatWest) and there is no need to distinguish between them.

There were three applications before me on 11 March 2020:

Stephen Auld QC and Simon Oakes appeared for Boyce and Laura John appeared for the Bank.

Boyse’s claim relates to two interest rate hedging products (IRHPs), a swap dated 10 August 2007 and a collar dated 27 November 2008, which Boyse says it was induced to enter into by the Bank’s fraudulent misrepresentations. Boyse’s claim was issued on 19 February 2019 and amended on 30 July 2019. The principal issues for determination on the Bank’s application to strike out the claim are (i) whether the claims in deceit are barred by limitation and (ii) whether the claims alleging fraud meet the minimum pleadings requirements for such a claim. The first issue principally engages CPR 3.4(2)(a). The second issue concerns all three limbs of CPR 3.4(2).

It was common ground between the parties that the court should approach the strike out application on the basis that:

Boyse also invites the court to have regard to two further principles:

I will consider later in this judgment whether the Bank’s application for summary judgment was a necessary addition to the hearing. It was issued in response to a suggestion made by Boyse that the court cannot strike out a claim based on limitation where the claimant relies on section 32(1)(a) of the Limitation Act 1980.

The court has been provided with two statements made by Paul McNamee, who is a solicitor with DLA Piper UK LLP, the Bank’s solicitors, and one statement made by Andrew Wass who is a partner with Withers LLP, Boyse’s solicitors. There are for the purposes of this application no facts of significance that are in dispute, although the conclusions to be drawn from those facts are contentious, and I will refer to the statements only where it is necessary to do so.

Boyse is a trust company registered in Gibraltar and is managed by M&M Management Services Limited, a professional trust manager. Its business is to hold commercial property investments for the ultimate benefit of Mr and Mrs Sharma. They are experienced in business and the owners of a successful luxury travel specialist called Best At Travel plc. Mr and Mrs Sharma are not directors of Boyse. They make recommendations to Boyse’s directors who in turn manage its investments. Boyse purchased commercial properties for investment. Mr and Mrs Sharma, particularly Mr Sharma, had extensive direct dealings with the Bank over the relevant period.

Boyse had a relationship with the Bank from the early 2000s. The following summary provides the key dealings between Boyse and the Bank:

The following subsequent events are relevant to the claim and the Bank’s application:

The claim form issued on 19 February 2019 sought damages for negligent misrepresentation, negligence, breach of contract and breach of statutory duty. It did

Notwithstanding the amendment to the claim form, the particulars of claim at this stage had as their main focus liability based on a contractual and/or tortious duty on the Bank to advise Boyse about the suitability of the IRHPs. Paragraph 9 (which I do not need to set out in this judgment) provided a summary of the COBS duties from the Conduct of Business Source Book and pleaded contractual and tortious duties alleged to be owed by the Bank. In addition, it pleaded three LIBOR related implied terms.

Paragraph 10 set out the IRHP suitability representation (Footnote: ¹):

“10.1

At all relevant times, Boyse was entirely reliant upon the

Bank’s advice as to the appropriate level and terms of Facilities and the IRHPs. Boyse concluded the 2007 Facility, the SWAP and the Collar on the basis that the IRHPs were related and collateral to the 2007 Facility and that the IRHPs were suitable for Boyse’s business and financial needs and that Boyse could afford the costs of the IRHPs from within its existing and future cash flow.

Falsity of the suitability representation was dealt with briefly in paragraph 12:

“The IRHP representation referred to in paragraph 10 above was false. In particular, the IRHPs were not suitable for Boyse’s needs.”

The LIBOR representations were pleaded in a little more detail. At paragraph 11 an express representation is pleaded that:

“LIBOR as an independent and benchmark interest rate in accordance with the BBA definition of LIBOR … was the appropriate interest rate for the relevant facilities and IRHPs in preference to, for example, the Bank’s own base rate”

This was followed in paragraph 11.3 by three implied representations:

“In the premises (and in particular when the Bank advised and/or insisted upon the use of LIBOR rather than the Bank’s base rate) the Bank impliedly represented to Boyse inter alia as follows (“the LIBOR representations”):

(1)

That on any given date up to and including the date of the Facilities and the IRHPs, LIBOR represented the interest rate as defined by the BBA (and the Bank had no reason to believe that on any given date LIBOR represented, or might in the future represent anything else) being the average rate at which an individual contributor bank could borrow funds by asking for and accepting inter-bank offers in reasonable market size just prior to 11 a.m. on that date.

(2)

That the Bank had not, on any given date up to and including the date of the Facilities and the IRHPs, made false or misleading LIBOR submissions to the BBA or indulged in the practice of attempting to manipulate LIBOR (for example so that in fact it represented a rate arrived at by reference to the Bank’s or other panel bank’s trading positions).

(3)

That the Bank did not intend in the future to act as set out in (1) and/or (2) above.”

Falsity was dealt with at paragraph 12.2 first at a high level of generality in 12.2.1 by providing the following particulars:

“In relation to the LIBOR representations set out above, these were false. In particular,

(1)

LIBOR did not represent the rate as defined by the BBA and the Bank did not believe that it did.

(2)

At the date of the Facilities and IRHPs, false submissions in relation to LIBOR had been made.

(3)

Those making the false submissions intended to continue acting as (1) and (2) above.”

The particulars in paragraph 12.2.2 refer in detail to the findings of regulators, including the FSA, dated 6 February 2013. They also refer to the Bank’s conduct having been the subject of “considerable adverse press comment and widespread concern, including as to the reliability of reported LIBOR rates and go on:

“For example, on 9 March 2012, Reuters described LIBOR as “a system many now regard as outdated and discredited”.”

This was followed by a very brief paragraph at 12.3 under the heading: “Nature of Representations”:

“The IRHP representations and the LIBOR representations were all false. The Bank had no reasonable grounds for making the statements. They were made either: (1) intentionally/ recklessly; or (2) without due care.”

The breach of duty claims were wrapped up briefly in paragraph 12.4:

“In making the false representations and in advising Boyse to enter into the IRHPs which were unsuitable products for the needs of Boyse, the Bank was in breach of its contractual and/or tortious duty of care to advise Boyse.”

It is not controversial to say that the particulars of claim were at this stage in an unhappy state.

Mr Wass says in paragraph 19 of his witness statement that Boyse had in its draft amended particulars of claim deleted its claims for breach of duty of care. However, despite substantial changes having been made in the amended particulars of claim, further alterations would be essential if the claim were to go forward and, at the hearing Mr Auld QC, accepted that if the claim is not struck out some further pruning will be required to remove, as a minimum, the residual breach of duty claims which are referred to in paragraphs 2.1, 2.2 and 2.4. Additionally, paragraph 9, which sets out alleged COBS, contractual and tortious duties at length, remains in the pleading although it serves no purpose.

It is convenient to deal at this stage with the claim in contract for breach of the LIBOR implied terms. This element of the claim remains essentially unchanged other than by the addition of a term that the Bank would act honestly. At paragraph 14, which is in the same form as the original particulars, Boyse pleads:

“For the reasons set out above the Bank was also in breach of the LIBOR implied terms set out in paragraph 8.1 above (and each of them).”

There is a claim for damages and a new claim for a declaration that the Bank has breached the implied terms. The difficulty for Boyse (disregarding the claim having been pleaded in a somewhat spare fashion and it being unclear what the “reasons above” are) is that the normal limitation period must have expired because the alleged breaches dated back considerably more than 6 years before the claim was issued. The claim for a declaration does not assist for two reasons. First, the declaration serves no purpose. Secondly, Boyse cannot say that the claim for a declaration is not subject to a limitation period – see Woodeson v Credit Suisse (UK) Limited EWCA Civ 1103 at [21] – [24].

At the hearing Mr Auld QC did not press a case for retention of the LIBOR implied terms claim.

The amended particulars of claim contain a substantial volume of new material in relation to this part of the claim. Paragraph 5A, under the heading “Background to the sale of the IRHPs”, sets out material that is relevant to both the IRHP claim and the LIBOR claim. Paragraph 7 refers in more detail to the IRHP review and paragraph 7A pleads material concerning the suitability of the IRHPs. These paragraphs are set out in an appendix to this judgment.

The allegation as to falsity in paragraph 12.1 has been amended to reference the lack of suitability for Boyse’s needs “as set out in paragraph 7A above”.

The particulars as they relate to the “nature of the representations” remain unchanged as set out earlier in this judgment. Paragraph 12.4 which alleged a breach of the Bank’s contractual and tortious duties has been deleted. New paragraph 12.3B is headed “IRHP deceit” followed by:

“12.3B.1 Paragraph 7A.1 above is repeated.”

Paragraph 7A.1 (which is set out in the appendix to this judgment) states that the Bank and its staff “knew, ought to have known or were reckless … the IRHPs were not suitable for the Claimant …”. This is followed by four sub-paragraphs providing particulars about the lack of suitability. However, Ms John is right to observe that Boyse only provides a ‘rolled up’ rather than an unequivocal allegation of falsity.

The Final Notice published by the FSA on 6 February 2013 runs to 35 pages but is not a particularly complex document. It commences with a summary of the FSA’s reasons for its decision to impose a £87.5 million financial penalty on RBS. It is clear from the first page that the financial penalty was imposed because “… RBS sought to manipulate LIBOR in connection with its own submission of rates that formed part of the calculation of Japanese yen (“JPY”) and Swiss franc (“CHF”) LIBOR and also sought to influence other banks’ JPY and CHF LIBOR submissions.” Over the next three pages the manipulation and collusion by RBS is summarised and at paragraph 14 the impact of RBS’ misconduct is explained:

“RBS’ breaches of Principle 5 were extremely serious. Its misconduct gave rise to a risk that the published JPY, CHF and USD LIBOR rates would be manipulated and undermined the integrity of those rates. RBS’ misconduct could have caused harm to institutional counterparties and other market participants. Where RBS, alone or acting in concert with panel Banks and Broker Firms, sought to influence Panel Banks’ LIBOR submissions, the risk that LIBOR would be manipulated increased materially.”

The Final Notice received widespread publicity in the press and Mr McNamee’s second statement exhibits some examples from mainstream newspapers on that date. In addition, he exhibits extracts from the Telegraph and Guardian newspapers some months earlier in July and September 2012 that refer to the LIBOR rate-rigging scandal.

Four further points about the timing of the issue of the Final Notice and its relationship to this claim can be made:

The draft amended particulars of claim advances a case on limitation in the following terms:

“17 LIMITATION

17.1

On 21 October 2013, Boyse was invited to participate an FCA-agreed review of the sales of IRHPs, including the SWAP and the Collar. The Bank informed Boyse that if the Bank “did not meet all of our regulatory requirements, you may be entitled to redress”. It was not until 10 October 2014 that the Bank provided Boyse with the outcome of the review, which contained the conclusion that the IRHPs had not complied with the standards agreed with the FCA, and that it would be fair and reasonable to cancel the IRHPs and replace them with a vanilla cap.

17.2.

On 6 February 2013 the FSA, DOJ and CFTC published their LIBOR fixing findings.

17.3.

It was not until around May 2017 that Boyse became actually aware of the Bank’s LIBOR deceit. Further, Boyse could not with reasonable diligence have discovered the Bank’s LIBOR deceit for a reasonable period after 6 February 2013, being at the very least two weeks after the publication of the LIBOR fixing findings. Pursuant to s.32 Limitation Act 1980, Boyse’s claims in respect of the Bank’s LIBOR deceit have therefore been brought in time.

17.3.1.

Similarly, it was not until 10 October 2014 that Boyse was actually aware of the essence of its claim in relation to IRHP deceit: that the IRHPs were not suitable for Boyse, and that the Bank must have deliberately missold and misrepresented the IRHPs to Boyse. Further, Boyse could not with reasonable diligence have discovered the Bank’s IRHP deceit for a reasonable period after 21 October 2013, at the earliest.

17.4.

In the event that a plea to the contrary is contained in the Defence, Boyse will advance further particulars, if required, in the Reply.”

The necessary constituents of plea in deceit are not in doubt. I was referred to the summary contained in the judgment of Asplin J in Property Alliance Group Ltd v the Royal Bank of Scotland PLC [2016] EWHC 3342 (Ch) at [476] where she refers to Hamblen J’s judgment in Cassa di Risparmio della Repubblica di San Marino SpA v Barclays Bank Ltd [2011] EWHC 484 (Comm) at [221]. She says:

“… in order to prove fraud, in respect of each Relevant Individual PAG must establish: he knew that the LIBOR Representations were being made; he knew that the LIBOR Representations were being understood in the sense alleged, and thereby relied upon, by PAG; that it was intended that the LIBOR Representations be understood in that sense; and that he knew that the LIBOR Representations were false.”

It is a truism that the claimant alleging deceit is unlikely to be in possession of all the facts that will be relied on at trial when seeking to prove its case. (Footnote: ²) It will often be the case that until disclosure has taken place the claimant will not have all the facts it requires to prove its claim. It has been said, particularly in relation to anti-competitive arrangements, that the court will adopt a generous approach to pleadings.³ There is an important distinction, however, between whether the facts that are pleaded justify the plea of fraud and whether the evidence at trial would establish fraud. Only the former is required. The distinction has been pointed out in a number of authorities. One such authority is JSC Bank Moscow v Kekhman and others [2015] EWHC 3073 (Comm) per Flaux J at [20].

Further well-established principles include that:

Under section 32(1)(a) where a claim is based on the alleged fraud of the defendant the period of limitation does not begin to run until a claimant has either discovered the fraud or could with reasonable diligence have discovered it. For the purposes of the Bank’s application, I am only concerned with the latter. I do not need to consider Boyse’s actual state of knowledge which inevitably would involve dealing with disputed facts. Boyse does not allege deliberate concealment.

In Granville Technology Group Limited (in Liquidation) v Infineon Technologies AG [2020] EWHC 415 (Comm) Foxton J sets out at [24] to [38] a detailed review of the authorities that deal with what “discovery” for the purposes of section 32(1) means. He went on at [39] to [53] to discuss the meaning of “reasonable diligence”. The case before him concerned section 32(1)(b) LA 1980 but the test is the same whether the case falls under section 32(1)(a) or (b). In an effort to avoid this judgment becoming unnecessarily long, I gratefully adopt his summary of the law which, save for one point, raises no matters of controversy so far as Mr Auld QC and Ms John are concerned.

The essential points that arise under section 32(1) are:

The point of controversy in the authorities concerns what the claimant’s notional desire to know whether there has been a fraud means. In Gresport Finance Ltd v Battaglia [2018] EWCA Civ 540 at [46] Henderson LJ referred to the judgment of Neuberger LJ in Sephton in which he discussed the need for there to be an assumption that the claimant desires to know that there has been a fraud. Henderson LJ observed:

“Another way to make the same point … might be that the ‘assumption’ referred to by Neuberger LJ is an assumption on the part of the draftsman of section 32(1), because the concept of reasonable diligence only makes sense if there has been something to put the claimant on notice of the need to investigate whether there has been a fraud, concealment or mistake (as the case may be”.

This observation was interpreted by the Competition Appeal Tribunal in the judgment delivered by Roth J in DSG Retail Ltd v Mastercard Inc [2019] CAT 5 as meaning that “… the concept of reasonable diligence is to be applied on the assumption that the claimant is on notice of the need to investigate”.

In Granville Technology Group Ltd v Infineon Technologies AG Foxton J reached a different conclusion. He observed at [45] that: “If section 32(1) involved a statutory assumption that the claimant was on notice of something meriting investigation, it would make it very difficult for many claimants to satisfy the s.32(1) test.”

Foxton J concluded that the approach indicated by Henderson LJ in Gresport Finance v Battaglia was to be understood on the basis that:

“… the drafters of s.32(1) were assuming that there would in fact be something which (objectively) had put the claimant on notice as to the need to investigate, to which the statutory reasonable diligence requirement would then attach (and which involved an assumption that the claimant desired to investigate the matter as to which it was or ought to have been put on enquiry).”

He goes on to suggest at [46] that the approach he had summarised is consistent with the views of other judges. And at [48] he addresses what may amount to a ‘trigger’ and observes that:

“There will be many claims when it will be objectively apparent that “something has gone wrong” – where the claimant has lost property, failed to receive something it expected to receive, or suffered injury of some kind – which event ought itself to prompt the claimant to ask “why” and investigate accordingly.”

It seems to me that the right approach to adopt on this application is to apply the law as it has been interpreted by Foxton J in Granville rather than following the approach suggested by Roth J in DSG Retail. I do so with all due respect to the decision of Roth J because:

It can be seen from Henderson LJ’s remarks in Gresport Finance v Battaglia that there must have been “something to put the claimant on notice” and that must be determined on an objective basis. Foxton J puts the same point as there being “something that has gone wrong”. I would only add that to my mind there is a danger of further distilling a legal analysis of this type into one word. To say that a “trigger” is required might suggest that the court must look for a single event. To speak of a trigger may mask the fact that objective discovery for the purposes of section 32(1) may be the culmination of a series of events.

It is necessary to deal with the procedural point raised by Boyse namely whether it is open to the court to strike out a claim under CPR 3.4(2)(a) on limitation grounds or whether it is necessary for the defendant to apply for summary judgment under CPR 24.2 and, if the application must be made under CPR 24.2 whether the court should permit the Bank to amend its application notice.

It is not in dispute that there is some overlap between CPR 3.4(2)(a) and CPR 24.2; indeed, this is clear from Practice Direction 3A. Both powers enable the court to dispose of a claim on a summary basis and will normally, although not invariably, be considered at an early stage of the claim. It is commonly the case that the court will be asked to apply the powers in the alternative. In the case of CPR 3.4(2)(a), Practice Direction 3A states that the court may exercise the power to strike out of its own volition. Clearly this will only be appropriate where the court has no need to refer to any evidence.

The extent of the overlap between the two rules was discussed in Saeed v Ibrahim [2018] EWHC 3 (Ch), a case that involved very different circumstances to this case. It is important for the court to bear in mind that the test under the two rules is different. As CPR 3.4(2)(a) has been interpreted, the court must be satisfied the claim is ‘bound to fail’ and even then there is the possibility of the claim going to trial based on the principle set out in Hughesv Colin Richards & Co [2004] EWCA Civ 266. In practice, this limitation on the exercise of the power to strike out bears similarities with the second limb of CPR 24.2. Although on an application under CPR 3.4(2)(a) the focus is primarily on the statement of case, this does not preclude the court from having regard to evidence: see PD3A paragraph 5.2.

The logic of Boyse’s position is that it is for the defendant to take a limitation point. It is trite to say that limitation does not extinguish the cause of action; it provides a procedural bar to the claim being pursued, but only if the defendant wishes to take the point. It may follow that unless a defence has been filed pleading limitation, if the court reviews the particulars of claim in isolation, there is no limitation point to be taken.

There is a danger, however, of the court being faced with a triumph of form over substance. In this case, Boyse was made aware by the service of the application with evidence in support that the limitation point was being taken and, furthermore, Boyse has provided a draft amendment to its particulars of claim to put forward its case on limitation. Boyse has not been taken by surprise. And it is always in a suitable case open to the court to treat an application to strike out a claim as an application under CPR 24.2.

I consider that it will normally be appropriate for summary judgment to be pursued on a limitation point by an application made under CPR 24.2 and preferably after the claimant has had an opportunity to plead its case. That is no more than a statement of good practice. It is desirable that the court should be able to consider evidence that is relevant to knowledge, whether objective or subjective, and it will generally be preferable for the court to be evaluating the application by applying the well established jurisprudence about CPR 24.2 rather than focussing on the statement of case.

In the circumstances of this application, I consider there is no prejudice to Boyse by permitting the Bank to amend the application.

The Bank’s case on limitation, put at a high level, is simple. The claim was issued on 19 February 2019 which was more than 6 years after Boyse could with reasonable diligence have discovered the alleged fraud because of the information contained in the FSA’s Final Notice published on 6 February 2013. The Bank also points to the widespread publicity about LIBOR over a period of months before the publication of the Final Notice.

The starting point is to consider what information was provided in the Final Notice as it relates to Boyse’s case. Unsurprisingly, there is much overlap between the two albeit that the Final Notice only related to the Japanese yen, the Swiss franc and the US dollar. It is clear however, as I have indicated, that Boyse’s case is based on the manipulation of LIBOR, not a specific LIBOR currency. The finding that there was a risk that three LIBOR currency rates had been “manipulated and undermined” is a precise reflection of the case Boyse wishes to pursue. Boyse’s case is that:

Paragraphs 44 and 45 of Mr Wass’ statement contain a section with the heading “Relevant Facts”. It is unnecessary to set out those paragraphs in full. He says Boyse was not aware of the findings of the FCA published on 6 February 2013 “for a significant time thereafter” and the factual summary that follows appears to relate to the period around that date. I observe however that the two investment properties held by Boyse had been sold in 2011 and 2012 (the second property being sold on 17

The principal facts that Boyse relies on are:

Boyse’s case on limitation falls into two main strands. The first concerns whose knowledge is relevant. The second concerns the character of the knowledge that could have been obtained and whether it could it only have been obtained by exceptional measures.

As to the first strand, Mr Auld QC submitted that the focus should be on Boyse and not on Mr and Mrs Sharma. Boyse is a Gibraltar based trust company with local directors that had been managing two commercial properties. However, the professional trustees were not involved in the sales process of the IRHP’s to Boyse. Boyse could call on the services of a property agent, a part-time bookkeeper and advice from the beneficiaries of the trust, Mr and Mrs Sharma. Mr Wass’ statement made on behalf of Boyse states in clear terms that: “Mr and Mrs Sharma are entitled to give directions to Boyse (and its trustees … who managed Boyse) in relation to the management of Boyse’s properties.”

However, the fact that an agent of Boyse could with reasonable diligence have discovered the fraud does not set time running. It is suggested that the directors of Boyse could not reasonably have been expected to read, or read about, the Final Notice or to have known about the LIBOR scandal from reports in the press.

If the knowledge of Mr and Mrs Sharma were attributed to Boyse for the purposes of section 32(1), Mr Auld submits:

The second strand concerns what knowledge means in the context of this claim. Mr Auld QC submitted that Boyse can easily bridge the short gap of some 13 days between the date of publication of the Final Notice by a need to obtain expert advice on the information that had been published. The news articles were not detailed and advice would have been needed to discover the Bank’s fraud. There was a reasonable need to obtain expert advice about the information that had been published in order to transform the information into knowledge. He submits that it is necessary for the claimant to have a sufficient understanding of the information that becomes available for it to become knowledge for the purposes of section 32(1). Another way of putting the same point is that Boyse had to take exceptional measures in order to discover what is alleged to be the LIBOR fraud. Mr Auld QC points out that it was not until after PAG v RBS that the formulation of implied LIBOR representations became widely understood.

It seems to me that the first line of submission concerning the identity of the person who is relevant for the purposes of section 32(1) needs to be looked at by reference to Boyse’s pleaded case without conflating Mr and Mrs Sharma with Boyse. Boyse’s case is that Boyse had a customer banker relationship with the Bank as a result of Mr and Mrs Sharma dealing with the Bank, that Boyse’s investments were held for Mr and Mrs Sharma, they made recommendations to Boyse on the basis of which the directors of Boyse made decisions and they placed trust and confidence in the Bank (paragraph 4.1). The Bank’s knowledge of Boyse’s business was obtained through its dealings in particular with Mr Sharma (paragraph 4.2) and that Mr and Mrs Sharma, and through them Boyse, were aware of LIBOR and its purpose (paragraph 4.3). The background to the sale of the IRHPs involved dealings between Mr Sharma and the Bank (paragraph 5A). The express LIBOR representation was made to Mr Sharma.

Whether Mr and Mrs Sharma are seen as the directing minds of Boyse, it seems to me that it is quite impossible for Boyse, for the purposes of section 32(1) to treat them as a mere agent of the company whose knowledge is not attributable to the company in the way that Aikens LJ had in mind in Allison v Horner. In any event, for the purposes of an objective test, the distinction between the directors of Boyse and Mr and Mrs Sharma is of limited significance.

As to the second strand of Mr Auld’s submissions, I accept that for the purposes of deemed discovery under section 32(1) the discovery has not taken place (the essential knowledge has not been acquired) unless there is some understanding of what the knowledge means. But it does not follow that the person who is deemed to have knowledge of the essential facts needs to know how to plead express and implied representations that are said later to have been made dishonestly. In this case the language used in the FCA Final Notice is not technical and any person of reasonable sophistication could not fail to understand what LIBOR rates being manipulated and undermined could mean.

It is clear that Boyse did not need to have developed its case or obtained advice before time started to run. A claimant has 6 years from the date on which it could with reasonable diligence have discovered the fraud and issue the claim.

The LIBOR fraud that is based upon what are alleged to be dishonest representations was apparent from the FCA Final Notice and the other findings. Boyse was clearly aware that the IRHPs used LIBOR and upon widespread publicity being given to the findings of the manipulation of LIBOR and the undermining of its integrity, that something had gone wrong. Boyse had sold both properties long before 6 February 2013 and had therefore suffered loss. Objectively, Boyse was on notice that something had gone wrong. It is pleaded that sale was necessary because of the cost of the IRHPs and their effect upon Boyse’s cash flow and profitability. A reasonably diligent person in Boyse’s shoes would have been alert to the widespread publicity about LIBOR even before 6 February 2013. The Final Notice was a trigger that started time running.

The uncomfortable truth for Boyse is that the claim form was issued just 13 days too late. Its attempts to bridge that short period are artificial because the 6 year period of limitation provides ample time to obtain advice and formulate a claim.

In the course of submissions, Ms John described the IRHP claim as being “a poorly disguised negligence claim” which is inadequately pleaded. I agree.

In the original claim, the IRHP claim was put forward in paragraphs 10, 12 and 12.3. In summary:

In the draft amended particulars of claim, paragraph 10.2 remains unchanged. In paragraph 10.1 a reference back to paragraph 5A has been added. Paragraph 5A provides background to the sale of the IRHPs and contains a good deal of material that is irrelevant to the claim.

Paragraph 7A has been added which is headed “Suitability of the IRHPs” but it does not provide adequate particulars of a case that the Bank knew the IRHPs were unsuitable. The high point of the paragraph is 7A.1 where it is said:

“As the Bank and/or its servants, agents or employees – and in particular David Macmillan – knew, or ought to have known or were reckless (given, in particular, their knowledge of both the Claimant and its business, and the nature of the IRHPs) the IRHPs were not suitable for the Claimant …”.

This is a rolled up plea that includes an allegation of negligence and fails to identify who, other than Mr Macmillan, is said to have known the IRHPs were unsuitable.

Paragraph 12.1 fails to provide particulars of fraud. The only change made to it is to refer back to paragraph 7A and this circularity does not improve what is clearly an inadequate claim. There is no distinct pleading of primary facts from which the inference of fraud may be drawn. There is nothing that tilts the balance in the direction of fraud. It also seems to me there is no reason to believe that Boyse, given a further opportunity, will be able to cure these defects.

The inadequate pleading of the case in fraud has a knock-on effect in relation to limitation. It is impossible to discern from the claim what Boyse could reasonably have discovered because there is an absence of primary fact. It is asserted in paragraph 17.3.1 that it was not until 10 October 2014 that Boyse was actually aware of the essence of the IRHP deceit claim and it could not with reasonable diligence have discovered the alleged fraud for a reasonable period after 21 October 2013 at the earliest. However, these assertions are not particularised or explained.

The claim arising from the LIBOR implied terms is clearly time barred. The device of seeking a declaration does not assist for the reasons already given.

There is nothing in the claim that can be salvaged. The particulars of claim and the claim form will be struck out, or judgment will be entered in favour of the Bank under CPR 24.2, and the application for permission to amend will be dismissed.

THE IRHP REVIEW