Neutral Citation Number: [2018] EWHC 1657 (Ch)
Case No: HC-2017-000507
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Rolls Building, Fetter Lane,
London EC4A 1NL

Date: 05/07/2018

Before:

CHIEF MASTER MARSH
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Between:

	1. BRIAN DEANE
2. DANNY MURPHY
3. ROBERT SAVAGE
4. JASON WILCOX	

Claimants	
	
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	1.COUTTS & CO
2.THE ROYAL BANK OF SCOTLAND plc	
Defendants	

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David McIlroy and Darragh Connell (instructed by Elborne Mitchell LLP) for the Claimants
Adam Temple (instructed by TLT LLP) for the Defendants

Hearing dates: 20 and 21 March 2018
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Judgment Approved
CHIEF MASTER MARSH: 
1.	 The claimants are all former professional footballers. In 2004, they each invested in a commercial property development in Spain, called Monte Resina, by purchasing an apartment. The claimants’ financial adviser was a firm called Kingsbridge Asset Management Limited (“Kingsbridge”). David McKee and Kevin McMenamin were the individual advisers they dealt with. Both the first defendant (“Coutts”) and The Royal Bank of Scotland (Gibraltar) Limited (“RBS Gibraltar”) lent money to the claimants to assist them in the purchase of the apartments. RBS Gibraltar is not a party to this claim. 
2.	It is necessary to distinguish RBS Gibraltar, which lent money to the claimants and the second defendant (“RBS”). Coutts, RBS Gibraltar and RBS were, at the relevant time, direct or indirect subsidiaries of The Royal Bank of Scotland Group plc. RBS is joined as second defendant because RBS Gibraltar’s lending book was assigned to RBS (after various intermediate assignments). RBS is said to be liable “as successor in title to RBS Gibraltar”. It is common ground that RBS had no dealings with the claimants and where RBS is referred to in setting out the loan history, the reference can only be to RBS Gibraltar.
3.	The claimants’ case is summarised in paragraph 3 of the particulars of claim:
“In 2004, David McKee and Kevin McMenamin, acting within the scope of their apparent authority from Kingsbridge, induced the Claimants, two other professional footballers and one football manager, to purchase apartments at Monte Resina, Marbella, Spain (“Monte Resina”). The said inducement occurred because of the undue influence exercised by David McKee and Kevin McMenamin over the Claimants, and or because of breaches of trust and fiduciary duty by David McKee and Kevin McMenamin and or because of fraudulent misrepresentations by David McKee and Kevin McMenamin. Coutts and RBS are liable to the Claimants because Coutts or RBS were in a joint enterprise with David McKee and Kevin McMemamin in promoting Monte Resina to the Claimants, or because David McKee and Kevin McMenamin were acting as Coutts’ and or RBS’ agents for the purposes of arranging the loans to enable the Claimants to purchase the Monte Resina apartments, or because Coutts and RBS were on notice of David McKee and Kevin McMenamin’s undue influence and or breaches of trust and of [sic] fiduciary duty and or fraudulent misrepresentations.”
4.	The claim seeks to establish secondary liability against the defendants on three grounds:
(1)	Coutts and RBS Gibraltar were in a “joint enterprise” with Mr McKee and Mr McMenamin.
(2)	Mr McKee and Mr McMenamin acted as agent for Coutts and RBS Gibraltar.
(3)	Coutts and RBS Gibraltar were on notice of wrongful acts by Mr McKee and Mr McMenamin.
5.	The claim for equitable compensation and/or damages is set out under a number of headings for each claimant. The principal claims are for:
(1)	The proportion of the purchase price paid away by Mr McKee and Mr McMenamin.
(2)	The claimants’ loss on the sale of the apartment.
(3)	Interest paid on the Coutts loan.
(4)	Interest paid on the RBS Gibraltar loan.
(5)	The full amount borrowed from Coutts Finance Co.
(6)	Maintenance and service charges paid in respect of the apartment.
6.	This judgment follows the hearing of two applications. First in time was the defendants’ application to strike out the whole of the claim pursuant to CPR 3.4(2)(a) on the basis that no reasonable grounds for bringing the claim are made out in the particulars of claim and/or pursuant to CPR 24.2 on the grounds that the claim has no real prospect of success and there is no compelling reason why it should be tried. Secondly, the claimants applied for permission to amend the particulars of claim.
7.	The jurisprudence that lies behind the defendants’ application is well-understood. So far as strike out is concerned, the primary focus is on the statement of case, either as to the manner in which it is drafted or the propositions of law that underpin it (or both). The defendants have to show that the claim, as it is set out in the statement of case, is bound to fail. The court may give the respondent an opportunity to cure any defects and, as here, the making of an application to strike out the claim will sometimes prompt an application for permission to amend. The hearing proceeded on the basis that the court would determine both applications together.
8.	Guidance about the correct approach to applications under CPR 24.2 can be found in a number of sources. I have particularly in mind the helpful summary of the principles provided by Lewison J (as he then was) in Easyair Limited v Opal Telecom Limited [2009] EWHC 339 (Ch) (approved by the Court of Appeal in A C Ward & Son v Caitlin (Five) Limited [2009] EWCA (Civ) 1098). It is unnecessary to set out the principles in this judgment. I would only remark that the risk of conducting a mini-trial is all too apparent where, as here, the claimants have provided a substantial body of evidence in their witness statements. For the purposes of the application, the defendants accept the facts as they are pleaded. It is, however, the claimants’ case that, if the claim proceeds, disclosure by the defendants is likely to reveal information that is helpful to their case and they are critical of the defendants (i) for having  been slow to provide information and relevant documents and (ii) for having redacted documents supplied to the claimants to an unreasonable and unnecessary degree.
9.	The principal evidence supporting the applicant is provided in the careful and measured statement made by Andrew Lyon, a solicitor with TLT LLP, based on instructions and on a review of the documents. Each of the claimants has made a full statement in response. The fourth claimant, Mr Wilcox, has filed a particularly lengthy statement running to 150 paragraphs. Much of it deals with matters about which he has no knowledge (the claimants’ lack of knowledge about the dishonest activities of Mr McKee and Mr McMenamin is an important element of the claim) and it includes lengthy quotations from documents and comment. Such an approach to the drafting of witness statements is both inappropriate and unhelpful. The statement lacks focus on the issues for determination by the court on the defendants’ application and his commentary is largely tendentious and unnecessary. The volume of evidence the claimants have provided is clearly designed to emphasise the unknowns. The claimants’ approach compares unfavourably with that of the defendants which was carefully directed to the case put forward by the claimants in their particulars of claim.
10.	At the material time, Mr Ian Turland was a relationship manager with Coutts, having worked for Coutts since 1983. He has provided a witness statement principally to deal with allegations that are made against him in the draft amended particulars of claim (“the amended claim”). His statement focuses on the new allegation that is made in the draft amended claim that he dishonestly assisted Mr McKee and Mr McMenamin in their breach of fiduciary duty and/or breach of trust. The claimants say that Mr Turland’s statement fails to grapple with their case and is an example of the defendants’ refusal to provide a full response to their case.
Background
11.	The defendants retained their apartments until after the collapse in the Spanish property market in late 2009 and the apartments were ultimately sold in 2013 for substantially less than the purchase price. In April 2010, the claimants issued proceedings against Kingsbridge seeking damages for negligence, breach of contract and breach of fiduciary duty in respect of claims arising out of their investment in Monte Resina. On 14 September 2010, Kingsbridge went into liquidation and the claimants obtained judgment in default with damages to be assessed. In September 2011 they each obtained judgment for sums ranging between £814,416 and £1,050,698.
12.	They then pursued proceedings against Kingsbridge’s professional indemnity insurers, Aspen Insurance UK Limited (“Aspen”). In July 2012, Aspen filed a defence denying liability on the basis that the claims arose out of the dishonest, fraudulent or criminal acts or omissions of Kingsbridge, Mr McKee and Mr McMenamin. They are referred to collectively in the particulars of claim as “the Original Defendants” and I will use that description in the same way. For the purposes of this claim, the claimants adopt a lengthy extract from Aspen’s defence as the basis for their claim that the Original Defendants exercised undue influence, acted in breach of trust and fiduciary duty and made fraudulent misrepresentations. The application before me proceeded on the basis that the conduct complained of may be presumed to be true. The facts as summarised in this judgment are based upon that extract from the Aspen defence and supplemented by the documents to which reference was made at the hearing.
13.	Kingsbridge was an IFA specialising in the provision of investment services to sportspersons, including footballers. It was a subsidiary of Proactive Sports Group plc (“Proactive”). Mr McKee and Mr McMenamin, as well as acting as advisors for Kingsbridge, became interested in ventures outside their normal sphere of interest. They explained their wider interests in a letter written to their accountant on 7 April 2004:
“As you know we are becoming more involved in property ventures as individuals, general partners and as principals of Kingsbridge. There is a fine line between all the relationships and we clearly have duties to several parties. We are trying to keep the right side of everything but invariably come across conflicts of interest we have to be mindful of.”
14.	It is clear from this passage that they were aware of the duties they were under as IFAs and the evidence plainly shows that, even if the line between proper and improper conduct can be a fine one, they soon placed themselves well on the wrong side of it. The letter also refers to a condominium development called Charlotte Harbor in which the fourth claimant had become an investor in 2003 by purchasing two apartments. All the other claimants later invested in the Charlotte Harbor project. More importantly, the letter dated 7 April 2004 refers to the Monte Resina development in Spain. It is explained as being a block of ‘up market’ apartments with a retail value of €6.5 million that could be purchased by Mr McKee and Mr McMenamin for €5.25 million. Expenditure on the purchase was anticipated to be €200,000. There was a choice between buying the building or buying the development company named Costa Luna. In fact, neither of those options was pursued and, instead, the apartments were sold by Costa Luna to investors with a substantial commission being paid to, or on behalf of, Mr McKee and Mr McMenamin.
15.	Much reliance is placed by the claimants on the apartments being sold with the benefit of a 4 year rental guarantee. The rental guarantee is referred to in the same letter and it was clearly, from an early stage, intended to be a feature that would be attractive to purchasers.
16.	Kingsbridge and its holding company were aware of Mr McKee and Mr McMenamin’s intention to participate in the Monte Resina development. On 26 April 2004 Mr McKee wrote to Mr N. Rodford at Proactive “as requested” to explain the project to him. He candidly explains:
“There is an opportunity to purchase a development called Monte Resina from the builder at a discount to market valuation. The proposal is to sell the ten individual units to clients at fair market value with an independent valuation. There will be profit obtained which will be used in provide (sic) a rental guarantee for clients over a four year period.
The opportunity was offered to [Kingsbridge] and your preference is that we do not take the risk of providing guarantees and instead negotiate a high end commission.
I propose, with your agreement, to purchase the development, either with Kevin McMenamin or a related company. I will ensure that a commission at least as high as other property projects is paid to [Kingsbridge] for the introduction of clients. I will also ensure that Chris Bate clears the procedure and any declarations of potential conflict of interest.”
17.	Remarkably, a manuscript document showing the profitability of the transaction, with the development either being purchased and resold or sold in 10 units for a commission, has survived. Both calculations when dealing with the expenses of the project have an entry entitled “black” of €250,000 which is a reference to the cash payment to the developer of Costa Luna. The anticipated profit on taking the commission route was stated to be €689,950.
18.	A price list for the 10 apartments was produced which shows the total purchase for the apartments as being €6.3 million; with the purchase costs of 10%, the total purchase price came to (rounded) €7 million. The defendants say the price list was never shown to them. In any event, there are two important matters mentioned in the list. 
(1)	It is said that all the apartments “… come with an 85% interest only mortgage organised through Coutts …”. The claimants say that even by that stage, a “joint enterprise” had been entered into between the Original Defendants and Coutts which had the consequence that Coutts is liable for their wrongs. The claimants also place emphasis on the words “through Coutts” and suggest that it was intended to convey that Coutts would organise a mortgage but not necessarily be the lender. I do not think it is necessarily right to read the words used in that way. In ordinary usage a mortgage organised ‘through’ a lender is made by that lender although I accept that when a borrower makes an agreement in principle with bank to borrow money, the borrower may not be concerned about which subsidiary, or associated company, is the actual lender. 
(2)	Purchasers were offered a “rental option” and “non-rental option”. Under the former, the developer was to guarantee the rental income for four years which would cover the borrowing cost and other direct expenses. At the end of four years, any surplus income would be divided equally between the apartment owners. Clearly the guarantee was intended to reduce the risk of the rental market not performing well and the reference to surplus income suggests that the entire rental was to be retained by the developer for 4 years to fund the guarantee. The guarantee appears to have been funded at the outset by a retention from the purchase price.
19.	In fact, the guarantee was provided by a company named Ogreda S.L. (“Ogreda”) that was controlled by Mr McKee’s wife, as nominee for her husband, and Mr McMenamin. Ogreda was set up by a local lawyer named Oscar Eguren who was later instructed to act for the claimants. The claimants each signed a power of attorney giving Mr Eguren the capacity to deal with the purchase.
20.	The Original Defendants were in a strong position to sell the Monte Resina apartments to clients of Kingsbridge. They acted as their advisers and it is clear they owed fiduciary duties to them. It is remarkable that Kingsbridge’s compliance systems did not ensure that a ‘suitability’ letter was provided to the claimants. (The papers include a draft letter that was not sent). Furthermore, it is evident that the claimants relied heavily on their advisers. As professional footballers it is entirely understandable that they had not had an opportunity to gain business or investment experience.
21.	The Aspen defence asserts that the Original Defendants received the sum of €7,005,432.02 from the purchasers of the Monte Resina apartments, including the defendants, and this sum was held in trust for the purchasers. In fact, it seems more likely that the gross purchase price was paid to Costa Luna with €1,510,320 being remitted to Ogreda. Part of that payment is explicable by the rental guarantee that was funded by the deposit of circa €290,000 to be held by Ogreda and by payment of expenses relating to the purchase. However, it is said that €412,178.92 was paid to Kingsbridge and €436,418.26 was held in an account in Cyprus for the use of Mr McKee and Mr McMenamin. 
22.	It is common ground, for the purposes of this application, that the Original Defendants should be treated as having been in breach of their duty to disclose the complete picture concerning the development including that (i) Ogreda was an entity controlled by Mr McKee and Mr McMenamin and (ii) that they had benefitted personally from the transactions. The claimants adopt a number of implied representations from the Aspen defence namely that the price the purchasers were paying was a fair market price, the price did not include any sum payable to the Original Defendants and that the Original Defendants were not financially interested in the investment the claimants were intending to make. In addition, the claimants say there was an express representation that the developer was providing a guarantee of rental income and an implied representation by Mr McKee and Mr McMenamin that they had no reason to doubt that there was an enforceable guarantee in place. All such representations are said to be have been knowingly false.
23.	The claim follows on from the claimants’ unsuccessful attempts to recover damages for losses they sustained from the Original Defendants and from Aspen. They feel very strongly about the issues raised in the claim. Their claim is for equitable compensation or damages. They cannot apply for rescission of the purchases and/or the loans made by the defendants because the apartments were sold some years ago and the loans have been paid off. Notably, no claim is made for loss of rental income and the claimants had the benefit of ownership of the apartments for about nine years. Credit is given for a proportion of the settlement sum received in the Aspen litigation.
Joint enterprise
24.	The first basis on which the defendants are said to be liable is that there was a joint enterprise (otherwise described as a “common design”) between Mr McKee and Mr McMenamin on the one hand and Coutts on the other (with Coutts acting on behalf of itself and RBS Gibraltar). It is said to have had three elements: (1) that Mr McKee and Mr McMenamin would promote the Monte Resina development to Kingsbridge’s clients; (2) that Coutts had agreed to “arrange” 85% interest only loans for the purchase of apartments; (3) Coutts’ expectation was that it would become the preferred banking partner recommended by Kingsbridge to its clients.
25.	The arrangement (to use a neutral term) is said to be evidenced by:
(1)	The development being promoted with a price list that included the statement about the properties coming with an 85% interest only mortgage organised through Coutts.
(2)	Kingsbridge having submitted Coutts/Kingsbridge Spanish Property Loan Referral Sheets (“Loan Referral Sheets”) on behalf of each the claimants. It was a bespoke form designed by Coutts for information to be given to Coutts about (1) the borrower’s personal and financial circumstances and (2) the apartment to be purchased. The form was designed for signature by Kingsbridge (not the applicant for the loan) with a certificate by Kingsbridge that the information was accurate.
(3)	The Loan Referral Sheets having an entry in the form: 
“LEVEL OF RENTAL GUARANTEE – RECORD WHEN PAID.”
 Against it Kingsbridge noted, in each case, that there was a 4 year guarantee that included the cost of the mortgage, the cost of insurance and the cost of maintenance. The way the form was designed by Coutts anticipates that there would be a rental guarantee.
(4)	That any bank acting in accordance with normal banking practice would have requested a copy of the guarantee, have discovered there was no written guarantee and that Ogreda was connected with Mr McKee and Mr McMenamin and was not a good covenant; or, alternatively, that if this enquiry had not been made, this provides evidence that the arrangement was not at arms-length and was part of a common design.
(5)	Pursuant to the common design, Coutts granted each of the claimants an unsecured mortgage of 10% of the purchase price and Coutts procured that RBS Gibraltar would grant each of the claimants a secured loan for 75% of the purchase price.
26.	The claimants say that the lending arrangement was put together as a package by Coutts so that Kingsbridge could offer it to its clients. Under the arrangement neither Coutts nor RBS Gibraltar had any dealings with the claimants and all the information needed by the lenders was supplied by Kingsbridge.
Agency
27.	The claimants say that the Original Defendants acted as agents for both Coutts and RBS Gibraltar, and Coutts acted as agent for RBS Gibraltar. The agency is described in two ways. First, it is agency in the narrow sense of the Original Defendants acting as agents for the banks with the banks as principals and, secondly, in the broader sense “… of being in such a relationship with the banks that the banks were fixed with notice of any wrongdoing by the original Defendants and such that deliberate concealment by the original Defendants may be relied on against the banks under section 32(1) Limitation Act 1980.”
28.	The core pleading in relation to agency is set out in paragraph 22 of the particulars of claim:
“By reason of the relationship of agency in either the narrow or the broader sense, Coutts and RBS [Gibraltar] are fixed with notice of or otherwise liable for the undue influence and or breaches of trust and of fiduciary duty or fraudulent misrepresentations committed by the original Defendants.”
29.	The limited scope of the agency is clarified in the reply at paragraph 48. It is said that Mr McKee and Mr McMenamin acted as agents for the banks “for the purpose of arranging the loans to enable the Claimants to purchase the Monte Resina apartments.” And at paragraph 49 of the reply it is said that the banks (with Coutts acting as agent for RBS Gibraltar) and the Original Defendants “… entered into an arrangement pursuant to which Coutts and RBS Gibraltar would benefit from the loans which the Claimants entered into with them and [the Original Defendants] would benefit from commission and or profit which they would earn from arranging the loans.”
Notice
30.	The claimants’ case on notice needs to be set out in full:
“32.	As is evidenced by the Credit Submissions, Coutts and RBS were on notice that (i) [McKee and McMenamin] owned property in Southern Spain, (ii) [McKee and McMenamin] may have a personal interest in the Monte Resina development, (iii) Kingsbridge were receiving a commission for promoting the Monte Resina development.
33.	Any bank acting in accordance with normal banking practice would have clarified the nature of [McKee and McMenamin’s] interest in the Monte Resina development and would not have proceeded to lend to the Claimants unless it was satisfied that the Claimants had been given full disclosure of that interest and had received independent legal advice following such disclosure
34.	As is evidenced by the Credit Submissions and the Loan Referral Sheets, Coutts and RBS were on notice that a guarantee had been given in respect of the mortgage payments. The Claimants repeat paragraph 13 above. 
35.	By reason of the matters aforesaid, Coutts and RBS were on notice that [McKee and McMenamin] were exercising undue influence, and or in breach of fiduciary duty and or had made fraudulent misrepresentations, unless [McKee and McMenamin] had disclosed to the Claimants their interest in the Monte Resina development and unless the Claimants had received independent legal advice from a solicitor appraised of [McKee and McMenamin’s] interest in the Monte Resina development.”
31.	At paragraph 57 of the reply the claimants say:
“… The consequences of the defendants being on notice of the equitable wrongs of [the Original Defendants] is that the transactions resulting from those equitable wrongs are avoidable as against the Defendants and or the Claimants are entitled to equitable compensation against the Defendants.”
32.	The nefarious activities of the Original Defendants can be taken as read for the purposes of this judgment as can the dishonest representations, breach of fiduciary and/or trust and that undue influence was exercised. It is clear, however, that the claimants are seeking to establish secondary liability by a number of means which are not conventional. 
33.	At this stage, before looking at the facts in a little more detail, three observations are apposite:
(1) The claimants’ case on causation in the claim against the Original Defendants is not clear, particularly in relation to the fraudulent misrepresentations. The misrepresentations are not enough on their own. The claimants must have been influenced in some way by them, although they do not need to show that the misrepresentations, or one of them, was the only cause of them entering into the transactions. The claim is silent on this subject. The claimants each owned their respective apartments long beyond the expiry of the rental guarantee and the case is pleaded to the effect that were influenced the misrepresentations. (Mr Murphy is the only claimant who says in this statement that had he known of the covert profit made by the original Defendants he would not have purchased his apartment). In reality, they appear to have enjoyed the benefits of the purchase for a number of years. 
(2) The claimants make much of the difficulties they have faced in obtaining information about the purchases and the loans. Documents have been provided by the banks with varying degrees of redaction. It is entirely understandable that the banks should redact documents so as to exclude references to other customers and their personal data, but redactions beyond that are unlikely to be justifiable. Furthermore, the lawyer appointed by McKee and McMenamin to act for the claimants, Mr Eguren has refused to provide the claimants with documents from his files. Coutts is criticised for providing only very limited evidence from Mr Turland in reply to their evidence. If the test under CPR Part 24.2 has to be applied, consideration has to be given to whether there is a real likelihood of the claimants being able to put forward the current case with greater conviction once disclosure has taken place. 
(3) The claimants have relied in their particulars of claim on two occasions on what is said to be “normal banking practice” but they have not produced any evidence to support those assertions. It is difficult to think that such a case could properly have been pleaded without at least initial expert evidence having been relied on.
	The Purchases and Loans
34.	Two points emerge clearly from the evidence: 
(1) There was, at least at a general level, an arrangement made between Coutts and the Original Defendants that was intended to be for their mutual benefit. There was a scheme concerning the Monte Resina development that enabled the Original Defendants to put forward their clients as prospective borrowers to enable them to purchase apartments. 
(2) Secondly, and relatedly, Mr Turland and Coutts were very keen to promote a relationship with Kingsbridge because Kingsbridge’s clients were seen as a good source of banking business. There had already been dealings over, for example, marketed tax mitigation schemes. An eagerness to do business, however, is nowhere near adequate on its own to found secondary liability.
35.	The draft suitability letter provides information that was not revealed to the claimants. It is unnecessary to refer to it in detail. Even if it had been sent, the failure to provide a candid picture about the involvement of the Original Defendants would have been material. It was intended, however, to explain the rental guarantee and to make clear it would operate by the deposit of rent received over a four year period with the “rental company” (not the developer) and that the rental company did not have an operating history. The terms of the letter support the view that the arrangement was not a guarantee in a conventional sense. Instead it involved the entire rent over the four year term being held by the rental company and used to pay all expenditure incurred in relation to the property including the mortgage interest. At the end of the four year term any surplus was to be returned to the property owner. This arrangement carried the risk that the rental company might become insolvent. The guarantee was of value if the rental market collapsed and the rent received was less than the outgoings. Otherwise it was the investor’s money being held to secure payment of the outgoings.
36.	I remark, in passing, that the purchase of a Spanish property seems a less than obvious investment as part of a balanced portfolio. There is no indication in the draft suitability letter of the likely return on the capital sum or the expectation of capital growth. The claimants were not given any valuation advice about current value of the apartment, the prospect for capital growth or the likely rent that could be achieved.
37.	 Two further points arise from the draft suitability letter:
(1)	It states that an “Agreement in Principle has been agreed reached (sic) with the Royal Bank of Scotland (RBS) and Coutts to provide the mortgages …”. It also states that it is “anticipated” the mortgages will be for five years and subject to review at the end of that period. In fact, they were 12 month loans.
(2)	It is said that: “RBS and Coutts will be responsible for providing individual advice appropriate to your personal and financial circumstances on the mortgage/loan finance.” It would be most unusual for such advice to be offered by a bank.
38.	The Credit Submissions run to four pages. They are a document internal to Coutts and were not supplied to the Original Defendants, or the claimants, in 2004. They are not uniform for each claimant but, save for differences between the summary of income and assets, they are very similar. They were prepared by Mr Turland as Client Relationship Manager in private banking and CS Laird a Client Group Credit Sales Manager and they show their strong desire to promote business with the Proactive Sports Group. There is said to be a “new business relationship” with Proactive and that Coutts had been “seeking a closer working relationship with them”. However, the submission also says that Coutts had been working closely with both Proactive and Kingsbridge since 2000 and, amongst other lending, Coutts had provided £40 million of film sale and leaseback (Ingenious Media Inside Track) facilities.
39.	The claimants particularly rely on the following aspects of the submission:
(1)	It describes the lending approach as being “packaged” to make it attractive and the packaging had enabled Coutts “to win the opportunity for doing deals from the opposition”.
(2)	It states that “senior management at Proactive and Kingsbridge either own property in Southern Spain or know others who do”.  This does not strike me as being of great importance because it would be likely to apply to a significant proportion of people in business.
(3)	“[Monte Resina] is to be managed locally and interviews are being undertaken as at June 2004. As part of the proposition to their clients Proactive/Kingsbridge are looking to open separate clients accounts with Coutts which will be pre-funded from part of the upfront rent due by tenants such that the servicing of the debt, maintenance and insurance costs will be met so the individual investors do not have to contribute more funds on an ongoing basis.” This appears to be an oblique reference to an arrangement similar to the rent guarantee. It is not otherwise directly mentioned.
(4)	“… there is already a significant amount of trust placed in Kingsbridge by our borrower.”
40.	The defendants emphasise that it is in the nature of a submission to a bank’s Credit Risk department that a careful review is undertaken. The Credit Risk department is at one remove from the pressures created by having to sell the bank’s products. Interestingly, however, the submission comments that the proposal is “arguably a speculative investment” and concludes by saying:
“By lending we are obviously associated with the underlying deal but without the necessary experience to meaningfully provide comment. We are therefore taking the view that we should divorce ourselves from the efficacy of the underlying investment and make it clear that we are lending having made an assessment on the means position as described.”
41.	 Although Mr Turland and Mr Laird were clearly keen for the lending proposition to be approved, the submission strikes me as both thorough and careful. I am unable to discern in the documents any evidence of Coutts having already agreed to lend, beyond an ‘in principle agreement’ subject to approval by Credit Risk. And this is borne out by the decision of Credit Risk to decline to lend the full amount required on an unsecured basis. Ultimately, Coutts was only willing lend 10% of the purchase price unsecured with the remainder being lent on a secured basis by RBS Gibraltar. 
42.	After Coutts refused to make an 85% loan unsecured, RBS Gibraltar became involved through the introduction made by Coutts. It is a vital part of the claimants’ case that RBS Gibraltar was in a joint enterprise with the Original Defendants and was their agent and/or on notice of Mr McKee and Mr McMenamin’s wrongdoing. It is therefore necessary to consider some of the documents relating to dealings between Coutts and RBS Gibraltar, and between RBS Gibraltar and its offshore credit function in the Isle of Man. RBS Gibraltar had no direct dealings with the claimants; there were, however, indirect dealings with their lawyer and attorney Mr Eguren who had been nominated by the Original Defendants. 
43.	Coutts’ decision not to lend on the basis Mr Turland had put forward to Credit Risk led him to approach RBS Gibraltar on 23 June 2004. His email to Paul Gonzalez appears to follow a telephone conversation and is marked “urgent”. RBS Gibraltar was asked to consider lending to seven investors (the claimants and three others) all of whom had been introduced by Kingsbridge. The basis of the proposal remained unsecured lending; the loans were described as being ‘buy to let’. The lending proposition is put forward as a package and Mr Turland, before concluding his email with a passage in capitals stressing the urgency, says:
“I appreciate that aspects of these proposed deals fall outside of your normal criteria. Can you speak to your Credit Department to ascertain if they are happy in principle with loans at this level, LTV, purpose. We are looking for a firm commitment from your Credit function – obviously subject to valuations and information verifications etc. We do not wish to submit individual applications at this stage as we appreciate that the LTVs and the purposes of the loans are outside of the standard criteria and we would prefer Credit to take an overview.”
44.	A series of exchanges took place between Mr Gonzalez in Gibraltar and Trevor Callister, the Mortgage Sanctioning Manager, Offshore Credit in the Isle of Man. Mr Callister’s first response, sent to Mr Gonzalez on 23 June 2005 within minutes of hearing about the proposal, was to ask Mr Gonzalez to consider four points when he took the application further. They bear quoting in full:
“1. Buy to lets on interest only? – generally only consider int only on an exceptional basis for standard Real mortgages. 
2. The 75% LTV ratio – We would certainly not be enamoured with 100% interest only commercial facilities.
3. Concentration risk ie same block of apartments in this case.
4. Tenancy agreements – you advised that Spanish law would not be acceptable from a Bank point of view for tenancy agreements in excess of 6 months. This could be a deal breaker in itself.”
45.	The emails only give part of the story and it is evident that there was a good deal of pressure from Mr Turland to persuade RBS Gibraltar to agree to make the loans. The importance of the relationship with Proactive/Kingsbridge is emphasised by him. In an email sent to Mr Gonzalez on 29 June 2005 Mr Turland provides “Background Comments” which include:
“Since 2000 Coutts have been working very closely with Kingsbridge and Proactive both as separate entities and now in their integrated structure.
They have both used Coutts to provide primarily banking and credit lines for their clients including £40 million of Film Sale and Leaseback Ingenious Media Inside Track facilities.
Given Proactive’s pre-eminence in football, Coutts have been seeking a closer working relationship with them with the aim of being their preferred banking partner for their sports clients. This would complement Proactive’s “Best of Breed” approach insofar as they use accountants KPMG and solicitors Couchman Harrington. Such a move would see Coutts introduced to the majority of Proactive clients (c270) with all their banking credit and importantly mortgage business. There is also the possibility of an investment partnership as Proactive move towards more of a fee-based arrangement with their clients leaving their advisers able to recommend Coutts investment products under a ‘fund of fund’ approach. As part of this move, Proactive have approached us to assist with a selection of their clients relating to the Monte Resina development in Marbella Spain.”
46.	Mr Turland continued to press RBS Gibraltar to come to a decision. He said at 3.39pm on 29 June 2005 that:
“The only reason we are using RBSI [RBS Gibraltar] is that you can do secured.” [my emphasis]
Later that day, Mr Gonzalez suggested he should hold fire for the moment while he considered to what level of concentration of risk the credit department would accept. The issue of concern was the amount of lending relating to one asset. The emails passing between Mr Gonzalez and Mr Callister that day show there was little appetite for the lending in the credit department.
47.	On 30 June 2004 at 9.04 Mr Turland told Mr Gonzalez that it looked as if Coutts would agree to lend on four of the loans against UK security leaving RBS Gibraltar to provide loans secured against Spanish property. Shortly afterwards, Mr Gonzalez reported to Mr Turland that the head of “Real Mortgage” (RBS Gibraltar lending) was dealing with the credit department in the Isle of Man and, subsequently, a meeting took place to consider the lending proposition. Mr Gonzalez described the meeting as taking place “at the highest level”. Terms were agreed by 2 July 2004 as confirmed in an email from Jim Paton in the Isle of Man to Mr Gonzalez in Gibraltar. He remarks that he would expect RBS Gibraltar would share the fee with Coutts.
48.	The terms agreed on 2 July 2004 were an agreement in principle, subject to individual approval. Credit applications had to be submitted for each of the borrowers to the credit department in the Isle of Man for sanction in writing. The sanction for the fourth claimant, Mr Wilcox, for example includes a list of conditions such as receipt of a valuation “to confirm value and suitability for mortgage purposes and commenting on achievable rental income & likely demand” and approval of the letting agreement by the bank’s lawyer. Interestingly, it was also a condition that “the client/introducer” was to confirm that adequate legal advice with regards to Spanish property law/rental agreements has been sought. This confirmation was provided by Kingsbridge. 
49.	However, the submission of credit applications in at least one case followed after the sanction approving the loan, although it was a condition of the sanction that a signed credit application be submitted.
50.	On 14 July 2004 Coutts issued “Advice of Borrowing Terms” to the claimants. Each advice deals solely with the unsecured loan by Coutts and no mention is made of the proposed lending by RBS Gibraltar. The loans were subject to review after 12 months. Each is signed by Mr Turland on behalf of Coutts and later counter-signed by the claimants.
51.	The RBS Gibraltar loans moved forward through a credit application process and sanction albeit that the sanction mainly came before the applications had been signed. Taking the third claimant, Mr Savage, as an example, the sanction came on 16 July 2004 and was subject, amongst other, matters to receipt of a signed application form. The credit application is dated 19 July 2004. However, the internal processes surrounding the applications and sanction are not clear because only limited disclosure has been given at this stage.
52.	At some point, each of the claimants executed a power of attorney appointing Mr Eguren as their attorney in relation to the purchase.
53.	Each of the apartments was the subject of a valuation report by a valuer from a firm called Valtasar based in Madrid. Although the valuer visited Monte Resina, the claimants say RBS Gibraltar was only going through the motions and the reports are of little value. It is certainly right that no advice was given about the level of rent that could be achieved and the state of the market. These are surprising omissions in relation to a buy to let loan market albeit that the claimants say they were expecting a guarantee to secure the rent. 
54.	The claimants say that the arrangements agreed by RBS Gibraltar were part of an arrangement to support the joint enterprise with the Original Defendants and they rely on the pressure placed on RBS Gibraltar by Coutts and the manner in which the lending was implemented. The application to RBS Gibraltar for the individual loans was not made by the claimants and the agreement to lend as approved by the credit department in the Isle of Man came before the formal application which was signed by Mr Eguren as attorney.
55. 	The precise manner in which the RBS Gibraltar lending came about, if looked at in isolation, is clearly a matter that would warrant further investigation. Mr Turland does not deal with it in any detail in his statement and it would, in any event, be wrong for the court to draw any conclusions based upon the limited information that is available. That said, the basis of the arrangement between Coutts and the Original Defendants relied upon by the claimants is that there was to be interest only lending by Coutts for 85% of the purchase price whereas the lending that materialised was 10% unsecured lending by Coutts plus secured lending by a different entity of 75% of the purchase price. The claimants rely on the terms of a joint enterprise that were never implemented, unless Coutts and RBS Gibraltar are taken as one. They are, on the other hand, right that an attempt was made to package the lending and the revised lending was similarly packaged.
	The draft amended claim
56.	The claimants propose a radical amendment to the particulars of claim. Paragraph 3, which is set out in full at the outset of this judgment, is to be amended in two ways. First, to make clear that the references to RBS are to RBS Gibraltar. Secondly, and more importantly, by adding an averment that the claimants were induced to purchase the apartments “… because Ian Turland of Coutts dishonestly assisted David McKee and Kevin McMenamin in their breach of trust of fiduciary duty and or in breach of trust.” [sic]
57.	The breach of trust claim in its unamended form is based upon the premise that the Original Defendants owed fiduciary duties by virtue of their role as the claimant’s financial advisers and their receipt of the monies paid by the claimant for their apartments (circa €7 million). It is said they were in breach of trust either in failing to return to the claimants the difference between the sums paid and the sums Costa Luna would have been willing to accept namely €1,772,612, or in paying away €1,510,320 to Ogreda for their benefit. The trust claim is bolstered by a new paragraph:
“27A.	Monies which the original Defendants received into their hands or which were received by others on behalf of the original Defendants, such as any sums received by Ogreda S.L., by Oscar Eguren or by Marrache & Co. which the said recipients had received for the benefit of the original Defendants, were subject to a trust in favour of the Claimants insofar as the original Defendants did not have any or any proper authorisation to receive those sums.”
58.	The additional claim is a curious one because it is not said that any of the parties named lacked authority to receive the monies. Mr Eguren acted as the claimants’ attorney, having been appointed by the claimants, for the purposes of the transaction and Marrache & Co acted for the seller. They complain about Mr Eguren but accept that he was lawfully appointed by them as their attorney.
59.	The dishonest assistance claim is set out in paragraphs 31A and 31B. Paragraph 31A asserts that Mr Turland knew or was reckless about whether Mr McKee and Mr McMenamin were acting in breach of their fiduciary duties and/or in breach of trust. Paragraph 31B sets out at length the basis upon which Mr Turland’s knowledge or recklessness can be inferred from the following points (set out in summary form):
(1) The Claimants’ vulnerability to undue influence by David McKee and Kevin McMenamin.
(2) The transaction was one which called for explanation and/or justification.
(3) The fee-sharing arrangement between Coutts and Kingsbridge.
(4) The commission Coutts knew Kingsbridge would be receiving for recommending the investment.
(5) The nature of the investment.
(6) The rental guarantee.
(7) McKee and McMenamin’s personal interest in the Monte Resina development.
(8) Deliberately false or reckless assertions in the Credit Submissions.
(9) Other deliberate or reckless acts.
(10) Deliberate or reckless failure to ensure that the Claimants received independent legal advice.
60.	Paragraph 31C asserts that “in the premises”, Mr Turland dishonestly assisted Mr McKee and Mr McMenamin in their breaches of fiduciary duty and/or breaches of trust. 
61.	There are four elements to a dishonest assistance claim: (1) the existence of a trust (or fiduciary duties); (2) breaches of trust or duty; (3) assistance by the defendant; and (4) dishonesty: see Lewin on Trusts 19th Ed 40-25 to 40-35. The amended claim deals with (1), (2) and (4) but not (3). Lewin describes the requirement for assistance in the following way:
“… what is required is conduct which in fact assists the commission of the act which is a breach of trust by the trustee, and this requirement does not have any mental element in addition to the requirement of dishonesty. The assistance must be of more than minimal importance, and must enable the breach of trust to be committed, but there is no requirement that what is done by the defendant inevitably has the consequence that a loss is suffered.”
62.	Paragraph 32 of the particulars of claim provides the bedrock for the claim based on notice of wrongful acts. In its original form, the claimants relied upon the defendants being on notice of three matters. First, that Mr McKee and Mr McMenamin owned property in Southern Spain, secondly that they may have a personal interest in the Monte Resina development and thirdly that Kingsbridge was receiving a commission for promoting the development. These elements are deleted in the draft amendment. Instead, the claimants wish to assert that the defendants were on notice of the matters set out at paragraph 31B.
63.	Despite the focus of the amendment being upon Mr Turland, it is not the claimants’ intention to apply for permission to add him as a defendant. There is no allegation that Coutts is liable vicariously for his knowing assistance. The claim in knowing assistance is pleaded solely for the purposes of supporting the knowledge claim. 
64.	 Finally, the amendments put forward a positive case of fraud for the purposes of section 32(1) of the Limitation Act 1980 and concealment within the meaning of section 32(1)(b) and section 32(2). It goes on:
“39B. 	In the alternative, Coutts and RBS Gibraltar deliberately concealed their notice of the original defendants’ interest in the investment which fact was a fact which Coutts and RBS Gibraltar would have disclosed in the normal course of the banking relationship with the claimant, including when advising or requiring the claimant to obtain independent legal advice in respect of the investment.
39C. 		In deliberately concealing the matters pleaded at paragraphs 39 to 39B above, Coutts and RBS Gibraltar were acting as RBS’s agents in the broad sense for the purposes of section 32 (1) Limitation Act 1980.”	

 	Mr Turland’s witness statement
65.	Leaving aside the general observations Mr Turland makes, including his disquiet about being accused of dishonesty, the following points can be taken from his evidence:
(1) Kingsbridge was the trusted financial advisor for each of the claimants.
(2) Coutts did not provide any advice to the claimants about the transactions.
(3) He was not involved with the meeting on 30 June 2004 which led to the RBS Gibraltar lending being approved in principle. 
(4) He had no credit sanctioning role.
(5) Coutts wished to become the preferred banking partner for Kingsbridge’s clients.
(6) Kingsbridge shared a percentage of the lending fee charged by Coutts giving rise to payments to Kingsbridge of sums between about £52 and £117.50 per loan.
(7) A commission of €4,530 was paid by RBS Gibraltar to Coutts for introducing the claimants.
(8) He did not receive any commission based on the Monte Resina lending. His overall lending book in 2005 was about £60 million and so the Monte Resina lending formed a very small part of it.
(9) He had no knowledge of the wrongs committed by the Original Defendants.
66.	It need hardly be said that the claimants do not accept Mr Turland’s evidence and would wish to challenge it.
	The Defendants’ submissions
67.	For the purposes of the application, the defendants accept the facts as I have summarised them. They do not accept, however, certain inferences the claimants seek to draw from them which I will come to. The defendants’ application is principally made on the basis that, as the claim is put forward, it cannot succeed as a matter of law. It is therefore primarily put on the basis of a strike out under CPR 3.4(2)(a). It is necessary first to examine what the defendants say in relation to each cause of action and then to consider the claimants’ response, both on the facts and on the law.
	Joint enterprise
68.	The claimants rely on the references to joint enterprise in Investment Compensation Scheme v West Bromwich Building Society [1999] Lloyd’s LR 496 (“ICS v West Bromwich”). This is the less well-known part of the case that followed on from the decision of the House of Lords in which Lord Hoffman redefined the modern approach to the construction of contracts. At first instance Evans-Lombe J dealt with the trial of specimen claims against West Bromwich arising from the sale by an IFA, Fisher Prew-Smith Ltd (“FPS”), of equity release mortgages (“ERMs”). The decision appears to have inspired the way in which the claimants put their case in this claim and warrants a brief analysis.
69.	The causes of action pursued against West Bromwich (so far as material) were based on:
(1) a duty of care at common law; [there is no comparable claim in this case]
(2) liability for FPS’ defaults by FPS acting as its agent;
(3) liability as a joint tortfeasor with FPS;
(4) having received notice of FPS’ misrepresentations and undue influence.
70.	In the course of his judgment, Evans Lombe J refers on several occasions to joint enterprise. When considering the case based in agency at p.527 he said:
“In my judgement it is clear that from about January 1989 [West Bromwich] and FPS embarked on a joint enterprise to market to the public the ERMs of [West Bromwich] through the medium of FPS’s Home Income Plans.”
71.	Later, he rejected the claimants’ case that a relationship of principal and agent between West Bromwich and FPS came into being and went on to say:
“I can find no evidence from which it is proper to conclude that, notwithstanding the existence of a joint enterprise between them, WBBS consented to be bound by the actions of FPS in the course of furthering that enterprise.”
72.	It is clear from this summary that the judge was not suggesting the existence of a joint enterprise was sufficient, of itself, to give rise to a legal cause of action. Furthermore, even though there was a joint enterprise, in the general sense, because West Bromwich and FPS had a joint interest in the success of FPS’s home income plans, a relationship of agency between them did not necessarily arise. The judge held that the evidence showed cooperation and pre-planning between West Bromwich and FPS during the period preceding the launch of FPS’s advertising company campaign in the spring of 1989 but there was no agency relationship. ‘Joint enterprise’ is not a synonym for agency.
73.	In these proceedings, unlike in ICS v West Bromwich, there is no claim that the defendants owed the claimants a duty of care. However, part of the claim is based upon the Original Defendants having made fraudulent misrepresentations. Thus, there is a claim in tort upon which they rely and it is necessary to consider briefly joint tortfeasorship, albeit that this is not the way the claimant’s case is put.
74.	The subject has recently been reviewed by the Supreme Court in Fish & Fish Ltd v Shepherd UK and others [2015] AC 1229. Lord Neuberger summarised the law in the following way:
“54.	The claimant contends that it has suffered damage as a result of a tort committed by one person, “the primary tortfeasor”, and that another party, “the defendant”, who did not directly join with the primary tortfeasor in actually committing the tort, and was not the primary tortfeasor’s agent or employee, is also liable for the tort, because he assisted the primary tortfeasor to commit the tort.
55.	It seems to me that, in order for the defendant to be liable to the claimant in such circumstances, three conditions must be satisfied. First, the defendant must have assisted the commission of an act by the primary tortfeasor; secondly, the assistance must have been pursuant to a common design on the part of the defendant and the primary tortfeasor that the act be committed; and, thirdly, the act must constitute a tort as against the claimant.”
75.	It is not part of the claimants’ case that the defendants assisted in the making of the fraudulent misrepresentations that are relied upon. And it cannot be said that the joint enterprise that is pleaded can be seen as a common design for the purposes of joint tortfeasorship.
	Agency
76.	The claimants’ case is that the Original Defendants were acting as the defendants’ agent for the arrangement of the loans and that Coutts’ knowledge and notice of relevant matters is to be treated as that of RBS Gibraltar, because Coutts acted as agent for RBS Gibraltar. The scope of the agency relied upon by the claimants is narrow. It concerns Mr McKee and Mr McMenamin acting as agent for the banks for purpose of arranging the loans. The facts do not obviously lend themselves to an agency arrangement under which the Original Defendants could have had, or in fact had, any authority as agent. The facts relied upon by the claimants show dealings between the Original Defendants and the banks but they more obviously evidence the Original Defendants acting as agent for the claimants, rather than agent for the banks. Indeed, it is not in doubt that the Original Defendants were agents for the claimants. There is, however, no reason in law why there might not have been a double agency.
77.	The defendants point to the core requirements for agency as they are summarised in Chapter 1, Article 1 of Bowstead & Reynolds on Agency 20th ed:
“(1) Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act also acts pursuant to the manifestation. The one on whose behalf the act or acts are to be done is called the principal. The one who is to act is called the agent. Any person other than the principal and the agent may be referred to as third-party.
(2)	In respect of the acts to which the principal so assents, the agent is said to have authority to act; and this authority constitutes a power to affect the principal’s legal relations with third parties.” [my emphasis]
78.	The defendants submit that there is nothing in the way the case is pleaded, or in the evidence, that supports an authority given to the Original Defendants in wider terms than permission to inform the claimants of the banks’ willingness to lend. It is not, for example, part of the claimants’ case that the Original Defendants were given a wider authority as agent to search for customers for the bank in return for commission. In any event, it is said that the Original Defendants were not given any authority which permitted them to affect the banks’ relations with third parties. For these purposes the claimants are the third parties. The defendants say that absent the core requirement I have emphasised in the passage in Bowstead & Reynolds, an agency relationship cannot have come into being and it is inconceivable the claimants will be able to establish that Coutts gave Mr McKee and Mr McMenamin such authority.
79.	The secondary approach taken by the defendants is to submit that even if the Original Defendants had the relevant authority there is no basis in law for saying that it is sufficient to render the defendants liable for the wrongdoing. The position was recently analysed by the Court of Appeal in Frederick and others v Positive Solutions (Financial Services) Ltd [2018] EWCA Civ 431. The claimants were persuaded by a man called Qureshi to invest by making short term loans to a property development scheme that his business partner Mr Warren was intending to carry out. Monies for the investment were to be raised by re-mortgage of the claimants’ properties that would be arranged by Mr Warren who was an appointed financial advisor for and agent of the defendant (“PSL”). Mr Warren made the re-mortgage applications using PSL’s portal with the lender. Both Mr Warren and Mr Qureshi acted dishonestly and misappropriated money. The judgment of Flaux LJ contains a full review of the authorities and at [17] he approves the summary of the principles provided by the judge at first instance. They require two elements:
(1) The agent is carrying on activities as an integral part of the business activities of the principal and for the principal’s benefit, rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own.
(2) The commission of the wrongful act is a risk created by the principal by assigning those activities to the agent.
80.	The court concluded in Frederick v PSL that:
(1) Despite Mr Warren being an authorised agent of PSL, he was engaged in a recognisably independent business, namely the property investment scheme.
(2) The receipt by PSL of commission on the lending did not assist the claimants. It was automatically generated by the lender’s systems and held in a suspense account when it was received.
(3) The statement in the mortgage offer that “[PSL] recommended that you take out this mortgage” did not assist the claimants. It was not a representation the claimants relied upon.
(4) At most, PSL provided the opportunity for the wrongdoing and that did not suffice, without more, to give rise to vicarious liability, absent a holding out of someone in Mr Warren’s position as having authority to act for PSL.
81.	The defendants say that these authorities demonstrate that the agency claim is bound to fail, even putting the claimants’ case on the facts at its highest.
	Notice
82.	The claimants assert the defendants are fixed with notice of the wrongdoing of the Original Defendants (their undue influence, breach of fiduciary duty and fraudulent misrepresentations) and, as a consequence, the claimants are entitled to equitable damages. It is based on the defendants having notice of matters that should have led them to acquire actual knowledge. The defendants say the claimants have wrongly relied on the decisions of the House of Lords in Barclays Bank v O’Brien [1994] AC 180 and Royal Bank of Scotland v Etridge (No. 2) [2002] AC 773 as support for their claim. They say the claimants’ case is put forward in a way that is far wider than those decisions support. The two decisions concern the circumstances that will put a lender on inquiry where, typically, a wife stands surety for her husband’s debts. Their relationship is of itself sufficient to put the lender on notice of the risk of undue influence and, without more, the loan will not be enforceable against the wife.
83.	In O’Brien, Lord Browne-Wilkinson explained the principles in the following way (p.195 E to H):
“A wife who has been induced to stand as a surety but for her husband’s debts by his undue influence, misrepresentation or some other legal wrong has an equity as against him to set aside that transaction. Under the ordinary principles of equity, her right to set aside that transaction will be enforceable against third parties (e.g. against a creditor) if either the husband was acting as the third parties’ agent or the third party had actual or constructive knowledge of the facts giving rise to her equity.
			…
	The doctrine of notice lies at the heart of equity. Given that there are two innocent parties, each enjoying rights, the earlier right prevails against the later right if the acquirer of the later right knows of the earlier right (actual notice) or would have discovered it had he taken proper steps (constructive notice). In particular, if the party asserting that he takes free of the earlier rights of another knows of certain facts which put him on enquiry as to the possible existence of the rights of that other and he fails to make such enquiry or take such other steps as are reasonable to verify whether such earlier right does or does not exist, he will have constructive notice of the earlier right and take subject to it.”
84.	In Etridge, Lord Nicholls recognised (at paragraph [39]) that approach adopted in O’Brien was not a conventional use of the concept of constructive notice. And at paragraph [41] he explained that the use of constructive notice in the context of the wife/surety cases and the steps a lender is required to take to avoid being fixed with notice of the suretyship being obtained by wrongful conduct does not involve the lender making its own inquiries.
“…O’Brien envisages that the steps taken by the bank will reduce, or even eliminate, the risk of the wife entering into the transaction under any misapprehension or as a result of a new influence by her husband. The steps are not concerned to discover whether the wife has been wronged by her husband in this way. The steps are concerned to minimise the risk that such a wrong may be committed.”
85.	The approach in O’Brien and Etridge is an unusual one whereby the court accepted there is a wider policy concern and the equitable principle of notice was adapted (i) to reduce the likelihood of a person who has no involvement with the business for which the bank lends money entering into an unwise suretyship and (ii) if the necessary steps are not taken by the lender to reduce the risk of this happening, to enable the person who has acted as a surety to set aside the transaction. These are not claims that create an entitlement to damages. And they arise in a narrow field where typically a spouse acts as surety for the other spouse’s debts.
86.	At paragraph [88] Lord Nicholls distinguishes commercial from domestic lending. 
“Different considerations apply where the relationship between the debtor and guarantor is commercial, as where a guarantor is being paid a fee, or a company is guaranteeing the debts of another company in the same group. Those engaged in business can be regarded as capable of looking after themselves and understanding the risks involved in the giving of guarantees.”
87.	 The defendants say that there is no principled basis upon which the approach in O’Brien and Etridge should be extended to lending by a bank to clients of an IFA such as Kingsbridge. There is no special reason, such as in the spousal surety cases, that would warrant a development of the law in this way. The O’Brien and Etridge line of cases are concerned with the surety being freed from liability under the surety contract. That is not what the claimants are seeking in this claim. 
88.	The defendants also rely on a decision of His Honour Judge Pelling QC, sitting as a judge of the High Court, in Chancery Client Partners Ltd v MRC 957 Ltd [2016] EWHC 2142 (Ch). In that case the claimants purchased tax savings schemes involving certain structures being set up. The claimants sought to rescind the structures as being void or voidable ab initio on the basis of receipt by the first defendant of secret commissions. The claim failed. The judge applied the statement of general principle set out in Snell’s Equity 33rd Ed. at 15-09:
“Where … C wrongfully causes A to contract with B, the contract will only be set aside (a) if C was B’s agent acting within the scope of B’s actual or apparent authority or (b) if B actually knew of the factual circumstances that are treated by the court as vitiating A’s consent …”.
89.	The judge went on to review the decision in Etridge and noted Lord Nicholls’ observation that the principles in that case are confined to suretyship transactions and were of no relevance to the circumstances that applied in the case before him.
90.	In the amended claim, the claimants now wish to plead a revised case on knowledge but they do so in the context of a claim that Mr Turland provided knowing assistance without (i) seeking to join Mr Turland as a defendant, (ii) pleading a case for the existing defendants being liable for his wrongdoing and (iii) providing any case about the assistance Mr Turland is said to have provided. I will deal with the amended claim later in this judgment.  
	Liability of RBS Gibraltar
91.	The lending book of RBS Gibraltar has been assigned several times since the original loans were made in 2004 and later renewed. However, the second defendant (“RBS”) is the latest assignee. 
92.	The claimants’ case is focussed on Coutts and Mr Turland. It skates over the fact that RBS Gibraltar is a separate entity with its own credit application procedure. The claimants say that Coutts acted as agent for RBS Gibraltar and that Coutts procured the loans from RBS Gibraltar for the claimants. 
93.	RBS is said to be successor in title to RBS Gibraltar but that, of course, provides no basis for RBS having adopted whatever liability RBS Gibraltar may have had to the claimants arising from this claim because liabilities cannot be transferred by assignment. In the reply, the claimants make several points:
(1) At paragraph 5.2 they say it was represented that the mortgages, and not just the loan repayment obligations, had been transferred to RBS. 
(2) At paragraph 5.3.1 they say that RBS is fixed with notice of everything that was known by its subsidiary and agent RBS Gibraltar. 
(3)	At paragraph 5.3.2 it is said that the assignment was subject to the claimants’ equities and these include a right to equitable compensation. The difficulty for the claimants with this rather more hopeful assertion is that an equity can generally only be used as a set-off against an assignor. The way it is put in Smith, The Law of Assignment (2nd Ed – para. 26.29 to 26.37) is that there are two types of equity. The first class of equities are “vitiating factors” and the second class are “cross-claims”. At paragraph 26.37 the similarity between these classes of equity is explained:
“Equities are essentially defensive things. This is obvious in the first class, but is also true of the second class; the debtor can advance a cross-claim that he may have against the assignor only to diminish or extinguish the claim that the assignee has against him. There are no circumstances in which the debtor can actually recover money from the assignee.” [emphasis as in the original]
The authority for this proposition is the decision of the House of Lords in Pan Ocean v Creditcorp [1994] 1 WLR 161. The problem for the claimants is that the loans have been repaid in full and, therefore, any equities have been extinguished (or if they survive, they have nothing against which to bite).
	The claimants’ case in response
94.	A number of headline points were made by Mr McIlroy at the outset of his submissions:
(1) The claimants are not trying to establish a duty of care in negligence or an advisory duty against the banks by the back door.
(2) His primary submission is that the unusual circumstances of this case would have indicated to any honest and reasonable banker that the Original Defendants had an interest in the transaction they were recommending to their clients and, therefore, the defendants were on notice of the wrongdoing of the Original Defendants.
(3) The ordinary consequences of banking practice would have led to a discovery of the interest of the Original Defendants or, if they did not carry out any enquiries, that was because the bank was already committed to a relationship with Kingsbridge to which the claimants seek to attach either the label of agency or joint enterprise. The banks’ desire to pursue its relationship with Kingsbridge led it to completely disregard ordinary banking practices and its own internal processes for assessing applications for loans.
(4) There was an extraordinary sequence of events of which the court only has partial visibility at present because the claim has only proceeded to a preliminary stage. He describes Mr Turland’s witness statement as being “long on assertion but extremely short on detail”.
95.	In the course of his submissions, Mr McIlroy invited the court to draw a number of inferences from his review of the facts:
(1) Mr Turland had promised the original defendants that he would make sure that the RBS group produced 85% of the funding needed for the purchase of each apartment.
(2) Mr Turland misled the credit committee in relation to the rental guarantee. He described the arrangement as involving a pre-funding arrangement with an upfront rental payment by the tenants but not that there was a liability for unpaid rent by way of guarantee in the event that letting proved to be difficult.
(3) The tone of the communications between Mr Turland and RBS Gibraltar make it clear that Mr Turland regarded himself as being committed to the original defendants to deliver the 85% lending. This is why he involved RBS Gibraltar.
(4) The claimants had no direct dealings with Coutts. Documents such as advices of borrowing were sent to Kingsbridge. This indicates that the banks were leaving everything their agent, the Original Defendants.
(5) The loans made by Coutts and RBS Gibraltar were 12 month term loans that were renewable. The claimants say that Kingsbridge paid all the interest payments; whether this may have been from rental income retained for the purpose is not clear.
96.	The claimants’ case in relation to the fraudulent misrepresentations made by Mr McKee and Mr McMenamin and the undue influence they exercised over the claimants is that they are entitled to succeed against the defendants if they are on notice, constructive or actual, of the representations or influence. Mr McIlroy relies upon the review of the older authorities contained in Lord Browne-Wilkinson’s speech in O’Brien. He says those authorities survive the decisions in O’Brien and Etridge.
97.	Mr McIlroy referred to the decision of Fry J in Bainbrigge v Browne (1881) 18 Ch. D 188 in support of the claim. The headnote contains a convenient summary of the principles that are dealt with in the judgment in the context of a claim to set aside a charge over the reversionary interest in funds comprised in a marriage settlement:
“When a deed conferring a benefit on a father is executed by a child who is not emancipated from the father’s control, if the deed is subsequently impeached by the child, the onus is on the father to shew that the child had independent advice, and that he executed the deed with full knowledge of its contents, and with free intention of giving the father the benefit conferred by it. If this onus is not discharge the deed will be set aside.
This onus extends to a volunteer claiming through the father, and to any person taking with notice of the circumstances which raise the equity, but not further.”
98.	Mr McIlroy relies on the following passage in the judgment where the judge deals with the effect of undue influence:
“… against whom does the inference of undue influence operate? Clearly it operates against the person who is able to exercise the influence (in this case it was the father) and, in my judgement, it would operate against every volunteer who claimed under him, and also against every person who claimed under him with notice of the equity thereby created, or with notice of the circumstances from which the court infers the equity. But, in my judgement, it would operate against no others; it would not operate against a person who is not shown to have taken with such notice of the circumstances under which the deed was executed.”
99.	Mr McIlroy submits that this passage provides a basis for the defendants having liability because they were on notice of the undue influence and other wrongs. He says that if the defendants wanted to have enforceable security, it had to ensure that the claimants received independent advice, because their advisers, Mr McKee and Mr McMenamin were incapable of providing independent advice because of their conflicted position. 
100.	 During the course of argument, reference was made to the decision of the Privy Council in National Commercial Bank (Jamaica) Ltd v Hew [2003] UKPC 53. It is, however, unnecessary to deal with the decision in any detail. It suffices to note Lord Millett’s remarks at paragraph [42] where he distinguishes claims for undue influence in relation to a surety from a claim to set aside a loan:
“Where a transaction is obtained by undue influence, it must be set aside ab initio; and this requires a mutual accounting with mutual restitution by both parties. Where the transaction is one of guarantee this presents no difficulty. A surety incurs a liability but obtains no benefit. It is sufficient to set aside his liability; there is nothing for him to disgorge by way of counter restitution. But where the transaction is one of loan the position is very different. It would not be just simply to set aside the loan; this would leave the borrower on justly enriched. The proper course is to set aside the contract of loan and require the borrower to account for the monies received with interest at a rate fixed by the court. Since the effect is merely to vary the rate of interest, it is not surprising that is rare for the borrower himself to challenge the transaction.”
101.	Put shortly, the claimants say that they have a real prospect of establishing that Coutts and RBS Gibraltar had notice of Mr McKee and Mr McMenamin’s conflict of interest in having a personal interest in the development, their undue influence and their other breaches of duty and this is sufficient to ground liability on the part of the banks by turning a blind eye to their involvement. Mr Turland’s willingness to turn a blind eye was a result of his wish to develop a business relationship with Kingsbridge.
102.	It is an essential part of the claimants’ case that had the defendants followed what is pleaded as normal banking practice they would have discovered the extent of Mr McKee and Mr McMenamin’s involvement. The banks were on notice that a rent guarantee was to be provided and it is said that had normal banking practice been followed, the banks would have asked for a copy of the guarantee, or sought further information, which would have revealed Mr McKee and Mr McMenamin’s connection with the transactions.
103.	Mr McIlroy submits that the concept of agency for the purposes of the claim is less restrictive than a relationship giving the agent power to effect a change in the principal’s relations with third parties. He points to BCCI v Aboody [1989] 1 QB 923 and the Privy Council decision in Turnbull v Duval [1902] A.C. 429. However, the decision in Turnbull v Duvall was discussed at length in Lord Browne-Wilkinson’s speech in O’Brien and it provides no assistance in light of more recent authority.
104.	Mr McIlroy also relies on the decision of the House of Lords in Garnac Grain Company Inc v HMF Faure & Fairclough Ltd [1968] AC 1130. He submits that the analysis in Lord Pearson’s speech at p1137 is of assistance to the claimants’ case on agency. However, to my mind it does no more than describe in general terms what is required for the court to find a relationship of agency has been created. It does not undermine Mr Temple’s submission that a person is not an agent without having the power to affect the principal’s relations with third parties.
105.	The claimants’ approach to the application contrasts markedly with that of the defendants. Mr McIlroy focussed in particular on the facts and sought to demonstrate two matters. First, as I have indicated the claimants have a real prospect of demonstrating that the relationship between Coutts and the Original Defendants was such that the banks are fixed with notice of their dishonest conduct. Secondly, that there are many unknowns and it would be wrong to shut out the claimants from pursuing their claim at this early stage. The claimants’ approach was a response to the application under CPR Part 24 emphasising the issues of fact and it is notable, as Mr Temple pointed out, Mr McIlroy made almost no reference to the particulars of claim during his submissions. By contrast, the defendants’ approach was largely directed to their application under CPR 3.4(2) based upon their analysis of the law, assuming that the claimants will be able to establish the facts they rely on in their pleaded case.
106.	There was also a marked difference of approach concerning the authorities. At times it felt as if Mr McIlroy’s approach to the authorities was akin to poking a long dead fire with a stick in the hope that it would re-light.
Conclusions
107.	The application is made under CPR 3.4(2) or, alternatively, under CPR Part 24. Although it is necessary to treat the two rules separately because they apply different tests, there is a fair degree of overlap between them. The threshold in CPR 3.4(2)(a) is somewhat higher than under CPR 24.2. Under the former rule, the defendants have to show the claim is bound to fail.  When dealing with the claim I will identify my conclusions separately in relation to the two rules.
	RBS
108.	It is convenient to start by considering the claim made against RBS, assuming for immediate purposes that the claimants have a real prospect of succeeding against RBS Gibraltar. It is not at all clear why the claimants have opted to join RBS rather than RBS Gibraltar. RBS was merely an assignee of the loans which were discharged some years ago. 
109.	The representation relied on at paragraph 5.2 of the reply does not assist the claimants and there is plainly no substance in the assertion in paragraph 5.3.1 of the reply that RBS is fixed with knowledge of RBS Gibraltar. RBS had no involvement with the loans or their renewals. The mere fact that both Coutts and RBS Gibraltar are subsidiaries of RBS does not advance the claimants’ case.
110.	I accept the proposition put forward in Smith, The Law of Assignment that equities are “defensive things” and there are no circumstances in which the debtor can recover money from the assignee. It accords with the principle that liabilities do not pass with an assignment. The facts in Pan Ocean v Creditcorp are not on all fours with the facts in this case and, indeed, the ratio that emerges from the decision is on a slightly different point. As Lord Woolf put it at p.170H to 171A:
“There is no justification for subjecting an assignee, because he has received a payment in advance, to an obligation to make a repayment because of the non-performance of an event for which he has no responsibility.”
111.	However, the decision illustrates clearly that an assignee will not be liable for third party events outside its control. This is a case where the principal parties, the Original Defendants, are at several removes from RBS Gibraltar, let alone RBS. RBS is not liable for RBS Gibraltar’s secondary liability that is said to arise by virtue of Coutts acting as agent for it. In any event, even if the claimants’ equities attach to RBS as assignee, they were extinguished upon the discharge of the loans.
112.	The claim against RBS is bound to fail, assuming for these purposes that the claim against RBS Gibraltar has merit. Equally, the claimants have no real prospect of succeeding on this aspect of the claim.
	The claim against Coutts
113.	The claimants rely on two occasions in the particulars of claim on “normal banking practice”. 
(1)	In paragraph 13 the claimants say that in accordance with normal banking practice any bank would have asked to see a copy of the rental guarantee and discovered that no written guarantee existed and demanded details of the identity of the guarantor and discovered that Ogreda was connected to Mr McKee and Mr McMenamin.
(2)	In paragraph 33 they say that any bank acting in accordance with normal banking practice would have clarified the nature of Mr McKee and Mr McMenamin’s interest in the development and would not have proceeded to lend unless it was satisfied that the claimants had been given full disclosure of that interest and had received independent advice.
114.		I consider that on a strike out application the court should generally not strike out part of the case that is reliant upon expert evidence unless it is obviously unsustainable. I will assume here that the claimants’ case on “normal banking practice” is not bound to fail. The position is different when it comes to consider the test under CPR Part 24.2. In that instance, the court is entitled to consider the evidence supplied by the parties and to draw inferences and conclusions from gaps in the evidence. There may be good reasons at an early stage of the claim why a claimant has not been able to provide full evidence. However, it is well established that an evidential burden passes to the respondent and it seems to me the court is not bound to assume that the case is capable of being supported by expert evidence. It is striking that the claimants have not any made attempt to bolster this part of their case. A fully-fledged CPR compliant report would not have been needed. Some lesser form of evidence from an appropriate person that supported the claimants’ case would have sufficed.
115.	There may be circumstances in which an assertion that will have to be proved by expert evidence is sufficiently obvious to be capable of being accepted without support such as in the context of a professional negligence claim where the scope of the duty and the breach are not in doubt.   But I do not feel able to assume here that the claimants’ case about normal banking practice is correct or at least that the claimants have a real prospect of establishing it because the propositions they rely on are far from being obvious.
116.	The inferences that Mr McIlroy invites the court to adopt from his review of the documents do not provide significant support to the case that has been pleaded. It is right for the court to focus on the issues that arise from the pleaded case rather than to speculate. The inferences, to the extent they assist the claimants’ are indicators of a case they might make, not the case they have made.
117. 	I do not consider it is necessary to review the joint enterprise element of the claim at great length because it does not, on its own, reveal a cause of action. To say that parties are in a ‘joint enterprise’ has no fixed meaning in law and does not import or imply a legal relationship of a particular type. It is not a basis for secondary liability on its own. Most commonly it would mean that parties have a contractual relationship but it may mean as little as that two or more parties have plans to be jointly involved in a course of action, to a greater or lesser degree, together. It is of course a well known concept in the field of criminal law. 
118.	The claimants rely upon the first instance decision in ICS v West Bromwich as an example of liability attaching to a joint enterprise. However, the judgment does not bear reading in this way. At a general level, there was a joint enterprise between West Bromwich and FPS to market an equity release product. The causes of action included a claim based upon West Bromwich owing its customers a duty of care and/or there being a relationship of agency between FPS and West Bromwich. To describe their legal relationship as being a joint enterprise adds nothing. It is merely a convenient shorthand.
119.	In any event, it is an essential part of the case as it is pleaded that Coutts had agreed to arrange 85% interest free loans for the purchase of the apartments. It can be assumed in the claimants’ favour that Mr Turland wanted Coutts to lend on this basis with a view to Coutts becoming the preferred banking partner recommended by Kingsbridge to its clients. However, whatever Mr Turland may have hoped for, or even encouraged the Original Defendants to believe was possible, Coutts was unwilling to provide the packaged lending that was proposed. Mr Turland was unable to persuade Credit Risk to lend any more than 10% on an unsecured basis. Instead, he was left to persuade RBS Gibraltar to lend the bulk of the sums needed to buy the apartments on a secured basis. The arrangement that is said to lie behind the joint enterprise was fulfilled on a very different basis to that which was envisaged in the Loan Referral Sheets submitted to Coutts. It is notable that RBS Gibraltar did not regard the guarantee as a matter of importance. Indeed, the RBS Gibraltar conditions of acceptance require the rent to be paid into an account with an RBS subsidiary. And the claimants have no real prospect of establishing that Mr Turland and/or Coutts had the capacity to persuade RBS Gibraltar’s credit committee to lend other than in accordance with its usual risk practices.
120.	The claimants’ case relies on normal banking practice and in a substantial leap of logic they say that the failure to make enquiries about the guarantee is evidence “… that the arrangement between Coutts and Kingsbridge was not an arms-length transaction but was in pursuance of a common design”. [Paragraph 14 of the particulars of claim]. This simply does not make sense. 
121.	 Mr McIlroy did not press, and rightly so, a claim based upon Mr Turland being a joint tortfeasor with Mr McKee and Mr McMenamin in relation to the fraudulent misrepresentations. In any event, the facts relied upon by the claimants fall some way short of satisfying the three essential elements that will make a party liable as a joint tortfeasor as explained by Lord Neuberger in paragraph [55] of Fish & Fish Ltd v Shepherd UK.
122.	I consider that the claimants’ case on joint enterprise is bound to fail for the legal reasons I have indicated. But even if I am wrong about that, the claimants have no real prospect of succeeding at trial on this ground because (i) there is no evidence to support the case on ‘normal banking practice’ and (ii) the ground is unsustainable in any event on the facts and there is no good reason to believe that further enquiry will alter the position.
123.	The case based on agency is similarly flawed. The claimants’ case is put forward on a very narrow basis, namely that the Original Defendants acted as agent for Coutts for the purpose of arranging the loans. Plainly there were dealings between the Original Defendants and Coutts concerning the loans. For understandable reasons, the claimants left it to Kingsbridge to organise the purchases and loans; and undoubtedly, the Original Defendants acted as their agent. It is not obvious, however, why a relationship of agency can of necessity be found in the dealings between Coutts and the Original Defendants. There was strong mutual interest in the purchases going ahead and Coutts had extensive dealings with the claimants’ agents. It is hard to conceive why a relationship of agency between the bank and the claimants’ agent should arise or what purpose it would have served. As I have indicated earlier in this judgment, it is inconceivable that the facts relied upon by the claimants could give rise to a relationship of agency which entitled the Original Defendants to affect Coutts’ relations with the claimants. The facts point in the opposite direction. I have in mind in particular the role of Coutts Credit Risk committee and its refusal to agree to 85% unsecured lending. In this instance, the allegation of agency is not vulnerable to being struck out under CPR 3.4(2)(a) but it has no real prospect of success on the facts. I do not consider there is a real prospect that further enquiry will change the position.
124.	The remaining elements of the claim are less easy to deal with because of the fragmented way in which they are put forward. It is an essential part of the claimants’ case that actual or constructive notice of wrongdoing on its own is sufficient to give rise to liability on the part of Coutts without the need to show one of the more conventional grounds for secondary liability. They rely on the elements of normal banking practice I have referred to and for the reasons I have given, they have not provided any basis for believing that evidence may be available to support their pleaded case. In any event, the claimants’ case on notice shows a high degree of artificiality and seeks to stretch established principles well beyond breaking point.
125.	One of the major difficulties with this part of the claimants’ case is that Coutts and RBS Gibraltar are not seeking to enforce their security. The charges were paid off some time ago. The claimants are seeking equitable compensation. No authority was cited to me about whether a claim for undue influence could give rise to a claim for equitable compensation and/or damages where the outcome of the transaction is no longer capable of being rescinded. However, it appears from Snell’s Equity 33rd ed. at 20-048, and the cases cited there, that such a claim is possible; and I will assume in favour of the claimants that this is so. However, the claimants conflate the purchase transactions with the loan transactions. They seek to create a bridge from one to the other in order to create secondary liability on the part of the defendants. The undue influence and the breaches of duty by Mr McKee and McMenamin relate to the purchase of the apartments. The bridge the claimants rely on is simple ‘but for’ causation: that they would not have purchased the apartments without the funding arrangements. That does not suffice. It is not part of the claimants’ case that they were subjected to undue influence or breaches of duties by Coutts or RBS Gibraltar in relation to the loans so that there might be primary liability on their part. They are not seeking to rely upon a transaction that is vulnerable to being set aside due to them having notice of fraudulent misrepresentations, undue influence or breach of duties.
126.	The line of cases that is discussed in O’Brien and Etridge is not concerned with establishing liability for equitable compensation but preventing a party from relying upon a transaction that is tainted by wrongdoing. The bank surety cases are modern examples of this principle. The decision in Bainbrigge v Browne shows it in operation in connection with the creation of a charge over the reversionary interest in funds comprised in the marriage settlement. In Etridge the House of Lords came up with a pragmatic solution for lenders that did not create liability but, instead, showed lenders how they could avoid being fixed with notice of undue influence. In any event, these cases primarily concern preventing the party fixed with notice of wrongdoing from relying on a document or transaction.
127. 	The claimants’ case on knowledge seeks to circumvent the conventional approach to secondary liability by relying on notice as the basis for liability. It is not based on solid legal foundations and the claimants’ case on notice is bound to fail. If necessary, I would also hold that this aspect of the claim has no real prospect of success and no further enquiry has a real prospect of altering the position.
128.	The draft amended particulars of claim do not assist the claimants. A claim based upon knowing assistance is a conventional way of fixing a party with secondary liability but there are two fatal flaws in the way in which it is pleaded. First, it is an essential part of the cause of action to establish the assistance that was provided. Secondly, it is necessary to explain why, if it be alleged, that there is vicarious liability on the part of an employer. The draft amended particulars of claim deal with neither of these essential requirements. This is not as it is sometime pejoratively described ‘a mere pleading point’. The allegations against Mr Turland are extremely serious and it is incumbent upon the claimants to plead a case with care and without obvious gaps. All the more so when the draft amended claim is put forward in response to a strike out claim and is designed to plug gaps in the claimants’ case that had become apparent. 
129.	I would add that the knowing assistance claim is plainly a new claim for the purposes of CPR 17.4(2) and I do not consider that it arises out the same facts, or substantially the same facts that have been relied upon to date. The claimants’ application is therefore refused.
Limitation
130.	Save that it is relevant to the claimants’ application, it is strictly unnecessary to deal with the issues the defendants raise about limitation but I will do so as briefly as possible. The claimants accept, subject to their amended case, that the primary limitation period of six years has expired. The claim was issued on 6 November 2015. The claimants’ knowledge of relevant events prior to 6 November 2009 may be relevant. The claimants rely on section 32 of the Limitation Act 1980:
“(1) Subject to [subsections (3) and (4A)] below, where in the case of any action for which a period of limitation is prescribed by this Act, either – 
(a)	the action is based upon the fraud of the defendant; or
(b)	any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant; or
(c)	[omitted]
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.
References in this subsection to the defendant include references to the defendant’s agent and to any person through whom the defendant claims and his agent. [my emphasis]
(5)	For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”
131.	The claimants’ case is that the primary limitation period is extended by reason of the fraud and deliberate concealment of the Original Defendants. The defendants say that there are two issues for the court to consider on the basis of the case as originally pleaded. First, do the actions of the Original Defendants extend time for a claim against Coutts and RBS? Secondly, if they have that effect, were the relevant matters either known to the claimants prior to 6 November 2009 or could they have been discovered with reasonable diligence?
132.	The claimant’s case about agency has already been discussed. The claimants suggest that the original defendants that can be seen as agent for Coutts in the broader sense of agency for the purposes of section 32 relying on the passage in section 32(1) I have emphasised. They derive this approach to agency from two cases that arise in the field of construction – Applegate v Moss [1971] 1 QB 406 and King v Victor Parsons & Co [1973] 1 WLR 29. The facts in each case are quite similar. In Applegate v Moss the defendant developer agreed to build a house for the claimant and employed a builder to do the work. In King v Victor Parsons, the defendant contracted to sell a plot of land on which the foundations of a house and concrete underlay for the floor had been constructed. The work to the land had been carried out by the defendant’s builder. Thus, in each case there was a contract between the claimant and the defendant and a contract between the defendant and the builder. In both cases, despite the builder being an independent contractor, he was treated as the defendant’s agent for the purposes of the limitation provisions then in force (which are materially the same as the 1980 Act). 
133.	Both parties rely on a passage in the judgment of Park J in the Court of Appeal in Williams v Fanshaw Porter & Hazlehurst [2004] 1 WLR 3185 at [14]:
“There are four points on the wording of [section 32(1)(b)] which should be noted. (i) The paragraph does not say that the right of action must have been concealed from the claimant: it says only that a fact relevant to the right of action should have been concealed from the claimant. (ii) Although the concealed fact must have been relevant to the right of action, the paragraph does not say, and in my judgement does not require, that the defendant must have known that the fact was relevant to the right of action. In most cases where section 32(1)(b) applies the defendant probably will have known that the fact facts which she concealed the relevant, but that is not essential. All that is essential is that the fact must actually have been relevant, whether the defendant knew that not. The paragraph does of course require that the fact was one which the defendant knew, because otherwise he could not have concealed it. But it is not necessary in addition that the defendant knew that the fact was relevant to the claimant’s right of action. (iii) The paragraph requires only that any fact relevant to the right of action is concealed. It does not require that all facts relevant to the right of action concealed. (iv) the requirement is that the fact must be “deliberately concealed”. It is, I think, plain that, concealment is to be deliberate, the defendant must have considered whether to inform the claimant of the fact and decided not to. I would go further and accept that the fact which he decides not to disclose either must be one which was his duty to disclose, or must at least be one he could ordinarily have disclosed in the normal course of his relationship with the claimant, but in the case of which he consciously decided to depart from what he would normally have done and to keep quiet about it.” [sic]
134.	The claimants’ place reliance on a passage in the speech of Lord Millett in Cave v Robinson Jarvis & Rolf [2003] 1 AC 384 at [25]. (This decision came shortly before Williams v Fanshaw and was considered by the Court of Appeal). 
“In my opinion, section 32 deprives a defendant of a limitation defence in two situations: (i) where he takes active steps to conceal his own breach of duty after he has become aware of it; and (ii) where he is guilty of deliberate wrongdoing and conceals or fails to disclose it in circumstances where it is unlikely to be discovered for some time. But it does not deprive a defendant of a limitation defence where he is charged with negligence if, being aware unaware of his error all that he has failed to take proper care, there has been nothing for him to disclose.”
135.	The defendants rely on the actual knowledge of Mr Wilcox, the fourth claimant, more than six years before the claim was issued. They refer to his complaint letter dated 14 September 2011 in which it is said he discovered in 2008 that the guarantee was being provided by Ogreda, a company set up by Mr Eguren acting for Mr McKee, with McKee’s wife as a director. I do not consider this aspect of the defendant’s application requires further examination because the scope of the claimants’ knowledge is a fact intensive matter. 
136.	I can state my conclusions about limitation briefly. I consider that the effect of the decisions in Applegate v Moss and King v Victor Parsons should be confined to their particular circumstance and do not establish a principle that is helpful to the claimants. The Original Defendants cannot be seen as agents of Coutts and RBS Gibraltar for the purposes of section 32(1) of the Limitation Act 1980. If that conclusion were to be wrong, I consider that the scope of the factual enquiry in relation to knowledge is not suitable for a Part 24 application.
	Second limb of CPR 24.2
137.	I have not so far dealt with the second limb of CPR 24.2 which of course only arises	for consideration in relation to those aspects of the claim which are not subject to striking out under CPR 3.4(2)(a). It is salutary, however, to consider whether there are compelling reasons why this claim should be tried. It is accepted for the purposes of this application that the claimants were subjected to wrongdoing by the Original Defendants and only partial recovery has been made against their insurers. The claimants are highly critical of the way in which their access to documents has been limited by Coutts and point to differing versions of redacted documents showing inappropriate redaction.
138.	The claimants hope disclosure would bolster their claim. They are not, however, able to point to any solid footing upon which to base that belief. Furthermore, the second limb of CPR 24.2 requires the claimants to show a compelling reason why the claim should be tried. This is not a situation in which there is, for example, a developing area of law. In reality, the claimants seek to establish secondary liability by unconventional means that do not accord with established principles. I can see no basis for directing a trial to take place in reliance on the second limb of CPR 24.2.
139.	I will make an order dismissing the claim and deal with ancillary issues on the handing down of the judgment or on a later date fixed to the convenience of the parties.