Bournemouth & Boscombe Athletic Football Club Ltd v Lloyds TSB Bank Plc

Relief from sanctions is discretionary and must be assessed against the factors in CPR 3.9. The court should consider the interests of the administration of justice, promptness, the reason for default, whether the failure was intentional, and prejudice. Repeated procedural default, absence of a satisfactory explanation and an attempt to pursue substantially the same claim after an earlier action was struck out may justify refusing an extension of time.

A bank’s ordinary relationship with its customer is contractual rather than fiduciary. It does not ordinarily give rise to a duty to disclose its own past breaches. A claim which discloses no viable duty of care may be struck out, and summary judgment is appropriate where there is no real prospect of success.

The claimant brought proceedings alleging breach of an agreement under which the defendant bank had provided finance, together with alternative tortious claims based on alleged duties of care and disclosure. The claimant had previously brought substantially identical proceedings, which had been struck out after it failed to serve Particulars of Claim.

In the present proceedings, the Claim Form was served on time but the Particulars of Claim were served late. The claimant applied for an extension of time. The bank applied to strike out the claim, alternatively for summary judgment or a stay pending payment of earlier costs.

1. Extension of time. The claimant’s application was made after expiry of the relevant period and therefore fell to be considered under CPR 3.9. The court applied the approach discussed in Sayers v Clarke Walker [2002] EWCA Civ 645 and Sabrina Robert v Momentum Services Ltd [2003] EWCA Civ 299.
2. The relevant circumstances included the interests of the administration of justice, the lack of promptness, the intentional nature of the failure, the absence of a good explanation and the further prejudice to the bank. The claimant had twice issued proceedings at the end of the limitation or service period and had failed to comply with the requirements for serving Particulars of Claim. It had also sought a further substantial adjournment. Those circumstances made it inappropriate to grant relief.
3. The present claim substantially repeated the earlier claim. Applying the reasoning in Securum Finance Ltd v Ashton [2001] Ch 291, allowing the claim to proceed would give the claimant an impermissible further opportunity to litigate matters which should have been pursued properly in the first action.
4. Tortious claims. The relationship between a bank and its customer is contractual and is not ordinarily fiduciary. It therefore gives rise to no general duty of disclosure. Following Suriya and Douglas v Midland Bank Plc [1999] 1 All ER (Comm) 612, the alleged duty of disclosure was unsustainable. The court also applied Bell v Lever Brothers Ltd [1932] AC 161 in holding that there was no separate duty to disclose the bank’s own past breaches. The alternative claims disclosed no cause of action and were bound to fail.
5. Contract claim. Although the claimant suggested that the bank’s demand for repayment was wrongly based, the court considered that the bank had ample alternative grounds for making the demand. The claimant was hopelessly insolvent, had failed to make required repayments and interest payments, and was in breach of the agreement’s default provisions. In any event, the claimant’s case had no real prospect of success under CPR 24.2.
6. The claimant’s application for an extension of time was dismissed and the bank’s application to strike out the Claim Form was allowed.