Denaro (UK) Limited (in liquidation) v Anthony Bracken & Ors

On applications to strike out and amend pleadings, a proposed amended case must give fair notice, be coherent and properly particularised, and have a realistic prospect of success under the summary-judgment merits test. The court may assess realistically available evidence but must not conduct a mini-trial. Alleged corporate dishonesty must be tied to the subjective dishonesty or knowledge of identified natural persons. Primary facts may support dishonesty cumulatively, even if individual allegations could suggest negligence. A Quincecare claim may rely on the bank’s accumulated knowledge over time; it need not map every red flag to every payment, but it must identify the circumstances relied upon. Permission was granted subject to clarifying the knowledge case and excluding unspecified circumstances; the strike-out application was dismissed.

The liquidators of the claimant company brought claims against its former directors and two Barclays entities, alleging that the directors had operated a Ponzi scheme and that the bank was liable for dishonest assistance and breach of the Quincecare duty. The bank applied to strike out those claims. The claimant applied to amend its Particulars of Claim. The court considered whether the existing pleading disclosed reasonable grounds, whether the Draft Amended Particulars were coherent, sufficiently particularised and viable, and how the allegations of individual knowledge and bank notice had to be framed. The fourth defendant’s removal was uncontentious.

Disposition

Permission to amend was granted subject to two specified alterations. The strike-out application was dismissed after amendment. Barclays Bank PLC was removed as a defendant. The revised and properly verified pleading had to be filed and served within 14 days; costs and consequential matters were adjourned.

Applicable approach

Under the Civil Procedure Rules 1998, an incoherent or inadequately pleaded statement of case may be struck out, while permission to amend requires sufficient detail, coherence, proper particularisation and a realistic prospect of success. The court applied the approach summarised in Amersi v Leslie [2023] EWHC 1368 (KB). The court could consider evidence realistically available at trial, but could not conduct a mini-trial.

Dishonest assistance

The existing claim failed to disclose reasonable grounds because it did not distinctly plead the facts said to establish Mr Wileman’s knowledge of several alleged misrepresentations and omitted the true position for two allegations. The pleaded facts were nevertheless capable, cumulatively, of supporting dishonesty and were not incoherent. Under Stanford International Bank (in liquidation) v HSBC Bank Plc [2021] EWCA Civ 535, corporate dishonesty had to be grounded in the dishonesty of an identified natural person. The Draft APOC therefore required clarification of the reference to the Bank and/or Mr Wileman. Other factual disputes were matters for trial.

Quincecare claim

Following Philipp v Barclays Bank UK Plc [2024] AC 346, the bank’s duty depended on whether it was put on inquiry by circumstances suggestive of dishonesty and failed to make reasonable inquiries. The claim could rely on accumulated knowledge over time and did not need to map every red flag to every transfer instruction. It could not, however, rely on unspecified circumstances. The Draft APOC was otherwise adequate, and the relevant wording was confined to the matters particularised at paragraph 152.