Haresign v Clydesdale Bank Plc (t/a Yorkshire Bank)

A clear contractual supersession clause can extinguish earlier agreements or arrangements even if it is not labelled an entire agreement clause. Where a facility letter requires an extension or renewal to be in writing, an alleged oral promise of further finance cannot found a defence to enforcement of a guarantee. Article 6 does not entitle a defendant to a trial where the proposed case, even if proved, could raise no defence in law. Permission for a second appeal requires a real prospect of success and a question of general principle or importance, or another compelling reason. The provisions here displaced earlier funding arrangements and excluded reliance on later oral promises. Permission was refused.

Clydesdale Bank sued Simon Haresign and his co-defendant, Moti Stephens, under guarantees given in connection with finance provided to their company for a property development. District Judge Saffman granted the Bank summary judgment on 15 February 2010. His Honour Judge Behrens dismissed Mr Haresign’s appeal on 16 June 2010. Longmore LJ refused permission for a further appeal on the papers.

Mr Haresign renewed his application for permission to bring a second appeal. He relied on alleged oral commitments by the Bank to fund the whole development and argued that the Bank’s failure to do so defeated enforcement of the guarantee. The central issues were the effect of clauses 9.1 and 3.2 of the March 2007 facility letter, the availability of a trial under Article 6, and the second-appeal permission threshold.

1. Disposition. The renewed application for permission to bring a second appeal was refused.
2. Contractual effect. Clause 9.1 clearly provided that the March 2007 facility letter replaced all previous letters, agreements or arrangements concerning the provision of finance. Its effect was not weakened because it was not described as an entire agreement clause. It therefore superseded any earlier binding funding arrangement asserted by Mr Haresign.
3. Clause 3.2 provided that the facility would be cancelled unless the Bank agreed in writing to extend or renew it. Any alleged oral promise of further finance was consequently ineffective. Clauses 9.1 and 3.2 prevented the company from relying on an alleged breach of an earlier oral funding agreement and fatally undermined the proposed defence to the guarantee claim.
4. The legal conclusion did not depend on rejecting the alleged facts. The analysis below had assumed, for the purposes of the summary application, that the disputed oral assurances could be proved. Although Lord Justice Rimer expressed doubts about the factual strength of the case, he expressly did not decide the application on that basis.
5. Royal Bank of Scotland plc v. Carlyle [2010] CSOH 3 was distinguishable and of no present relevance. It concerned an arrangement between a bank and an individual acting for himself, without a company and without an equivalent supersession provision.
6. Article 6 did not require a trial where the only case proposed for trial, even if proved, could raise no defence as a matter of law. Nor did the application satisfy the requirements for a second appeal under CPR Part 52.13: there was no real prospect of success and no question of general principle or importance, or other compelling reason, warranting a further appeal.

1. Court of Appeal (Civil Division): Lord Justice Rimer refused the renewed application for permission to bring a second appeal: [2011] EWCA Civ 344.
2. Court of Appeal: Longmore LJ had refused permission on the papers on 21 December 2010.
3. Leeds County Court: His Honour Judge Behrens dismissed Mr Haresign’s appeal from District Judge Saffman’s summary judgment order.
4. Leeds County Court: District Judge Saffman granted the Bank summary judgment against the guarantors on 15 February 2010.