Graiseley Properties Ltd & Ors v Barclays Bank Plc

Permission to amend pleadings should be granted where the proposed claim is sufficiently arguable to have a real prospect of success. At that stage the court should not determine disputed facts, assess whether the claim will ultimately succeed, or conduct a mini-trial.

Implied representations may be pleaded where the factual circumstances arguably support an inference that they were made, understood in the alleged sense, and authorised by the principal. Questions of knowledge, obviousness, authority and appropriate remedies are ordinarily matters for trial. Contractual terms may be implied where, on the relevant construction and background, it is clearly arguable that the reasonable person would understand the contract to contain them.

The claimants sought permission to amend their particulars of claim in a proposed LIBOR test case. They wished to plead that Barclays had made implied representations concerning the integrity and independence of LIBOR, which induced loan and hedging transactions and were fraudulent. They also sought to plead, in the alternative, implied contractual terms addressing the same matters.

Barclays objected that the representations could not properly be implied, that the alleged knowledge and misleading sense were not sufficiently obvious, that the representations were unauthorised, and that the proposed remedies were defective. The central issue was whether the proposed amendments had a real prospect of success.

1. Permission to amend. The proposed amendments were sufficiently arguable and were permitted. The court’s task was limited to deciding whether the pleaded claims had a real prospect of success. It was not to determine disputed facts or conduct a mini-trial (paras [13]–[14]).
2. Implied representations. The alleged representations concerning the BBA definition of LIBOR, Barclays’ knowledge of manipulation, and its future intentions were capable of being implied. The regulatory findings concerning the knowledge of derivatives traders and senior management made it at least arguable that the representations had been made. Whether they were in fact made was a factual issue for trial (paras [15]–[19]).
3. Obviousness and deceit. In a deceit claim, the representor must understand that the implied representation is being made and that it bears the alleged misleading meaning. It was seriously arguable that senior management knew that customers were entering products referable to LIBOR and would assume that it was an independent benchmark rather than a rate manipulated for Barclays’ benefit (paras [20]–[22]).
4. Authority. The representations were arguably authorised. The case was arguable both on the basis that Barclays was responsible for persons whose guilty knowledge was imputable to it and on the basis of implied or ostensible authority in those negotiating and issuing the relevant contracts (paras [23]–[26]).
5. Remedies and implied terms. Issues concerning rescission, repudiation and damages depended on facts to be determined at trial and were not suitable for summary disposal at the amendment stage. The proposed implied terms were fairly arguable under the approaches discussed in AG for Belize v Belize Telecom Ltd [2009] 1 WLR 1988 and Crema v Cenkos Securities plc [2011] 1 WLR 2066 (paras [27]–[29]).

Not stated in the judgment.