Crestsign Ltd v National Westminster Bank Plc & Anor

At the permission stage, a proposed ground has a real prospect of success where the material advanced discloses a proper factual basis for the challenge or raises a real question about the correctness of the decision below. On a renewed application, permission may be granted despite an earlier refusal on the papers. The court does not determine the merits of the underlying negligence claim at that stage. Permission was granted on grounds concerning the scope of an alleged information duty relating to a complex interest-rate swap and the discharge of that duty concerning break costs.

Crestsign Ltd v National Westminster Bank Plc & Anor brought a negligence claim for economic loss against National Westminster Bank plc and The Royal Bank of Scotland plc, alleging the negligent mis-sale of a complex interest-rate swap. Mr Tim Kerr QC, sitting as a deputy High Court judge in the Chancery Division, dismissed the claim in [2014] EWHC 3043 (Ch).

On the papers, Lewison LJ granted permission on the first ground but refused permission on the second and third. The renewed application concerned whether those two grounds had a real prospect of success.

Sir Colin Rimer granted the renewed application for permission to appeal on grounds 2 and 3. The merits of the negligence claim and the scope of the alleged duties were left for the substantive appeal.

1. Information duty. Ground 2 challenged the lower court’s conclusion that the respondents’ information duty was confined to providing information and explanations about the products they wished to sell, and did not require explanation of different available hedging products, including an interest-rate cap. Although Lewison LJ considered the lower court’s approach plainly correct, the further written and oral submissions disclosed a proper factual basis for the proposed wider-duty argument. The ground therefore had a real prospect of success.
2. Break costs. Ground 3 challenged the lower court’s conclusion, at paragraphs 165 to 167, that the respondents had discharged the information duty in relation to break costs. The submissions raised a real question about the correctness of that conclusion, giving the ground a real prospect of success.
3. Order. Permission to appeal was granted on grounds 2 and 3. Permission on ground 1 had already been granted by Lewison LJ.

• High Court of Justice, Chancery Division: Mr Tim Kerr QC, sitting as a deputy High Court judge, dismissed the negligence claim in [2014] EWHC 3043 (Ch).
• Court of Appeal (Civil Division): Lewison LJ granted permission on ground 1 and refused it on grounds 2 and 3 on the papers. On renewal, Sir Colin Rimer granted permission on grounds 2 and 3 in [2015] EWCA Civ 986.