WW Property Investments Ltd v National Westminster Bank Plc

Claims may be struck out, or summarily dismissed, where the pleaded case discloses no reasonable grounds or has no real prospect of success. A commercial interest-rate swap entered into for a genuine hedging purpose is not a wager merely because it has a value in favour of the bank at inception. The court may also treat repeated attempts to re-argue substantially identical points, previously rejected by the courts, as abusive and wasteful litigation. A claim based on an implied term must identify a term that is necessary or obvious for the contract and must plead the alleged breach and resulting loss coherently. A claim concerning a regulated redress review must identify the alleged breach in the operation of that review; allegations concerning the original sale do not suffice.

The claimant had borrowed from the defendant and entered into interest-rate collars and a swap. Following an industry review process, it accepted over £420,000 in redress for the collars under a settlement described as full and final, while no redress was offered for the swap.

The claimant commenced proceedings alleging, among other matters, that the hedging contracts were wagers, that the defendant had manipulated LIBOR, that related agreements should be rescinded, and that the defendant owed a tortious duty in conducting the review. The defendant applied to strike out the claim or obtain summary judgment. The claimant applied to amend its Particulars of Claim.

1. Applications and compromise. The claimant was refused permission to amend and its claim was struck out in its entirety. The claims concerning the collars were compromised by the settlement agreement and acceptance of redress in full and final settlement, subject only to additional losses pursued within the review process. The remaining issues therefore concerned the swap.
2. Wager issue. The claimant had no real prospect of establishing that the swap was a wager. Morgan Grenfell v Welwyn [1995] 1 AER 1 stated the modern test: an interest-rate swap is not a wager where at least one party entered it for a genuine commercial purpose rather than speculation. The swap was entered into to hedge borrowing costs. The alleged failure to disclose the day-one market value did not alter that conclusion.
3. The substantially identical arguments had already been rejected in Nextia Properties Ltd v Royal Bank of Scotland and Anor [2013] EWHC 3167 (QB) and Derek Gladwin Ltd v Barclays Bank plc. The previous Court of Appeal decisions, although arising at permission stages, were at least highly persuasive. Repeating the argument was pointless, expensive and wasteful, and amounted to an abuse of process.
4. LIBOR and related claims. The LIBOR allegations were vague and incoherent. They did not identify manipulation of the relevant GBP LIBOR rate, a clear breach, reliance, the contract to be rescinded, or coherent loss. The alleged implied term was not shown to be necessary or obvious under Marks & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC 72; 3 WLR 1843. The PPA and guarantees claim disclosed no legal basis and the relevant guarantors were not parties.
5. Tort claim. The proposed pleading did not coherently allege a breach in the operation of the review. It instead addressed the original sale of the products. It therefore had no real prospect of success as formulated, without prejudice to any separate properly formulated claim concerning deficiencies in operating the review.