Ventra Investments Ltd (in creditors' voluntary liquidation) v Bank of Scotland Plc

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr Salter
Judgment Date30 Jul 2019
Neutral Citation[2019] EWHC 2058 (Comm)
Docket NumberClaim No CL-2015-000559

[2019] EWHC 2058 (Comm)





Royal Courts of Justice. Rolls Building

Fetter Lane, London, EC4A 1NL


Mr Richard Salter QC

Sitting as a Deputy Judge of the High Court

Claim No CL-2015-000559

Ventra Investments Limited (in creditors' voluntary liquidation)
Bank of Scotland Plc

Mr Stephen Davies QC, Ms Anna Lintner and Mr Michael d'Arcy (instructed by Hausfeld & Co LLP) appeared for the Claimant

Ms Rosalind Phelps QC, Mr Rupert Allen and Mr Max Kasriel (instructed by DLA Piper (UK) LLP) appeared for the Defendant

Hearing dates: 3, 4, 12 July 2019

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.

Mr Salter QC:

(A) Introduction


The trial of this action is currently listed to begin on 15 January 2020, with a time estimate of 20 days. The primary issue before the court on these applications is whether, in the interests of justice and in accordance with the overriding objective, I should vacate that listing to allow time for the Defendant to give the further disclosure which the Claimant asks me to order, and for the Claimant both to incorporate the results of that further disclosure into its statements of case and into its evidence, both factual and expert, and otherwise to amend its Particulars of Claim to expand the scope of its claims against the Defendant.


The Claimant's case is that, for a variety of reasons, a fair trial in January 2020 is no longer possible. The Defendant resists the proposed adjournment of the trial, and argues that the impossibility of accommodating the amendments and further disclosure now sought by the Claimant in the six-month period between now and the trial date is a strong (though not the only) reason why I should refuse the Claimant's applications.

(B) Background


The Claimant (“VIL”) is a property development company, now in creditors' voluntary liquidation. Its business model was to buy residential properties, to renovate them, and then to let them out. The Defendant (“BOS”) was VIL's main banker. Over the period from 2004 to 2008, BOS made various loan facilities available to VIL. The terms of those facilities (on VIL's case) required VIL to buy interest rate hedging products from BOS. In consequence, on 23 June 2005 VIL and BOS entered into a Master Agreement on ISDA terms, and over the period from June 2005 to February 2008 entered into 3 interest rate derivative contracts (“the Original Trades”) under which VIL was the fixed-rate payer and BOS the floating-rate payer.


In the period between October 2008 and February 2009, VIL and BOS entered into a further 5 interest rate derivative contracts (“the Replacement Trades”), which restructured and replaced the Original Trades. Again, VIL was the fixed-rate payer and BOS the floating-rate payer. Both under the Original Trades and under the Replacement Trades, the floating rate payable by BOS was three-month GBP LIBOR.


BOS became part of the Lloyds banking group (“Lloyds”) in January 2009. In about May 2010, responsibility for VIL's accounts was transferred within the group to Lloyds' Business Support Unit (“BSU”). On 16 May 2011 BOS appointed Sarah Rayment and Shay Bannon (the “Receivers”) of BDO UK LLP (“BDO”) as Administrative Receivers of VIL.


BOS had entered into an Umbrella Management Agreement (the “UMA”) with Grainger RAMP Ltd (“Grainger”) on about 3 May 2011. According to Mr Greaves (in his trial witness statement dated 3 May 2019 on behalf of BOS), the purpose of the UMA was:

.. to protect and maximise the realised value of [Lloyds'] secured assets, upon the insolvency of a customer, through the appointment of [Grainger as] a well-established residential asset manager to actively manage and sell the customer's assets..

To that end, the terms of the UMA obliged Grainger (at BOS's request) to use its best endeavours to agree with BOS a “Portfolio Business Plan” for the management and sale of a specified BOS customer's charged assets, and thereafter to enter into a Portfolio Management Agreement (a “PMA”) incorporating that agreed Portfolio Business Plan with any administrator or fixed=charge receiver appointed by BOS in relation to that customer.


Accordingly, on 20 May 2011, Grainger entered into a PMA with the Receivers, under which Grainger undertook (inter alia) to provide a variety of services, including letting and sales management, in relation to the portfolio of properties owned by VIL which was charged to BOS. I shall return to the topic of the UMA and the PMA, and to the detailed terms of those agreements, later in this judgment. Under Grainger's management, the portfolio of approximately 89 properties owned by VIL was sold. This produced gross sale proceeds of just under £57m.


On 16 March 2015, VIL was placed into creditors' voluntary liquidation. On 24 July 2015, the present action was begun by the joint liquidators of VIL.


The claims currently made by VIL in this action fall into three distinct parts: (1) claims which I shall refer to in this judgment as the “Misrepresentation Claims”; (2) claims which I shall call the “Breach of Duty Claims”; and (3) claims which I shall call the “Undervalue Claims”. In broad summary, these three sets of claims are as follows:

9.1 The Misrepresentation Claims: VIL alleges that it was induced to enter into the Replacement Trades by 3 types of misrepresentation fraudulently made to it by or on behalf of BOS:

9.1.1 The “Value Representations”, to the effect that the Original Trades had a significant positive value to VIL, which it could only release by entering into the Replacement Trades;

9.1.2 The “Proposed Increase Representations”, to the effect that VIL would make it more likely that BOS would agree to increase VIL's term loan facilities by agreeing to enter into the Replacement Trades; and

9.1.3 The “LIBOR Representations” — implied representations about the integrity of the process for setting LIBOR, of the kind recently considered by the Court of Appeal in Property Alliance Group Ltd v Royal Bank of Scotland Plc [2018] EWCA Civ 355, [2018] 1 WLR 3529, and by Picken J in Marme Inversiones 2007 SL v Natwest Markets Plc [2019] EWHC 366 (Comm).

9.2 The Breach of Duty Claims: VIL alleges that BOS failed to provide sufficient information to VIL to allow it accurately to assess the risks involved in the Replacement Trades and (in particular) failed to explain to VIL the long-term effect of a potential fall in interest rates. VIL's case is that this failure constituted an actionable breach of duty on the part of BOS.

9.3 The Undervalue Claims: VIL alleges that its portfolio of properties was sold at an undervalue by Grainger on behalf of the Receivers. If properly marketed, VIL says that the portfolio should have produced gross proceeds of nearer £74m. VIL also alleges that Grainger and/or the Receivers levied management and selling fees which were excessive and unreasonable. VIL's case is that BOS is vicariously liable for the actions of the Receivers, on the basis that BOS “directed, interfered and/or so intermeddled with the conduct of the Receivers” as to make it liable in equity to VIL.


All of these claims are strenuously denied by BOS.

(C) The Procedural History


By way of further background, I must set out a little of the procedural history of this action. As I have already mentioned, the Claim Form was issued on 24 July 2015. VIL suggests that the Receivers were contractually precluded and/or were deterred by the economic realities of their relationship with BOS from taking any steps to sue BOS, and that VIL's Joint Liquidators in reality acted with commendable promptness in beginning these proceedings only four months after their appointment in March 2015. That meant, however, that the issue of the Claim Form was not preceded by the usual pre-action correspondence. It was therefore followed by an agreed stay to enable the parties to go through that process. Thereafter, VIL served its Particulars of Claim on 1 July 2016.


On 7 October 2016, BOS served its Defence. At the same time, it also served an application by which it sought (a) summary judgment in relation to certain parts of VIL's claims, on the basis that they were statute-barred; and (b) the striking out of certain other sections of the Particulars of Claim. BOS ultimately withdrew its application for summary judgment, but was successful in its strike-out application at a hearing on 26 January 2017 before Ms Sara Cockerill QC (now Cockerill J, but then sitting as a Deputy Judge of the High Court). VIL served its Amended Particulars of Claim (“the APoC”) on 30 August 2017. BOS served its Amended Defence on 29 September 2017, and VIL served its Reply on 3 November 2017.


The first Case Management Conference took place before Ms Sonia Tolaney QC (sitting as a Deputy Judge of the High Court) on 24 January 2018. Ms Tolaney gave directions intended to lead to a trial starting on 24 June 2019. These included directions that BOS should give what was defined as “Stage I LIBOR Disclosure” by 29 March 2018, and that both parties should give standard disclosure (except, in the case of BOS, in relation to the “LIBOR Issues”) by 8 June 2018. VIL was also required further to amend its Particulars of Claim, after consideration of BOS's LIBOR disclosure, by giving additional particulars of its allegations of fraud.


On 8 June 2018, the parties agreed to extend the date for standard disclosure to 27 July 2018, to permit a mediation to take place on 11 July 2018. On 16 July 2018, DLA Piper (UK) LLP (“DLA Piper”), the solicitors acting for BOS, confirmed to Hausfeld & Co LLP (“Hausfeld”), the solicitors acting for VIL, that BOS...

To continue reading

Request your trial
3 cases
  • John Hall (in his own right and as assignee of 1st Class Legal (IS) Ltd) v Saunders Law Ltd
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 27 February 2020
    ...plc [2016] UKSC 48, [2018] 2 All ER (Comm) 755 at [58], per Lord Toulson. 39 See eg Ventra Investments Ltd v Bank of Scotland Plc [2019] EWHC 2058 (Comm) at [22] to [25] and at [36] to 40 “Non-disclosure where there is a duty to disclose is tantamount to an implied representation that the......
  • Mehmet Arkin (as Fixed Charge Receiver of Lodge Farm) v Gary Ronald Marshall
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 11 May 2020
    ...will be deleted insofar as it cannot now be agreed. 1 The Appellant also referred to Ventra Investments Ltd v. Bank of Scotland Plc [2019] EWHC 2058 (Comm) at [36]–[40]. Both decisions must be read subject to the decision of the Chancellor in UTB LLC v. Sheffield United Ltd & Ors [201......
  • Manning & Napier Fund, Inc. (a company incorporated in the United States of America) v Tesco Plc
    • United Kingdom
    • Chancery Division
    • 31 July 2020
    ...must be treated as if it were an order for Extended Disclosure under PD51U (see Ventra Investments Ltd v Bank of Scotland plc [2019] EWHC 2058 (Comm)); (3) what was formerly an application for specific disclosure under CPR 31.12 is treated as an application under PD51U to vary or rectify a......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT