Bank of Scotland Plc v Peter Lisney Hoskins
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 17 November 2021 |
| Neutral Citation | [2021] EWHC 3038 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: F4PP0192 |
[2021] EWHC 3038 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
BUSINESS LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: F4PP0192
Tim Calland (instructed by TLT LLP) for the Claimant
Gerard McMeel QC (instructed by GL Law) for the Defendant
Hearing dates: 1–2 July 2021
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is my judgment on an application by the claimant by notice dated 21 December 2020, for an order striking out the defence and counterclaim of the defendant, alternatively for summary judgment. It is made in the context of a claim brought by the claimant for possession of a dwelling-house and surrounding land, owned by the defendant but mortgaged to the claimant, on the basis that the mortgage repayments are in arrears. The defendant not only defends the possession claim, but has also made a counterclaim for damages for alleged breaches of contract (duties of good faith) and in “fraud”, both in his own right and as assignee of a company called EiRx Therapeutics plc (“EiRx”).
Procedure
The claim form was issued on 14 May 2019 in the County Court at Plymouth, seeking possession of Morwell House, Tavistock, Devon on the grounds of mortgage arrears. It is said in the particulars of claim dated 10 May 2019 that the loan secured on the property was for £2,625,000, and that at the date of issue there were arrears of £150,854.52 in repayments. It is also said that the amount required to redeem the whole mortgage as at 10 May 2019 was £2,911,392.11, including interest and costs. Whilst the claim for possession is denied by reason of a defence and counterclaim, no alternative case is made by the defendant as to the numbers set out in the particulars of claim. On 17 September 2019 DDJ Healy, sitting in the County Court at Plymouth, transferred the claim to the Bristol District Registry of the High Court, Chancery Division, on the basis that the defendant intended to raise a substantial counterclaim.
On 6 January 2020 I gave directions for the future conduct of this claim. A defence and counterclaim was served on 17 January 2020 and a reply to the defence and counterclaim was served on 3 March 2020. Because of the effect of the Covid-19 legislation, it was necessary to serve a reactivation notice on 29 September 2020. Following this, the present application notice was issued on 21 December 2020. It was supported by a witness statement dated the same day by the claimant's solicitor Emma Davey, and one exhibit. This exhibit included documents from an earlier set of possession proceedings begun in 2021 between the same parties, but also involving the defendant's wife as second defendant (“the first proceedings”). This claim had been compromised, and a Tomlin order made, following a successful mediation of the dispute. The settlement agreement by which the claim was compromised is however very much in issue in the present proceedings. On 6 January 2021 DJ Woodburn directed that the application of 21 December 2020 be listed before me. (In fact, the order of 6 January was not sealed until 12 April 2021. I do not know why.)
I should mention that some aspects of the relief sought by the application of 21 December 2020 are no longer live, having already been dealt with. These include an application by the claimant for permission in this claim to refer to the witness statement of the defendant dated 2 July 2013 in the first proceedings. In addition to this, the defendant, by notice dated 16 June 2021 applied for permission to refer in this claim to a witness statement of Christopher Strain in the first proceedings. This was not opposed, and at the hearing I granted the application. I also gave the defendant permission to file and serve a reply to the defence to counterclaim of the claimant.
Background
Before I go further, I should say something about the background to this claim and the first proceedings. The claimant is of course a well-known bank, engaged in retail and commercial banking for individuals and businesses. After a long independent history, it merged with Halifax plc (formerly the Halifax Building Society) to form HBOS. It was badly affected by the worldwide credit crunch of 2007–08, and was taken over at the beginning of 2009 by Lloyds TSB Bank. It remains part of the Lloyds Group, though trading under the name Bank of Scotland. The defendant is a biotechnologist and entrepreneur in the biotechnology sector, and well known in the City of London. He invested in and promoted EiRx, as a company listed on the Alternative Investment Market.
The regulatory context in which the event is the subject of this litigation took place should be noted. The claimant was an authorised deposit taker under the Financial Services and Markets Act 2000, and was then regulated by the Financial Services Authority. It was required to act in accordance with that Authority's rules. EiRx was required by the rules of the Alternative Investment Market to comply with the rules of the Financial Services Authority. These rules concerned amongst other things announcements concerning the company and its shares that were made to the market, and required the company to appoint a professional person as the nominated adviser, to advise on the content of announcements.
The first proceedings arose from an overdraft facility granted by the claimant to the defendant, and secured on Morwell House. The monies borrowed using this facility were apparently put into EiRx. When these were not repaid, the claimant brought proceedings against the defendant and his wife for repayment and for possession of Morwell House. The defendant counterclaimed for damages in respect of losses claimed to have been suffered by an alleged failure on the part of the claimant to honour its lending commitments to EiRx. The defendant counterclaimed not only in his own right but also as assignee of the company. As I have said, the claim was ultimately compromised by an agreement dated 24 December 2013, which was then embodied in a Tomlin order of the court. I will return to this agreement later.
The present proceedings arise, as previously indicated, out of a different claim by the claimant against the defendant. This is the loan made to the defendant in order to purchase Morwell House, which loan was secured by a mortgage on the property. Repayments having fallen into arrears, the second proceedings have been issued. However, the defence and counterclaim to these proceedings raise issues based on more or less the same facts as the counterclaim in the first proceedings. Accordingly, the claimant says that the counterclaim (at least) is barred by the settlement agreement of December 2013. The defendant rejects this view, and for good measure argues that the settlement agreement is liable to be set aside in any event, either because of fraudulent nondisclosure or because of breach of contractual duties of good faith. In addition, the claimant takes other points on the formulation of the counterclaim, which I shall mention later. The application accordingly seeks an order striking out the counterclaim (though not the significant part of the defence), or in the alternative summary judgment on the counterclaim on the basis that it has no real prospect of success.
In November 2015, a report was published by the Bank of England, the Prudential Regulation Authority and Financial Conduct Authority, entitled The failure of HBOS plc (HBOS) [-] a report by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority. This report was critical of the board and management of HBOS, as it then was. The Defence and Counterclaim in these proceedings relies heavily on that report.
This application
The relevant orders sought by the application notice in this case are as follows:
“2. The Defence and Counterclaim (save for paragraphs 65–69 of the same) be struck out under CPR rule 3.4(2) on the ground that (i) it discloses no reasonable ground for defending the claim or bringing the counterclaim, (ii) it is an abuse of process and/or likely to obstruct the just disposal of the proceedings, and (iii) there has been a failure to comply with a rule and/or practice direction.
3. Alternatively to 2 above, the Defence and Counterclaim (save for paragraphs 65–69 of the same) be summarily dismissed under CPR rule 24.2 as they have no real prospect of succeeding and there is no other good reason why they should be disposed of at a trial”.
Law
Civil Procedure Rules
The court's jurisdiction to strike out arises under CPR rule 3.4:
“(2) The court may strike out a statement of case if it appears to the court—
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or
(c) that there has been a failure to comply with a rule, practice direction or court order.”
CPR Practice Direction 3A relevantly provides:
“1.4 The following are examples of cases where the court may conclude that particulars of claim (whether contained in a claim form or filed separately) fall within rule 3.4(2)(a):
(1) those which set out no facts indicating what the claim is about, for example ‘Money owed £5,000’,
(2) those which are incoherent and make no sense,
(3) those which contain a coherent set of facts but those facts, even if true, do not disclose any legally recognisable claim against the defendant.
1.5 A claim may fall...
To continue reading
Request your trial
-
Rupert St John Webster v John Francis Penley
...of the court under these rules, I can take the following summary from a recent decision of my own, Bank of Scotland plc v Hoskins [2021] EWHC 3038 (Ch). This was also an application for an order striking out a (counter) claim or awarding reverse summary judgment. In that case I said this: ......
-
Bank of Scotland Plc v Peter Lisney Hoskins
...Paul Matthews HHJ Introduction 1 On 17 November 2021 I handed down my reserved judgment in this matter, under neutral citation [2021] EWHC 3038 (Ch), without attendance, and adjourned consideration of consequential matters to be dealt with on paper. On 19 November 2021 I received a Note fr......