A E EL BOUDI & Anor v Barclays Bank Plc

Permission to appeal should be refused where the proposed grounds disclose no real prospect of success. The Court of Appeal is slow to interfere with a trial judge’s primary findings of fact, especially assessments of oral evidence and credibility, unless the conclusion is against the weight of the evidence. The ordinary relationship between a banker and customer, particularly a commercial customer, is that of debtor and creditor rather than fiduciary. A fiduciary relationship may arise where advice is expected and given, but a customer’s presentation of options for the bank to decide as lender does not itself create one. A bank may explain the nature of a guarantee without assuming a fiduciary duty, although wider advice about the wisdom of the transaction may take the relationship into an area of confidentiality.

Mr and Mrs El Boudi applied for permission to appeal from an order of the Birmingham County Court dated 31 July 2000, by which His Honour Judge Eccles QC decided preliminary issues in favour of Barclays Bank Plc. The issues concerned the execution and effect of personal guarantees and a second charge over the applicants’ home, alleged representations that Nicelink Limited’s overdraft would be increased to £30,000, and whether a fiduciary relationship existed between the bank manager and the applicants. The trial judge rejected the applicants’ factual case and held that the relationship remained an ordinary banker–customer relationship. The central questions were whether there was a realistic basis for challenging those findings and whether the fiduciary-duty ground had a real prospect of success.

Application dismissed. Lady Justice Arden concluded that none of the proposed grounds disclosed a real prospect of success.

1. Findings of fact. The essential challenge was to the trial judge’s rejection of the alleged £30,000 overdraft representation and his finding that the applicants had executed unlimited guarantees. The Court of Appeal emphasised that it does not rehear the evidence. It is particularly reluctant to interfere with primary findings based on oral testimony and credibility. The judge had been entitled to prefer the bank manager’s evidence, supported by contemporaneous authorisation and diary notes. His conclusion could not reasonably be described as against the weight of the evidence.
2. Procedural grounds. The trial judge had discretion to control the timetable and had given Mrs El Boudi fair warning, including additional time, for cross-examination. The proposed new evidence from a bank clerk was unsupported by a statement and its content was uncertain. It therefore provided no proper basis for permission. The judge’s explanation of the legal effect of the documents, if confined to the matter described, was unobjectionable. Nor could the court assume that a solicitor’s discussion with a witness before recalled evidence had improperly influenced that evidence.
3. Fiduciary duty. The ordinary banker–customer relationship is one of debtor and creditor. A fiduciary relationship may arise where a relationship in which advice is expected and given has commenced. The applicants had presented options for the bank, as lender, to determine; they had not sought advice about what they or the company should do. That circumstance did not create a fiduciary relationship.
4. Guarantees and wider advice. In ordinary banking business, a banker may explain the nature of a proposed guarantee without creating presumed undue influence. Wider advice on matters germane to the wisdom of the transaction may, however, enter the area of confidentiality. The judge had found no such circumstances on the evidence.

• Court of Appeal (Civil Division): On 28 March 2001, Lady Justice Arden dismissed the application for permission to appeal: [2001] EWCA Civ 580.
• Birmingham County Court: His Honour Judge Eccles QC decided preliminary issues in favour of Barclays Bank Plc by order dated 31 July 2000.