Haydon-Baillie & Ors v Bank Julius Baer & Co Ltd & Ors

On summary applications, the court must avoid a mini-trial but may reject factual assertions that have no real substance or are contradicted by contemporaneous documents. A claim should proceed where a fuller trial investigation might affect the outcome. A mortgagee owes the mortgagor equitable duties to act in good faith, for proper purposes and to obtain the best price reasonably obtainable, but owes no general duty of care. A solicitor normally owes no duty of care to the opposing party. A later claim is abusive only after a broad, merits-based assessment of whether the court’s process is being misused. A genuinely arguable proprietary claim to chattels was therefore allowed to continue, subject to proper pleading and case-management conditions, while the other claims were struck out or given summary judgment.

The claimants brought three related actions arising from the Bank’s enforcement of a mortgage over Wentworth Woodhouse, its sale of the property in 1999, and later dealings with the property and its contents. The defendants applied to strike out the claims and/or obtain summary judgment.

The pleaded allegations included defects in the possession proceedings, refusal to permit redemption, improper sale, breaches of duty by the Bank and its solicitors, failure to transfer title, proprietary claims concerning fixtures and chattels, conversion, and alleged misconduct in later dealings with the property. During the hearing, substantial parts of the pleaded case were abandoned. The central remaining issue was whether any properly pleaded claims concerning the protected fittings and other contents had a realistic prospect of success.

1. The applications were summary applications. The court applied the approach in J D Wetherspoon v Van De Berg [2007] EWHC 1044 (Ch). It considered whether the claims were realistic rather than fanciful, avoided a mini-trial, and took account of evidence reasonably expected to be available at trial. It could nevertheless reject assertions contradicted by contemporaneous documents or lacking real substance.

2. The allegations concerning the demands for repayment, refusal of redemption, marketing and sale, information about the sale, and distribution of the surplus were factually and legally unfounded. The claim that title to the property did not pass to Macaw also failed. The Bank had power to sell the property, and the inability to transfer title to some chattels would not invalidate the transfer of the property as a whole.

3. The Bank owed the mortgagor equitable duties to act in good faith, for proper purposes, and to obtain the best price reasonably obtainable. It did not owe a general duty of care. It owed no duty of care or equitable duty to the trustees of the Succession Trust. The solicitors acting for the Bank owed no duty of care to the claimants, who were their opponents in the possession and sale matters.

4. The capacity allegations did not justify reopening the 1998 possession order. Capacity is issue-specific, but the question arose only if the order was challenged. The claimants had not sought to set aside that order, and any such application in 2005 would have been too late.

5. The proprietary claim concerning the protected fittings was not an abuse of process. The earlier injunction proceedings had contemplated a later claim, the issue had not previously been adjudicated, and the delay, considered with the other circumstances, did not justify striking out an otherwise properly arguable claim. The claimants were required to identify the proper claimant and defendants and serve a properly pleaded case.

6. Whether the protected fittings were fixtures or chattels depended on the extent and purpose of annexation. That issue could not be determined summarily. If any items remained chattels, the Bank could not pass title to them and the relevant owner might recover them. A conversion claim could also proceed only if it identified the legal ingredients, the specific acts of each defendant, and the basis of damages.

7. Claims concerning other scheduled items and historic artefacts could continue only to the extent that a defendant asserted an interest in them and the claimant served an approved pleading. Claims against defendants with no arguable involvement, including the professional advisers and auditors, were struck out or dismissed. Further directions, costs, pleading requirements and the possible application of the totally-without-merit provisions were reserved.

This was a first-instance decision on applications to strike out and for summary judgment in three related High Court actions. The judgment records no appeal decision.