889 Trading Limited v Clydesdale Bank Plc & Ors

A second claim may constitute an abuse of process where an earlier claim was struck out for deliberate non-compliance with an unless order, particularly where the claimant had the opportunity to resolve the dispute in the first proceedings. The court must nevertheless examine the circumstances of the default, the burden imposed by renewed litigation and the interests of justice. Alleged fraud or non-disclosure does not automatically prevent a finding of abuse; it must be connected to a recognised cause of action or shown to have materially affected the decision to default. Pleadings must state the facts necessary to disclose a complete and recognisable cause of action. The Bankers Books Evidence Act 1879 has a narrow scope and does not extend to all documents held or created by a bank.

889 Trading Limited brought proceedings against Clydesdale Bank and four individuals concerning lending and valuation matters arising from the purchase of commercial property in 2007. Earlier proceedings against the Bank and receivers had been struck out after 889 failed to comply with an unless order requiring a Directions Questionnaire.

889 then issued fresh proceedings, repeating the core allegations concerning an alleged misrepresentation about a valuation report and adding allegations of fraud, conspiracy and unexplained bank-account transactions. It also sought disclosure of documents under CPR Part 31 and section 7 of the Bankers Books Evidence Act 1879. The issues were whether the new proceedings were abusive, whether the pleadings disclosed reasonable grounds, and whether disclosure should be ordered.

1. Strike out for abuse. The Claim Form and Particulars of Claim were struck out under CPR 3.4(2)(b). The earlier proceedings had provided 889 with an opportunity to have its dispute with the Bank determined. Its failure to comply with the unless order was deliberate: it chose to pursue other courses, including reliance on a supposed default judgment and referral of the allegations to prosecuting and regulatory authorities.
2. The court applied the principles stated in Harbour Castle v David Wilson Ltd [2019] EWCA Civ 505, read with Tinkler v Ferguson [2021] EWCA Civ 18 and Aktas v Adepta [2010] EWCA Civ 1170. Deliberate non-compliance is not automatically abusive, but it is liable to make renewed proceedings abusive where the claimant ought to have used the first proceedings to resolve the dispute. The court must consider the circumstances of the default, fairness to the defendant, the burden on court resources and the effect on public confidence in the administration of justice.
3. The alleged suppression of the 2007 Documents did not alter that conclusion. One document had been referred to in the Defence, the proceedings had not reached disclosure, the documents had been provided to the police, and 889 knew their essential contents before deciding not to comply. The principle that fraud unravels all did not permit fraud to be asserted as a general answer to abuse; it operated within a recognised claim or procedure, such as deceit or setting aside a judgment obtained by fraud.
4. Failure to disclose reasonable grounds. The claims against the individual defendants disclosed no reasonable grounds. No effective relief was sought against them and the alleged duties, representations, fraud and conspiracy were not pleaded with the facts necessary to formulate complete causes of action. The distinct claim concerning bank-account transactions was also inadequately pleaded and added nothing after the Bank supplied explanations. The remaining claims were therefore struck out under CPR 3.4(2)(a).
5. Disclosure. The Disclosure Application was dismissed. Section 7 of the Bankers Books Evidence Act 1879 could not be invoked after the proceedings had been struck out. In any event, the documents sought were outside the narrow statutory meaning of bankers’ books, and early extended disclosure was not justified by exceptional circumstances.