Popek v National Westminster Bank Plc

A claim may be struck out at the start of trial where it is clear that the whole or part of it is bound to fail. Lateness is not necessarily fatal under the CPR, although it may affect costs. A single joint expert’s report ordinarily constitutes the evidence on the issues covered by it. Further questioning or cross-examination requires permission and should be arranged in advance. A limitation defence cannot be answered by an unpleaded case under section 32 of the Limitation Act 1980. A fiduciary-duty principle concerning fairness and disclosure in a transaction between fiduciary and principal did not apply to complaints about subsequent contractual performance.

The claimant alleged that the defendant bank had negligently, contractually and fiduciarily failed to advise on, or restructure, the financing of a housing development. He also alleged excessive interest charges and bad faith. The bank pleaded limitation and that the claim disclosed no reasonable cause of action.

After a jointly instructed expert concluded that the overdraft financing was appropriate and that a later mortgage application could not properly have succeeded, the deputy High Court judge struck out the statement of claim under CPR Part 3.4(2)(a) and dismissed the action. The claimant sought permission to appeal, challenging the use of the expert report, the limitation ruling and the treatment of the fiduciary-duty allegations.

1. Disposition. The application for permission to appeal was dismissed, and the appeal was dismissed with costs. The court concluded that there was no real prospect of reversing the Recorder’s decision.
2. Late strike-out application. Although striking out a claim at the start of trial is unusual, the approach in Halliday v Shoesmith did not require its full rigour in every case under the CPR. Where the claim is clearly bound to fail, the court may entertain a late application. Any lateness may be reflected in the costs order. Avoiding unnecessary evidence and submissions was consistent with the overriding objective.
3. Single joint expert. The Recorder was entitled to decide the application on the basis of Miss Blyth’s report. Under P v Mid Kent Area Health Care National Health Service Trust, the report of a single joint expert is ordinarily the evidence in the case. Written questions are available for clarification, and any amplification or cross-examination should be restricted and arranged in advance. The claimant’s advisers had asked questions but had not challenged the factual basis of the expert’s conclusion or shown that further questioning was required.
4. Limitation. The possibility of relying on section 32 of the Limitation Act 1980 could not be taken into account. The claimant had not pleaded deliberate concealment or supplied the particulars necessary to tell the defendant the case it had to meet. The claims accruing before 8 October 1991 were therefore statute-barred.
5. Fiduciary duty. The principle stated by Millett LJ in Bristol & West Building Society v Mothew, concerning the fiduciary’s duty to establish fairness and full disclosure when dealing with the principal, concerned rescission of the original transaction. It did not govern allegations about the bank’s later performance of the contract, particularly where the pleaded fiduciary allegations duplicated the contract and negligence allegations. The post-7 October 1991 allegations were also bound to fail on the expert evidence.

• Court of Appeal (Civil Division). The court dismissed the application for permission to appeal and dismissed the appeal with costs.
• Queen’s Bench Division, Leeds District Registry. Mr Recorder Stewart QC, sitting as a Deputy High Court Judge, struck out the statement of claim and dismissed the action under CPR Part 3.4(2)(a) on 18 May 2001.