The Court of Appeal (Longmore LJ, Underhill LJ and Sir Bernard Rix) today handed down its much anticipated judgment in The Guardian Homes case - Barclays Bank plc v Graiseley Properties Limited & Ors [2013] EWHC 3093 (Comm), which has been referred to, both in the Commercial Court and generally, as the LIBOR fixing “test case”.
The Court of Appeal dismissed Barclays’ appeal from the judgment of Flaux J in which he granted to the claimants, Graiseley, who are members of the Guardian Care Homes group, permission to amend their claim to include deceit/fraudulent misrepresentation and/or implied contractual terms on the basis of Barclays’ improper fixing of LIBOR. The Barclays’ appeal was heard together with the appeal by the claimants in two related cases from the decision of Cooke J in Deutsche Bank AG & Ors v Unitech Global Limited & Or [2013] EWHC 471 (Comm). Unitech’s appeal was allowed including on LIBOR aspects.
Barclays argued that the LIBOR claims amounted to an “obligation to disclose one’s own dishonesty” which was a cause of action unknown to English law. Longmore LJ did not regard this as “free from doubt” citing the important judgment of Rix LJ in ING Bank NV v Ros Roca SA[2012] 1 WLR 472. In any event, the Court of Appeal regarded such submission as inappropriate to an application for permission to amend (see the Judgment at [26]) observing that in the cases before it, the banks did propose the use of LIBOR and, at the very least where “they were representing that their own participation in setting the rate was an honest one”, “that is conduct just as much as a customer’s conduct in sitting down in a restaurant amounts to a representation that he is able to pay for his meal” referring to the well known case of DPP v Ray AC 370 (see the Judgment at [27]-[28]).
The Guardian Care Homes case will now proceed to a full trial before Flaux J commencing in April 2014 at which, for the first time, the Commercial Court will be able to give detailed consideration to the serious wrongdoing in relation to the fixing of LIBOR of Barclays, a leading BBA panel bank and one of the banks principally involved in the scandal and, on the basis of all the evidence, the interesting and much discussed issues of misrepresentation and implied terms to which the LIBOR scandal has given rise.
Stephen Auld QC of One Essex Court appeared successfully for Guardian Care Homes (leading Farhaz Khan and Simon Oakes, both of Outer Temple Chambers). The counsel team were instructed by Philip Young and Len Murray of Cooke, Young & Keidan LLP.
Full text of the Judgment available here.