Christopher Bernard Upham & Ors v HSBC UK Bank plc
[2024] EWHC 849 (Comm)
Mark William Taylor & Anor v Bank Of Scotland Plc
19 December 2023
[2023] EWHC 3185 (Ch)
High Court
Former hotel owners sued a bank for misleading them about interest rate hedging and a loan. The judge said the bank might have misled them about interest rates, so that part of the case continues. But the judge said the owners didn't have enough proof to show the bank lied about the loan's conditions, so that part of the case was dismissed.
Key Facts
- •Mark and Rachel Taylor, former shareholders and director of Taylor Hotels Limited, sued Bank of Scotland PLC for misrepresentation.
- •The misrepresentations related to interest hedging agreements (Collars) and a loan agreement.
- •The claim was based on alleged misrepresentations regarding LIBOR rates, expected interest rate rises, and a hedging requirement for the loan.
- •The claimants relied on s.32 of the Limitation Act 1980 to extend the limitation period.
- •The bank sought summary judgment on the time-barred interest rate rise representation claim and on the merits and limitation of the hedging requirement representations claim.
Legal Principles
Summary judgment can be granted if the defendant has no real prospect of successfully defending the claim.
CPR 24.2
The test for permitting an amendment is the same as for summary judgment: whether the amendment has a real prospect of success.
CPR, White Book para 17.3.6; Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33
Section 32 of the Limitation Act 1980 postpones the limitation period for fraud, concealment, or mistake until discovery or when discovery could have been made with reasonable diligence.
Limitation Act 1980, s.32
Under s.32, the claimant must show they could not have discovered the fraud without exceptional measures they could not reasonably have been expected to take; the test is objective and considers a reasonably diligent person in the claimant's position.
Bilta v SVS Securities plc [2022] EWHC 723 (Ch); Paragon Finance v Thakerar [1999] 1 All ER 400; Gresport Finance v Battalagia [2018] EWCA Civ 540
The 'statement of claim' test applies in fraud cases under s.32: the claimant must be able to plead a complete cause of action.
Seedo v El Gamal [2023] 3 WLR 505
Acts or omissions of a claimant's agent are not attributable to the claimant under s.32.
Peco Arts Inc v Hazlitt Gallery [1983] 1 WLR 1315
Outcomes
Summary judgment was refused for the interest rate rise representation claim.
The court found the inquiry under s.32 fact-sensitive, requiring consideration of the company's resources and the steps that could reasonably have been taken to discover the misrepresentation. The court also noted the claimants' reliance on the FCA LIBOR investigation as a trigger for considering dishonesty, and that the claimants' solicitors were not previously instructed to investigate dishonesty.
Summary judgment was granted for the hedging requirement representations claim.
The court found the claimants had no real prospect of success on the merits. The court interpreted the representations and concluded that they did not falsely represent that hedging was a condition precedent imposed by the credit sanctioning division. The court also considered, and rejected, the claimant's argument regarding limitation.