CCP Graduate School Limited v National Westminster Bank Plc & Anor

Summary judgment and strike-out applications require the court to distinguish between claims that are merely fanciful and claims requiring factual investigation. A court should not conduct a mini-trial or strike out a developing and fact-sensitive cause of action unless failure is clear. A bank receiving clear and authorised payment instructions owes no Quincecare duty to refuse payment merely because the customer was deceived by an APP fraud. However, a possible post-notification duty to take reasonable steps to retrieve fraudulently transferred money may raise an arguable, developing issue which should proceed to disclosure and trial.

The claimant alleged that it had been induced by an APP fraud to make payments from its account with National Westminster Bank plc to an account with Santander UK plc. It claimed that NatWest should have prevented the payments and later attempted to recover them, and that Santander should have prevented further dissipation or assisted recovery.

Both defendants applied for summary judgment and strike-out. The claimant also sought permission to amend its case, principally to plead a retrieval duty. The central issues were limitation, the effect of [2023] UKSC 25 on any Quincecare duty, whether the proposed amendments introduced new causes of action, and whether a retrieval duty owed by a receiving bank was sufficiently arguable.

1. NatWest: limitation. The causes of action concerning the making of the payments accrued when the money left the NatWest account. They were therefore outside the six-year periods under sections 2 and 5 of the Limitation Act 1980. Section 32(1)(c) did not extend time because mistake was not an essential ingredient of the pleaded contractual or tortious duty claims. Those claims were struck out.
2. NatWest: payment instructions. Under [2023] UKSC 25, a bank’s duty of care does not require it to refuse a clear and valid payment instruction given personally by its customer. The pleaded case was a Quincecare case, not a breach-of-mandate case. The account number and sort code identified the recipient under the applicable terms, so the payments were authorised. The alternative case was summarily dismissed.
3. Retrieval duty. The Supreme Court decision left arguable the possibility of a duty arising after the customer notified the bank of fraud, requiring reasonable steps to retrieve funds. The proposed case against NatWest was a new cause of action and did not arise from the same or substantially the same facts as the existing prevention-of-payment claim. The court therefore had no power under CPR r17.4 to allow it. If it had power, the amendment would have been allowed because disclosure and evidence about banking practice could materially affect the outcome.
4. Santander. The existing pleading sufficiently identified a case that Santander should have taken reasonable steps to retrieve funds after notification of fraud. The Quincecare aspect was struck out, since Santander owed no such duty to the claimant as a non-customer and the account-holder’s payment instructions were authorised. The retrieval-duty case was not struck out: the law was uncertain, the alleged duty was fact-sensitive, and further disclosure might materially assist. The limitation issue remained arguable for acts or omissions on 18 October 2016, because that day was excluded where the cause of action accrued during the day.
5. Amendment. The proposed clarification of the retrieval-duty case against Santander did not introduce a new claim, and could be permitted insofar as it corrected an obvious error or anomaly and arose from the same or substantially the same facts.

First-instance decision. The judgment does not state any prior appellate decision in this litigation.