Nomura International Plc v Granada Group Ltd & Ors

A claimant abuses the court’s process by issuing a claim form solely to protect a possible limitation position when it cannot identify the essential contractual breach, tort, or misstatement alleged and cannot properly formulate particulars from the facts then known. A possible future claim, dependent on information yet to be supplied by another party, is not a known valid basis for proceedings.

Absence of an immediate intention to prosecute is not, by itself, abusive. But where the claimant lacks sufficient knowledge to begin preparing a properly pleaded claim without hoping that something will later emerge, that absence necessarily follows. Where the abuse lies in the improper commencement of proceedings, striking out is the appropriate remedy.

West LB had issued a broadly endorsed claim form against Nomura concerning finance provided for the Box Clever merger. Nomura entered a standstill agreement with West LB and, before West LB had particularised its claim, issued a claim form against Granada. Nomura alleged that Granada might be liable if information supplied by Granada had caused Nomura to incur liability to West LB.

Nomura did not then identify any particular inaccurate information, breach of duty, contractual obligation, or misrepresentation by Granada. It sought to defer service of particulars until West LB served its own particulars. Granada applied to strike out Nomura’s claim form as an abuse of process. The central issue was whether Nomura could issue protective proceedings to preserve a possible limitation position while it lacked a presently identifiable basis for a claim against Granada.

1. Granada’s application succeeded. The claim form and action were struck out. Nomura’s application concerning time for service of particulars did not require determination.

2. The starting point was the court’s power under the Civil Procedure Rules 1998 to prevent abuse of its procedure. The general approach in Johnson v Gore Wood & Co [2002] 2 AC 1 required a broad, merits-based assessment. Earlier procedural authorities remained relevant where they expressed the same underlying policy.

3. The decisive inquiry was whether, when it issued the claim form, Nomura could identify the essence of a tortious or contractual claim and, given time to marshal the facts then known, formulate proper particulars. A claimant who cannot do so has no known valid basis for proceedings and cannot properly issue a claim form in the hope that further information will reveal one. This applied the reasoning in Steamship Mutual Underwriting Association Ltd v Trollope & Colls Ltd (1986) 6 ConLR 11, West Bromwich Building Society v Mander Hadley & Co, and Barton Henderson v Merrett and Ernst & Young [1993] 1 LL.LR 540.

4. A concise claim form must identify the relevant contract and breach, or the essential acts or omissions constituting the alleged tort. For negligent misstatement, this includes identifying, at least in essence, the inaccurate advice or information and the alleged negligence. The requirements in the Civil Procedure Rules 1998 for a concise statement of the claim and verification by a statement of truth reinforced that conclusion.

5. Nomura had issued proceedings only as a protective measure. It could not identify any particular negligent act, breach, inaccurate information, or misrepresentation by Granada until West LB particularised its own case. A real prospect that a claim over might later arise did not cure that deficiency. The issue of the claim form was therefore an improper attempt to stop time running for an unformulated claim.

6. The flexible approach to remedies discussed in Asiansky Television plc v Bayer-Rosin [2001] EWCA Civ 1792 concerned abuse in the conduct of properly commenced proceedings. It did not assist where the commencement itself was abusive. Striking out was the only appropriate sanction.

not stated in the judgment.