Elite Property Holdings Ltd & Anor v Barclays Bank Plc

Permission to amend requires a claim with a real, rather than fanciful, prospect of success. The claim must be more than merely arguable and supported by sufficient facts or material to justify the necessary inferences.

A contractual release is construed objectively, as a whole and in its relevant context. Broad language covering every claim connected with a transaction may encompass a later tort claim which depends upon that transaction, while a narrower exception for consequential loss may remain confined to loss flowing from the original wrong.

Unlawful means conspiracy requires a combination to use unlawful means, an intention to injure and resulting loss. A serious allegation of conspiracy must plead every essential ingredient and have a realistic evidential foundation.

Elite Property Holdings Ltd & Anor v Barclays Bank Plc arose from interest-rate hedging products sold by the respondent bank to two property companies. The companies alleged that the bank and its advisers conspired to take enforcement action in breach of an undertaking given by the bank to its regulator.

HHJ Bird had struck out the companies’ advice and regulatory-review claims and required any conspiracy claim to be fully particularised. HHJ Waksman QC subsequently refused permission to amend the particulars of claim and struck out the existing conspiracy and unlawful-interference claims. The companies appealed only in respect of the proposed unlawful means conspiracy claim.

The principal questions were whether the claim was barred by releases executed in 2014 and whether the proposed pleading disclosed a realistic case that the bank and its adviser had agreed to use unlawful means with an intention to injure. The appellants also sought to adduce fresh evidence.

1. Appeal dismissed unanimously. The proposed unlawful means conspiracy claim had no real prospect of success. The application to adduce fresh evidence was also refused.

2. The principles in Ladd v Marshall [1954] 1 WLR 1489, although no longer determinative, remained highly persuasive. The proposed evidence could have been obtained with reasonable diligence, would not have had an important influence on the result and might have required responsive evidence from the bank. Neither the interlocutory character of the appeal nor the overriding objective justified its admission.

3. Permission to amend required a real, rather than fanciful, prospect of success. The proposed claim had to be more than merely arguable and carry some degree of conviction, consistently with ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472. The court could reject a factual case which was implausible, self-contradictory or unsupported by contemporaneous documents, and could require sufficient particulars and material to justify the necessary inferences.

4. The releases were construed through the unitary and iterative approach described in Arnold v Britton [2015] AC 1619 and Wood v Capita Insurance Services Ltd [2017] AC 1173. Their definition of claims was broad and unambiguous. The conspiracy claim was connected with the sale of the hedging products because the regulatory undertaking said to constitute the unlawful means applied only by reason of those sales. The exception for consequential loss was narrower: it covered loss flowing as a knock-on effect of the mis-sale, not loss said to flow from a later breach of the undertaking or defective review. The claim was therefore released and had no real prospect of success.

5. Unlawful means conspiracy requires an agreement or combination to use unlawful means and an intention to injure. The complete ingredients were conveniently summarised in Digicel (St Lucia) Ltd v Cable & Wireless plc [2010] EWHC 774 (Ch). The draft alleged a combination but did not allege that the bank and its adviser agreed to use unlawful means. Their participation in meetings and knowledge of the companies’ circumstances could not supply the omission or create a real prospect of proving it. The material was also insufficient to establish the required intention to injure. This provided an independently sufficient ground for dismissing the appeal.

6. It was consequently unnecessary to decide whether exceptional circumstances justified enforcement, whether the regulatory reviewer had been misled, or the additional legal issues raised by the respondent’s notice.

• Court of Appeal (Civil Division): The court unanimously dismissed the appeal from the refusal of permission to amend and refused the application to adduce fresh evidence: [2019] EWCA Civ 204.

• London Mercantile Court, Queen’s Bench Division: HHJ Waksman QC refused permission to amend the particulars of claim and struck out the existing conspiracy and unlawful-interference claims by an order dated 21 July 2017. No neutral citation is stated.

• Mercantile Court: HHJ Bird had struck out the advice and regulatory-review claims on 20 December 2016 and required any conspiracy claims to be properly pleaded and particularised. That order led to the amendment application before HHJ Waksman QC.