European Property Fund Plc v Ulster Bank Ireland Ltd

Factual and Procedural Background

The proceedings commenced on 19th June, 2014, when the Plaintiff and a co-plaintiff claimed various reliefs arising from two transactions referred to as the Belgrave Road Derivative and the Old Jewry Derivative. The pleadings included a statement of claim, a defence, and replies. The Defendant brought a motion to strike out the proceedings on grounds including statute barring, frivolity, and vexatiousness, pursuant to procedural rules and the court’s inherent jurisdiction. The motion was heard over two days in March 2015, with judgment delivered in July 2015.

The court struck out the entirety of the co-plaintiff’s claims and dismissed most of the Plaintiff’s claims, except those relating to the sale of the Belgrave Road and Old Jewry properties (alleged to have been procured by coercion and intimidation) and a claim for damages arising from delay in closing out the relevant facilities. The Plaintiff was granted liberty to amend its statement of claim.

The Plaintiff subsequently sought leave to amend its statement of claim extensively, proposing new causes of action based on alleged duties of fairness and good faith, mispricing of a loan facility (the EPF Facility), undisclosed contingent liabilities affecting creditworthiness, misrepresentations related to facility restructuring, wrongful enforcement of breaches, and alleged manipulation of Libor rates by the Defendant and its parent company. The Defendant opposed the amendments, arguing they were beyond the scope of the remaining issues, res judicata, and an abuse of process.

Legal Issues Presented

1. Whether the Plaintiff should be permitted to amend its statement of claim to include new causes of action after the striking out of most claims.
2. Whether the proposed amendments are barred by issue estoppel or the rule in Henderson v. Henderson as an abuse of process.
3. The applicability of procedural rules governing amendments, including Order 28, rule 1, and the balancing of prejudice and justice in permitting amendments.
4. The extent to which claims based on implied terms, duties, or representations beyond contractual terms may be advanced.
5. The admissibility and relevance of evidence relating to the Defendant’s parent company in the context of the proposed claims.

Arguments of the Parties

Plaintiff's Arguments

• The proposed amendments are necessary to determine the real questions in controversy.
• The new claims are not statute barred and could be brought in new proceedings if not allowed here.
• The Defendant has not demonstrated any prejudice from permitting the amendments.
• The Plaintiff was not unduly delayed in seeking leave to amend, having new evidence and advisors.
• The amendments clarify and contextualize the core claims, particularly the coercion and intimidation allegations.

Defendant's Arguments

• The amendments exceed the scope of issues remaining after the July 2015 judgment.
• Many claims are res judicata or attempts to circumvent the prior judgment.
• Allowing new claims after dismissal of most claims amounts to an abuse of process under Henderson v. Henderson.
• The proposed pleas based on implied duties or representations outside contractual terms are impermissible.
• Evidence relating to the parent company is irrelevant and inadmissible against the Defendant.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging the liberal approach to amendments under Order 28, rule 1, as established in Croke v. Waterford Crystal Ltd., which emphasizes that amendments should be allowed to ensure real questions in controversy are before the court, subject to prejudice considerations.

It considered the Defendant’s submission that the amendments were barred by issue estoppel and the rule in Henderson v. Henderson. The court found that while some claims related to matters already determined (such as those concerning the Belgrave Road Derivative and Old Jewry Derivative), others did not and thus were not barred by issue estoppel.

The court reiterated its prior judgment that the EPF Facility was a fixed interest demand loan governed by clear contractual terms, rejecting claims based on implied duties or representations inconsistent with those terms. It ruled that amendments seeking to revive such claims were impermissible.

The court distinguished permissible claims relating to coercion and intimidation in the sale of the properties, allowing amendments clarifying these claims within the parameters of prior rulings.

Regarding the proposed new claims, the court acknowledged the Plaintiff’s delay and lack of satisfactory explanation for failing to plead them earlier. However, since the proceedings were ongoing and discovery and trial preparation had not advanced significantly, the court exercised its discretion to allow certain amendments that raised new causes of action not previously pleaded, subject to exclusions.

The court rejected amendments based on alleged duties or conduct of the Defendant’s parent company, Royal Bank of Scotland, finding these irrelevant and inadmissible, and emphasized fundamental company law principles precluding attribution of parent company liability without proper pleading.

The court also addressed the clarity and coherence of the proposed amendments, refusing those that were vague, confusing, or failed to specify the contracts or terms relied upon.

Finally, the court considered the procedural context of the Commercial Court, stressing the importance of case management, expeditious resolution, and minimization of costs, which limited the latitude for late and expansive amendments.

Holding and Implications

The court’s final decision was to ALLOW IN PART AND REFUSE IN PART the Plaintiff’s application to amend its statement of claim.

The court permitted amendments that:

• Clarified and expanded claims relating to coercion, intimidation, and misrepresentation as they pertain to the sale of the Belgrave Road and Old Jewry properties.
• Included new misrepresentation claims not previously pleaded, provided they do not revive disallowed claims or implied duties inconsistent with contractual terms.
• Allowed claims related to alleged negligence or carelessness in Libor representations made directly to the Plaintiff, excluding generalized or parent company-related allegations.
• Permitted claims concerning wrongful delay in closing out the relevant facilities and associated costs.

The court refused amendments that:

• Sought to revive claims dismissed in prior judgments, including those based on the Belgrave Road Derivative or Old Jewry Derivative novation.
• Asserted implied contractual terms or duties beyond those expressly agreed.
• Relied on evidence or conduct of the Defendant’s parent company without proper pleading or relevance.
• Were vague, confusing, or failed to properly identify contractual arrangements and specific claims.
• Included prayers for relief inconsistent with pleaded causes of action, such as restitution claims not properly pleaded or fraudulent claims without proper basis.

The court directed the Plaintiff to prepare a further amended statement of claim consistent with these rulings within three weeks, to be furnished to the Defendant and the Court, to enable the proceedings to continue on a clear and manageable basis.

No new legal precedent was established; the decision primarily clarified the application of established procedural and substantive principles in the context of amendments to pleadings in commercial litigation.