UBAF Ltd v European American Banking Corporation: CA 1984

The defendant invited the plaintiff to take part in a syndicated loan. The defendant’s assistant secretary signed a letter to the plaintiff making representations, now claimed to be fraudulent. The defendant succeeded at first instance arguing that the signature was not that of the bank, and that even if it was, the action would be statute barred.
Held: The court refused to strike out the claim. A company itself made a representation, if it produced a document which was signed by an authorised officer or agent acting within the scope of his actual authority. This applied to bind the defendant bank. The nature of a syndicated loan was a fiduciary arrangement, and the obligations on a lead bank were continuing for limitation purposes, time did not run, and the obligation was not time barred. The issue would be settled at trial when it was established when the defendant could be said to have come to know of the alleged deceit.

Ackner LJ
[1984] QB 713, [1984] 1 WLR 508, [1984] CLY 1579
England and Wales
Citing:
ExplainedSwift v Jewsbury and Goddard 1874
. .
ExplainedHirst v West Riding Banking Co CA 1901
The representation on which the claim made was was in a letter signed by the branch manager of the defendant bank and the court evidently assumed that this could not be equated with the bank’s own signature.
Held: The action against the bank . .
ConsideredForster v Outred and Co CA 1981
A mother signed a mortgage deed charging her property to H as security for a loan to her son. She claimed the solicitor had been negligent in his advice. The solicitor replied that the claim was out of time. The loss accrued not when demand for . .

Cited by:
CitedNykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) HL 27-Nov-1997
A surveyor’s negligent valuation had led to the plaintiff obtaining what turned out to be inadequate security for his loan. A cause of action against a valuer for his negligent valuation arises when a relevant and measurable loss is first recorded. . .
CitedPegasus Management Holdings Sca and Another v Ernst and Young (A Firm) and Another ChD 11-Nov-2008
The claimants alleged professional negligence in advice given by the defendant on a share purchase, saying that it should have been structured to reduce Capital Gains Tax. The defendants denied negligence and said the claim was statute barred.
Banking, Limitation, Torts – Other, Company

Updated: 29 November 2021; Ref: scu.181338

Jack and Another (London Scottish Finance Ltd) v Craig and Others: ChD 17 Dec 2013

Application by the joint administrators of LSF for directions arising out of loan agreements made or acquired by LSF before the administration began, under which secured loans were made to consumers but which were unenforceable because they contravened provisions of the Consumer Credit Act 1974.
Held: The phrase ‘realisation of the security’ in section 106, is to be interpreted conventionally to achieve the policy objective (section 113) that the security provided under the regulated agreement could not be enforced so as to benefit the creditor to any greater extent than would be the case if the security were not provided. In a secured loan to which section 106(d) applied, the provisions did not catch all sums paid by the debtor in discharge of the loan.

Sir Terence Etherton Ch
[2013] EWHC 4047 (Ch), [2013] WLR(D) 498, [2014] Bus LR 424, [2013] CTLC 231
Bailii, WLRD
Insolvency Act 1986, Consumer Credit Act 1974 106(d)

Insolvency, Consumer, Banking

Updated: 27 November 2021; Ref: scu.519223

Fielding and Platt Ltd v Selim Najjar: CA 17 Jan 1969

The plaintiff company had contracted to make and export to the defendant an aluminium extrusion press. The defendant re-assured the plaintiff that it would be lawful for him to import the plant, but asked that the plant be described falsely on the invoice as ‘parts for rolling mill’. Payment was made by promissory notes. After the first two promissory notes had not been met, the plaintiff ceased production, and sued on the notes and succeeded summarily. The defendant appealed.
Held: The plaintiff was entitled to payment under the first note, because it had performed its obligations under the contract, and there was no failure of consideration. However there was no such completed consideration for the second promissory note, and the defendant should be allowed to defend.
The request to mis-invoice the goods, if illegal, was severable, and did not undermine the contract as a whole. To succeed in their defence of illegality, the defendant had to show that the plaintiff was aware that performance by importing the plant would be illegal, and had agreed to go ahead notwithstanding that illegality. That had not been demonstrated in this case.
An innocent party who is ignorant of the facts or circumstances that would make performance of a contract illegal may be allowed to recover money paid by him under the illegal contract.
Only in exceptional circumstances should a court deprive a claimant of judgment on a claim based on a promissory note.
Lord Denning MR said: ‘The plaintiffs, Fielding and Platt Ltd are manufacturers of machinery. Their business is in Gloucester. In the middle of 1965 they entered into a contract with a Lebanese company called SCIALE Aluminium of Lebanon. They agreed to make and sell to the Lebanese company an aluminium extrusion press for a total sum of andpound;235,000. The plant and equipment was to be delivered free on board at a British port. The time for delivery was 10 1/2 months from 19 June 1965. Payment was to be made by six promissory notes given by the defendant, the managing director of the Lebanese company, Mr Selim Najjar, personally; and he deposited shares, of his own, as security for the due payment of the promissory notes. The promissory notes were payable at intervals during the progress of the work. The first four were payable whilst the plaintiffs were making the machinery in England. Thus the first note was payable on 4 October 1965, for andpound;23,500; the second on 4 December 1965, for andpound;47,000, the third on 4 February 1966, for andpound;47,000; and the fourth on 4 April 1966, for another andpound;47,000. The fifth note was payable on 4 June 1966, for andpound;47,000, which was just about the time when the machinery was to be delivered to the port. The sixth note, the final one, for andpound;23,500, was payable on 4 August 1966.
On 4 October 1965, the first promissory note, for andpound;23,500, fell due. It was not paid. The defendant apologised for not paying it. He asked for a few days’ grace. He said that had been agreed. So be it. He was given a few days-indeed more than a few days. Still he did not pay. When the note was a fortnight overdue he wrote on 18 October 1965: ‘It is my estimate that by the middle of next month all will be arranged and I will be able to proceed with the payments.’ He realised that his non-payment might result in delays on the English side, for he added: ‘Please remember that any delays on your part due to delayed payments will be acceptable.’ When the note was more than three weeks overdue, the plaintiffs decided to suspend work on the contract. On 27 October 1965, they cabled to the Lebanese company:
‘We have today suspended all work on your contract with us and this includes notification to all our material suppliers that they must do no further work on this contract. We have been forced to take this action to comply with the requirements of our authorities. Our current financial commitment to material and equipment suppliers plus design and stock material and labour charges, is extremely heavy. We trust you appreciate that this is your liability. As a result of suspending all work you will appreciate that our delivery date will be considerably extended and the amount of the delay will depend on the time taken for you to resolve your difficulties.’
The defendant never paid the first promissory note or any of the others. He never paid anything. In consequence, the plaintiffs suspended work on the contract, and it remained suspended. No further work was done on it. There were negotiations for a revival of the contract, but they came to nothing.
Stopping there, it is quite plain to me that the defendant was liable to pay the first of the promissory notes. We have repeatedly said in this court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary. It is suggested that, on the first note, there was a failure of consideration. That suggestion is quite unfounded. The plaintiffs were getting on with their part of the contract. They were, they say, ordering goods from their suppliers and getting on with the work. At any rate, there is no evidence to the contrary; and, unless they were themselves in default, they were clearly entitled to payment of the first note. The position as to the second note is different. Before it fell due, the defendant said: ‘I cannot pay’; and the plaintiffs replied: ‘We, therefore, suspend work.’ Seeing that the plaintiffs had suspended work, they could not claim payment in full, but at most damages. They could not sue on each note as it fell due-each of the six-when they had suspended all work on the contract. So there is an available defence on the second note. But not on the first note.
This brings me to the second point. In answer to the claim in both notes, the defendant raises a defence of illegality. He says that it was his intention to break the laws of the Lebanon and that the plaintiffs were parties to it. In order to import the extrusion press into the Lebanon, he had to get an import licence from the Lebanon authorities. He had already got a licence to import a two million pound rolling mill, but he had not got a licence to bring in an extrusion press. His intention was to import it without a licence, and he says that the plaintiffs agreed to help him to do so. The plaintiffs agreed, he says, to put in a false invoice. He says: ‘I asked you to invoice the press as part of a rolling mill, and you agreed to it, and, therefore, you cannot recover anything.’ That defence does not commend itself to me. Here is a man who prays in aid his own illegality-he admits he was trying to evade the laws of his own country-and he seeks to implicate the plaintiffs in it.
In order for this to be any kind of defence, he must show first of all that the contract contained a term that the plaintiffs were to give a false invoice; so that it could not lawfully be performed. For if it would be lawfully performed (by giving a correct invoice) the plaintiffs can certainly sue on it. I do not think there was any such term. During the negotiations the Lebanese company did ask the plaintiffs to invoice the press as ‘parts for rolling mill’. But this request did not, as I read the correspondence, become a term of the contract. The contract was concluded on 13 July 1965. And the only subsequent reference was contained later in the confirmation which the plaintiffs sent to the Lebanese company. There was a long detailed description of the goods covering many pages and then, in brackets, were the words (‘to be invoiced as ‘parts for rolling mill”). That was a mere notification by the Lebanese company of the way they wanted an invoice made out. It was not a term of the contract itself. The plaintiffs would therefore quite justifiably refuse to give such invoice, and insist on the contract being lawfully performed.
In the second place, even if it were a term, the defendant would have to show that the plaintiffs were implicated in this illegality, that is that they had knowledge of it and were actively participating in it, see Foster v Driscoll, Lindsay v Attfield, Lindsay v Driscoll ([1929] 1 KB 470 at p 518; [1928] All ER Rep 130 at pp 146, 147) per Sankey LJ. I can see no evidence worthy of the name to suggest that the plaintiffs knew of this illegality. The only evidence is contained in a cable about the import licence. On 16 June 19658 the plaintiffs stated that they were agreeable to the proposed contract ‘subject to evidence of satisfactory importing licence arrangements’. The Lebanese company replied:
‘Concerning our import licence, we have a regular import licence for a total amount of two million sterling, for a complete aluminium plant. This licence is more than what we require for an extrusion press, and since we don’t want to lose our right for the remaining amount, we want the material to be invoiced as ‘parts for rolling mill’. This of course is for local consumption. We discussed these details with your representative here, and will make sure that you do the correct thing when the time comes. Please bear in mind that few items (just any thing) of the total order should be in Beirut the first week of October the latest, because our licence is valid until October 24, 1965, and before that date something should have arrived.’
I do not think that cable was enough to give the plaintiffs knowledge of the illegality. It only shows that the Lebanese company thought it convenient, for local consumption, to have the machines invoiced as parts for a rolling mill, instead of the more accurate description of an aluminium extrusion press.
I cannot help remarking that the defendant seems to have a special fondness for false invoices. At a later stage he suggested that the plaintiffs should give an invoice for only half the cost, instead of the whole; so as to save customs duties. He also suggested that the plaintiffs should write a false letter (which he drafted) to show the Lebanese customs authorities. The plaintiffs very properly did not agree to those suggestions. And when the matter finally came to a head, the plaintiffs firmly said: ‘We must invoice the goods correctly.’ I know there is a suggestion in the affidavit of the defendant that the plaintiffs were implicated, but, in the face of the documents, I see no substance in this suggestion.
There is another point: even if there was a term that these goods should be invoiced falsely in order to deceive the Lebanese authorities, I do not think it would render the whole contract void. That term would be void for illegality. But it can clearly be severed from the rest of the contract. It can be rejected, leaving the rest of the contract good and enforceable. The plaintiffs would be entitled, despite the illegal term, to deliver the goods FOB English port, and send a true and accurate invoice to the Lebanese buyer. The Lebanese buyer could not refuse the goods by saying ‘I stipulated for a false invoice’. He could not rely on his own iniquity so as to refuse payment.
In my opinion, therefore, the defence of illegality is clearly bad. I would allow judgment to be entered on the first note and for the interest thereon; and give leave to defend as to the second.’
Davies LJ said: ‘I agree with the result reached by Lord Denning MR and I do not propose to add anything.’
Widgery LJ said: ‘I also agree. I find each of the main issues in this case one of some difficulty and I am much indebted to counsel for the defendant for his argument; but in the end I have concluded that they are sufficiently determined to justify judgment under RSC, Ord 14 in respect of the amount of the earlier promissory note. So far as the allegation of illegality is concerned, there are I think two independent and sufficient answers to it. First, in order to succeed on this question, the defendant must show that the plaintiffs were aware of the illegal purpose in the falsification of the invoice and that they agreed actively to participate in that purpose so that goods could be illegally imported into the Lebanon which would not otherwise be allowed to enter. The only basis on which it is said that the plaintiffs at any material time had knowledge of that illegal purpose is the telex message of 18 June from the Lebanese company, to which Lord Denning MR has referred. If I may just repeat again the essential words, they were replying to an enquiry from the plaintiffs as to their import licence, and they stated:
‘We have a regular import licence for a total amount of two million sterling, and for a complete aluminium plant. This licence is more than what we require for an extrusion press and since we don’t want to lose our right for the remaining amount, we want the material to be invoiced as’ parts for rolling mill’. This, of course, is for local consumption . . ‘
When that was first read to us, for my part I found it quite incomprehensible, and it is not until one gets further in the correspondence that the real point of it becomes clear. The plaintiffs, of course, had to judge the legality or illegality of what was proposed, without the benefit of the correspondence which developed months later as to the terms of that telex message. I can see no reason whatever to suppose that the plaintiffs should see more in that message than that the invoice was to indicate that the goods were part of a larger matter, which in itself would not involve any illegality that I can see. It is only later that one appreciates that the character of the goods may be of some relevance, and if the plaintiffs did agree to invoice the goods as part of a larger whole, I cannot for my part see that that would involve them in any illegality sufficient to excuse the defendant from liability in this case. Alternatively, as Lord Denning MR has said, I am of the opinion that there was no term in this contract requiring the plaintiffs to invoice the goods as part of a rolling mill. The chief contractual document is a formal and lengthy quotation which the plaintiffs submitted to the defendant setting out details of the machine to be supplied; and on 13 July the Lebanese company accepted that quotation in these words:
‘please consider this letter as an official order based on your quotation of July 5, 1965 and our different telexes to which you have given your agreement.’
At that point there was nothing in the contractual documents to imply an obligation on the plaintiffs to invoice the goods as part of a rolling mill. Counsel for the defendant has referred to the telexes mentioned in that letter, but there was no agreement by the plaintiffs to any telex involving a special form of invoicing. When the plaintiffs received that acceptance of their offer, they sent a formal and detailed confirmation; and it is to be observed that under the terms of their agreement no contract was to be binding on them until that confirmation had been given. In my judgment, that was no more than a confirmation of that which was already agreed, and it would be quite unreal to regard it as a counter-offer containing a new term whereby the goods were to be invoiced as part of a rolling mill.
On the second issue, namely, the failure of consideration, for which the notes were given, my opinion is that these notes were given by the defendant in consideration of the plaintiffs entering into the agreement with the Lebanese company and carrying out that agreement. It is arguable that if counsel for the defendant can sustain his contention that the plaintiffs repudiated the contract in November and that that repudiation was accepted by the Lebanese company, then perhaps it can be shown that liability on bills maturing after the date of the repudiation had itself been determined; but, like Lord Denning MR I can see no possible ground on which it can be said that the consideration for the first bill, which would mature in October 1965, at a time when the plaintiffs were in no way in default, can have been rendered wholly ineffective by virtue of that which followed.
I also would accordingly allow the appeal to the extent that judgment should be entered only in respect of the amount of the first bill and interest thereon.’

Lord Denning MR, Davies, Widgery LJJ
(1969) 113 Sol Jo 160, [1969] 1 WLR 357, [1969] 2 All ER 150
England and Wales
Citing:
CitedScott v Gillmore 6-Jul-1810
A bill of exchange, part of the consideration for which is spirituous liquor sold in less quantities than of 20s. value, is totally void, though part of the consideration was money lent -The statute 24 G. 2, c. 40, s. 12, making illegal the sale of . .
CitedRegazzoni v KC Sethia (1994) Ltd CA 1956
The rule against enforcing foreign political laws did not require it to enforce a contract that violated Indian laws against export to South Africa. The court permitted recognition but not enforcement of foreign revenue laws.
Denning LJ said: . .

Lists of cited by and citing cases may be incomplete.

Contract, Banking

Updated: 23 November 2021; Ref: scu.459793

Director of Public Prosecutions v Scarlett: CACD 7 Feb 2000

A defendant subject to a confiscation order in criminal proceedings for drugs related offences could be ordered to repatriate assets from banks accounts held abroad. The absence of an explicit power in this behalf did not prevent the order because of the wide power to make such ancillary orders to ensure compliance with an order as appeared necessary. An additional punishment for contempt for failing to obey was not punishing him twice, and he could purge the contempt if he chose.

Times 07-Feb-2000
England and Wales

Criminal Sentencing, Banking, Contempt of Court

Updated: 23 November 2021; Ref: scu.80043

Credit Suisse v Allerdale Borough Council: CA 20 May 1996

Builder’s Guarantee Ultra Vires LA

The council set out to provide a swimming pool using powers under s.19 of the 1976 Act. Purporting to use powers under s.111 of the 1972 Act, it set up a company to develop a site by building a leisure pool and time-share units, with a view to selling the time-share units to pay for the cost of building the pool. The council gave a guarantee to help the company to finance the project, and on the strength of this the company obtained a facility from the bank. The sale of the time-share units proved unsatisfactory and the company went into liquidation. The bank sued the council under the guarantee to recover the sums owed to it by the company.
Held: The guarantee was ultra vires where it had been given to a company when the authority was acting outside it’s proper powers. Where a statutory corporation purports to enter into a contract which it is not empowered by the relevant statute to enter into, the corporation lacks the capacity to make the supposed contract. This lack of capacity means that the document and the agreement it contains do not have effect as a legal contract. It exists in fact but not in law. It is a legal nullity. The purported contract which is in truth not a contract does not confer any legal rights on either party. Neither party can sue on it. Any third party dealing with a local authority should be aware of that fact [of limited capacity and competence] and of the potential legal risk.
Hobhouse LJ said: ‘The discretion of the court in deciding whether to grant any remedy is wide one. It can take into account many considerations, including the needs of good administration, delay, the effect on third parties, and the utility of granting the relevant remedy.’

Hobhouse LJ
Times 20-May-1996, [1997] QB 306
Local Government Act 1972 111, Local Government (Miscellaneous Provisions) Act 1976 819
England and Wales
Citing:
Appeal fromCredit Suisse v Allerdale Borough Council QBD 17-Jun-1994
A Local Authority’s guarantee for its own company was void, having been given for impermissible reasons. . .
AppliedLondon and Clydeside Estates v Aberdeen District Council HL 8-Nov-1979
Identifying ‘maandatory’ and ‘regulatory’
The appellants had sought a Certificate of Alternative Development. The certificate provided was defective in that it did not notify the appellants, as required, of their right to appeal. Their appeal out of time was refused.
Held: The House . .

Cited by:
CitedStretch v The United Kingdom ECHR 24-Jun-2003
The claimant had taken a lease of property from a local authority. Relying upon an option for renewal, he invested substantially in the property, but it was then decided that the option was ultra vires.
Held: Property rights protected under . .
CitedRegina v Soneji and Bullen HL 21-Jul-2005
The defendants had had confiscation orders made against them. They had appealed on the basis that the orders were made more than six months after sentence. The prosecutor now appealed saying that the fact that the order were not timely did not . .
CitedKilby v Basildon District Council Admn 26-Jul-2006
Tenants complained that the authority landlord had purported to vary a clause in his secure tenancy agreement which gave certain management rights to tenants.
Held: The powers to let on secure tenancies were governed by statute. The clause . .
CitedBirmingham City Council v Qasim and Others CA 20-Oct-2009
The council argued that the defendant was not a tenant granted to him as a secure tenancy since he had not been granted the tenancy in accordance with its policies. An employee had manipulated the Council’s system to grant tenancies to bypass the . .

Lists of cited by and citing cases may be incomplete.

Local Government, Contract, Company, Banking

Updated: 20 November 2021; Ref: scu.79620

Iranian Offshore Engineering and Construction Co v Council af The European Union: ECFI 6 Sep 2013

ECJ Common foreign and security policy – Restrictive measures against Iran with the aim of preventing nuclear proliferation – Freezing of funds – Action for annulment – Time-limit for amendment of the form of order sought – Admissibility – Obligation to state reasons – Manifest error of assessment

Pelikanova P
T-110/12, [2013] EUECJ T-110/12
Bailii
European

International, Banking

Updated: 20 November 2021; Ref: scu.515166

Barclays Bank v WJ Simms and Cooke (Southern) Ltd: QBD 1979

The customer made out a cheque to pay his builder, but countermanded it. The bank paid the cheque when it was presented by mistake, and now sought repayment from the builder.
Held: The bank succeeded. The court discussed the extent of a banker’s obligations to its customers.
Robert Goff J set out the defences to a claim in restitution: ‘(1) If a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact. (2) His claim may however fail if (a) the payer intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge and does discharge a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith or is deemed in law to have done so.’
‘It is a basic obligation owed by a bank to its customers that it will honour on presentation cheques drawn by the customer on the bank, provided that there are sufficient funds in the customer’s account to meet the cheque, or the bank has agreed to provide the customer with overdraft facilities sufficient to meet the cheque. Where the bank honours such a cheque, it acts within its mandate, with the result that the bank is entitled to debit the customer’s account with the amount of the cheque, and further that the bank’s payment is effective to discharge the obligation of the customer to the payee on the cheque, because the bank has paid the cheque with the authority of the customer.
In other circumstances, the bank is under no obligation to honour its customer’s cheques. If however a customer draws a cheque on the bank without funds in his account or agreed overdraft facilities sufficient to meet it, the cheque on presentation constitutes a request to the bank to provide overdraft facilities sufficient to meet the cheque. The bank has an option whether or not to comply with that request. If it declines to do so, it acts entirely within its rights and no legal consequences follow as between the bank and its customer. If however the bank pays the cheque, it accepts the request and the payment has the same legal consequences as if the payment had been made pursuant to previously agreed overdraft facilities; the payment is made within the bank’s mandate, and in particular the bank is entitled to debit the customer’s account, and the bank’s payment discharges the customer’s obligation to the payee on the cheque.
In other cases, however, a bank which pays a cheque drawn or purported to be drawn by its customer pays without mandate. A bank does so if, for example, it overlooks or ignores notice of its customer’s death, or if it pays a cheque bearing the forged signature of its customer as drawer, but, more important for present purposes, a bank will pay without mandate if it overlooks or ignores notice of countermand of the customer who has drawn the cheque. In such cases the bank, if it pays the cheque, pays without mandate from its customer; and unless the customer is able to and does ratify the payment, the bank cannot debit the customer’s account, nor will its payment be effective to discharge the obligation (if any) of the customer on the cheque, because the bank had no authority to discharge such obligation.
It is against the background of these principles, which were not in dispute before me, that I have to consider the position of a bank which pays a cheque under a mistake of fact. In such a case, the crucial question is, in my judgment, whether the payment was with or without mandate. The two typical situations, which exemplify payment with or without mandate, arise first where the bank pays in the mistaken belief that there are sufficient funds or overdraft facilities to meet the cheque, and second where the bank overlooks notice of countermand given by the customer. In each case there is a mistake by the bank which causes the bank to make the payment. But in the first case, the effect of the bank’s payment is to accept the customer’s request for overdraft facilities; the payment is therefore within the bank’s mandate, with the result that not only is the bank entitled to have recourse to its customer, but the customer’s obligation to the payee is discharged. It follows that the payee has given consideration for the payment; with the consequence that, although the payment has been caused by the bank’s mistake, the money is irrecoverable from the payee unless the transaction of payment is itself set aside. Although the bank is unable to recover the money, it has a right of recourse to its customer. In the second case, however, the bank’s payment is without mandate. The bank has no recourse to its customer; and the debt of the customer to the payee on the cheque is not discharged. Prima facie, the bank is entitled to recover the money from the payee, unless the payee has changed his position in good faith, or is deemed in law to have done so.’

Robert Goff J
[1979] 3 All ER 522, [1980] QB 677
England and Wales
Cited by:
CitedSandra Estelle Fielding v The Royal Bank of Scotland Plc CA 11-Feb-2004
The husband and wife had signed a bank mandate allowing the bank to act upon the authorisation of either of them. The wife complained that the bank should not be able to recover from her any sums expended by the husband.
Held: The mandate . .
CitedLloyds Bank Plc v Independent Insurance Co Ltd CA 26-Nov-1998
The bank had made an electronic transfer of funds for a customer in satisfaction of that customer’s proper debt, but it was done under a mistake of fact as to the cleared status of funds received.
Held: The appeal was turned down. The bank was . .
CitedOffice of Fair Trading v Abbey National Plc and seven Others ComC 24-Apr-2008
The Office sought a declaration that the respondent and other banks were subject to the provisions of the Regulations in their imposition of bank charges to customer accounts, and in particular as to the imposition of penalties or charges for the . .
CitedPortman Building Society v Hamlyn Taylor Neck (a Firm) CA 22-Apr-1998
The mortgage advance had been against an express requirement that the client use the property as his private residence. After the client defaulted, the appellant lender discovered that the solicitors acting for themselves and the lay client had . .
CitedMarine Trade Sa v Pioneer Freight Futures Co Ltd Bvi and Another ComC 29-Oct-2009
The parties stood to make substantial losses against each other under contracts for differences after the dramatic fall in the freight market in the financial turmoil of late 2008. . .

Lists of cited by and citing cases may be incomplete.

Banking, Contract

Leading Case

Updated: 11 November 2021; Ref: scu.194776

A and Others v Minister van Buitenlandse Zaken: ECJ 14 Mar 2017

Account freezing was act of State, not EU

ECJ (Area of Freedom, Security and Justice Area of Freedom, Security and Justice External Relations : Common Foreign and Security Policy Fundamental Rights : Charter of Fundamental Rights – Judgment)Reference for a preliminary ruling – Common Foreign and Security Policy (CFSP) – Specific restrictive measures directed against certain persons and entities with a view to combating terrorism – Common Position 2001/931/CFSP – Framework Decision 2002/475/JHA – Regulation (EC) No 2580/2001 – Article 2(3) – Inclusion of the ‘Liberation Tigers of Tamil Eelam (LTTE)’ on the list of persons, groups and entities involved in terrorist acts – Question referred for a preliminary ruling concerning the validity of that inclusion – Compliance with international humanitarian law – Concept of ‘terrorist act’ – Actions by armed forces during periods of armed conflict

K. Lenaerts, P
ECLI:EU:C:2017:202, [2017] EUECJ C-158/14, [2017] WLR(D) 180
Bailii, WLRD
European

Human Rights, Crime, Banking

Updated: 11 November 2021; Ref: scu.580690

In re Brightlife Ltd: ChD 1987

Parties contractual freedom to be respected

A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not authorise the selling, factoring or discounting . . of its book debts or other negotiable instruments’
Held: Whilst purporting to create a fixed charge over present and future book debts and imposing restrictions on the sale, factoring or discounting of book debts, the debenture did not require the chargor to pay them into an account with the chargee. Reference to a ‘first specific charge’ over book debts had to yield to the only conclusion from the rights in fact granted that the charge over book debts was a floating charge only.
Hoffmann J said: ‘But a floating charge is consistent with some restriction upon the company’s freedom to deal with its assets. For example, floating charges commonly contain a prohibition upon the creation of other charges ranking prior to or pari passu with the floating charge. Such dealings would otherwise be open to a company in the ordinary course of its business.’ and
‘I do not think that the bank balance falls within the term ‘book debts or other debts’ as it is used in the debenture. It is true that the relationship between banker and customer is one of debtor and creditor. It would not therefore be legally inaccurate to describe a credit balance with a banker as a debt. But this would not be a natural usage for a businessman or accountant. He would ordinarily describe it as ‘cash at bank’: compare the balance sheet formats in Part I, section B of Schedule 4 to the Companies Act 1985′ and ‘In this debenture, the significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The significant feature of the Brightlife debenture was that the company was free to collect its debts and pay the proceeds into its bank account: ‘Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The company had given a charge over its book debts to te bank. The bank asserted that it was a first specific charge and purported to restrict the company’s right to factor its debts without the bank’s consent. A debenture holder then gave notice to fix the charge, but only a week before a voluntary winding up resolution.
Held: The charge on the book debts was a floating charge, and having crystallised a week before, it had priority over the other debts.
Although clause 3(A)(ii)(a) referred to a ‘first specific charge’ over book debts and others, ‘the rights over the debts created by the debenture were in my judgment such as to be categorised in law as a floating charge.’ . . And a ‘significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge . . I do not think that it is open to the courts to restrict the contractual freedom of parties to a floating charge on such grounds. The floating charge was invented by Victorian lawyers to enable manufacturing and trading companies to raise loan capital on debentures . . without inhibiting its ability to trade. . The public interest requires a balancing of the advantages to the economy of facilitating the borrowing of money against the possibility of injustice to unsecured creditors . . arguments for and against the floating charge are matters for Parliament rather than the courts.’

Hoffmann J
[1987] 1 Ch 200, [1988] VLY 306
England and Wales
Citing:
DistinguishedSiebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .
DistinguishedIn Re Keenan Bros Ltd 1986
(Supreme Court of the Republic of Ireland) A debenture conferred a fixed charge on book debts. It specifically provided that withdrawals from the account to which the proceeds of the book debts had to be credited might only be made with the prior . .

Cited by:
AppliedAgnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle PC 5-Jun-2001
(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
ConsideredRe: A Company (No. 005009 of 1987), ex parte Copp ChD 1988
MC Bacon Ltd had borrowed money from a bank. The loan was unsecured. The company got into financial difficulty. The bank commissioned a report on the company’s financial affairs; and insisted on the grant of a debenture to secure the company’s . .
AppliedRe: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
CitedBuchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
CitedQuickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
CitedIn Re Westmaze Ltd (In Administrative Receivership) ChD 15-May-1998
Westmaze were mechanical engineers. They gave a charge to secure borrowings, which described itself as a fixed charge.
Held: A Charge over a company’s book and trading assets was in fact floating even though described as a fixed charge unless . .

Lists of cited by and citing cases may be incomplete.

Banking, Company, Insolvency

Leading Case

Updated: 09 November 2021; Ref: scu.181234

Edward Owen Engineering Ltd v Barclays Bank International Ltd: CA 1978

Performance guarantees are effectively obligations to pay on demand within the terms of the guarantee, irrespective of the rights and wrongs of any dispute between beneficiary and principal under the terms of their separate contract, subject only to fraud.
Lord Denning said: ‘It has been long established that when a letter of credit is issued and confirmed by a bank, the bank must pay it if the documents are in order and the terms of the credit are satisfied. Any dispute between buyer and seller must be settled between themselves. The bank must honor the credit . . To this general principle there is an exception in the case of what is called established or obvious fraud to the knowledge of the bank.’
. . and ‘So, as one takes instance after instance, these performance guarantees are virtually promissory notes payable on demand. So long as the Libyan customers make an honest demand, the banks are bound to pay and the banks will rarely, if ever, be in a position to know whether the demand is honest or not. At any rate they will not be able to prove it to be dishonest. So they will have to pay.
All this leads to the conclusion that the performance guarantee stands on a similar footing to a letter of credit. A bank which gives a performance guarantee must honour that guarantee according to its terms. It is not concerned in the least with the relations between the supplier and the customer; nor with the question whether the supplier has performed his contracted obligation or not; nor with the question whether the supplier is in default or not. The bank must pay according to its guarantee, on demand, if so stipulated, without proof or conditions. The only exception is when there is a clear fraud of which the bank has notice.’

Lord Denning MR
[1978] 1 All ER 976, [1978] 1 QB 159, [1977] 3 WLR 764, [1978] 1 Lloyds Rep 166
England and Wales
Citing:
ApprovedR D Harbottle (Mercantile) Limited v National Westminster Bank Limited 1978
The plaintiffs had entered into contracts of sale with Egyptian buyers. Each contract provided that the plaintiffs would establish a guarantee confirmed by a bank in favour of the buyers. The guarantees were widely expressed, and secured payment on . .

Cited by:
CitedManx Electricity Authority v J P Morgan Chase Bank CA 3-Oct-2003
The claimant sought to appeal an order striking out its claim against the defendant under a performance bond. The defendant denied that the demand was valid, saying it did not allege a current breach of the contract.
Held: The point upon which . .
CitedMarubeni Hong Kong and South China Ltd v Ministry of Finance of Mongolia CA 13-Apr-2005
A letter was written by the Mongolian Ministry of Finance guaranteeing payment for textile plant and machinery to be supplied to a Mongolian company. A letter from the justice minister confirmed the authority of the finance minister to sign the . .

Lists of cited by and citing cases may be incomplete.

Banking

Leading Case

Updated: 02 November 2021; Ref: scu.186574

Duncan Fox and Co v North and South Wales Bank: HL 1880

The case concerned a claim by an indorser of a bill of exchange that he was subrogated to securities provided by the acceptor to the holder of the bill. The court identified three kinds of cases in which rights of subrogation had been recognised and where suretyship principles apply: (1) where there is an agreement creating the relationship of principal and surety to which the creditor is a party; (2) where there is an agreement creating the relationship of principal and surety to which the creditor is not a party; and (3) where there is no agreement but that there is nevertheless a primary and secondary liability of two persons, the debt being ‘as between the two, that of one of those persons only, and not equally of both, so that the other, if he should be compelled to pay it, would be entitled to reimbursement from the person by whom (as between the two) it ought to have been paid’.
Lord Selborne LC did not however restrict the categories of cases in which the remedy of subrogation might be available so much as identify situations that were broadly analogous to those of the case before it.

Lord Selborne LC
(1880) 6 AC 1, [1874-80] All ER Rep Ext 1406
England and Wales

Equity, Banking

Leading Case

Updated: 02 November 2021; Ref: scu.181984

Tai Hing Ltd v Liu Chong Hing Bank: PC 1985

(Hong Kong) The relationship between banker and customer is principally a contractual one between debtor and creditor. As between the banker and his customer, the risk of loss through forgery of the customer’s signature falls on the banker unless negligence or other disentitling conduct of the customer precludes the customer’s claim. No wider duty should be imposed on the customer beyond a duty not to act in a way that facilitates forgery and to make the bank aware of any known forgeries occurred: ‘The business of banking is the business not of the customer but of the bank. They offer a service, which is to honour their customer’s cheques when drawn upon an account in credit or within an agreed overdraft limit. If they pay out upon cheques which are not his, they are acting outside their mandate and cannot plead his authority in justification of their debit to his account. This is a risk of the service which it is their business to offer.’
The Board considered the need for the Board to follow earlier decisions of the House of Lords: ‘It was suggested, though only faintly, that even if English courts are bound to follow the decision in Macmillan’s case the Judicial Committee is not so constrained. This is a misapprehension. Once it is accepted, as in this case it is, that the applicable law is English, their Lordships of the Judicial Committee will follow a House of Lords’ decision which covers the point in issue. The Judicial Committee is not the final judicial authority for the determination of English law. That is the responsibility of the House of Lords in its judicial capacity. Though the Judicial Committee enjoys a greater freedom from the binding effect of precedent than does the House of Lords, it is in no position on a question of English law to invoke the Practice Statement (Judicial Precedent) [1966] 1 WLR 1234 of July 1966 pursuant to which the House has assumed the power to depart in certain circumstances from a previous decision of the House. And their Lordships note, in passing, the Statement’s warning against the danger from a House of Lords’ decision in a case where, by reason of custom, statute, or for other reasons peculiar to the jurisdiction where the matter in dispute arose, the Judicial Committee is required to determine whether English law should or should not apply. Only if it be decided or accepted (as in this case) that English law is the law to be applied will the Judicial Committee consider itself bound to follow a House of Lords’ decision.’

Lord Scarman
[1985] 2 All ER 947, [1985] 2 Lloyds Rep 313, [1985] 3 WLR 317, [1986] AC 80, [1985] UKPC 22
Bailii
England and Wales
Citing:
CitedLiverpool City Council v Irwin HL 31-Mar-1976
The House found it to be an implied term of a tenancy agreement that the lessor was to be responsible for repairing and lighting the common parts of the building of which the premises formed part. In analysing the different types of contract case in . .

Cited by:
CitedYorkshire Bank plc v Lloyds Bank plc CA 12-May-1999
A customer of the plaintiff, sent a cheque to the defendant, with an application for shares. The cheque was stolen whilst in the defendant’s custody, but the plaintiff at first debited the account, then re-credited the balance. The claim failed . .
CitedSandra Estelle Fielding v The Royal Bank of Scotland Plc CA 11-Feb-2004
The husband and wife had signed a bank mandate allowing the bank to act upon the authorisation of either of them. The wife complained that the bank should not be able to recover from her any sums expended by the husband.
Held: The mandate . .
CitedJames, Regina v; Regina v Karimi CACD 25-Jan-2006
The defendants appealed their convictions for murder, saying that the court had not properly guided the jury on provocation. The court was faced with apparently conflicting decision of the House of Lords (Smith) and the Privy Council (Holley).
CitedDonington Park Leisure Ltd v Wheatcroft and Son Ltd ChD 7-Apr-2006
Leave to apply was pursued under the provisions of a Tomlin order. The parties had disputed the extent to which parts of the order should be exhibited to the court.
Held: The Tomlin order should be amended to add terms necessary to give effect . .
CitedBlackpool and Fylde Aero Club Ltd v Blackpool Borough Council CA 25-May-1990
The club had enjoyed a concession from the council to operate pleasure flights from the airport operated by the council. They were invited to bid for a new concession subject to strict tender rules. They submitted the highest bid on time, but the . .
See AlsoTai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd PC 5-Feb-1986
(Hong Kong) The Boad considered the costs payable for counsel on an appeal to the Board from Hong Kong . .
CitedWillers v Joyce and Another (Re: Gubay (Deceased) No 2) SC 20-Jul-2016
The Court was asked whether and in what circumstances a lower court may follow a decision of the Privy Council which has reached a different conclusion from that of the House of Lords (or the Supreme Court or Court of Appeal) on an earlier occasion. . .

Lists of cited by and citing cases may be incomplete.

Constitutional, Banking

Leading Case

Updated: 01 November 2021; Ref: scu.238119

Ladbroke and Co v Todd: 1914

The plaintiff had drawn a cheque and sent it to the payee by post. The letter was stolen and the thief took it to the defendant, a banker, and used it to open an account. In doing so, he forged the payee’s endorsement. The defendant believed him to be the payee. He was not introduced to the bank and no references were obtained. The defendant opened the account and the cheque was specially cleared at the request of the thief, and he drew out the proceeds on the next day. On discovering the fraud, the plaintiff brought an action against the defendant for conversion. One question raised was whether the account having been opened by payment in all the cheques to be collected the defendant could be properly regarded as having received payment for a customer.
Held: Since the account had already been opened when the cheque was collected, payment had been received for a customer. The drawer thereupon sent another cheque to the real payee and took an assignment of his rights in the stolen cheque and, as holders of the cheque or alternatively as assignees, brought an action against the bank to recover the proceeds collected by the bank as money had and received to their use. Evidence had been given that it was the general practice of bankers to obtain a satisfactory introduction or reference.
The banker had acted in good faith, but was guilty of negligence in not taking reasonable precautions to safeguard the interests of the true owner of the cheque and that therefore he had put himself outside the protection of Section 82 of the 1882 Act. The banker would have been entitled to the protection of the section as having received payment for a customer, but had lost it owing to his want of due care. The relation of banker and customer began as soon as the first cheque was handed in to the banker for collection, and not when it was paid.

Bailhache J
(1914) 30 TLR 433, (1914) 111 LT 43, (1914) 19 Com Cas 256
Bills of Exchange Act 1882 82
England and Wales

Banking

Leading Case

Updated: 01 November 2021; Ref: scu.514413

K Ltd v National Westminster Bank Plc and others: CA 19 Jul 2006

The bank had declined to act upon a customer’s instructions, reporting its suspicions of criminal activity to the police. Permission was given to proceed but only after a delay. The claimant customer sought its costs.
Held: The customer’s appeal failed. Parliament had laid down a proper procedure and the bank had followed it: ‘if a statute renders the performance of a contract illegal, the contract is frustrated and both sides are discharged from further performance. In a case, however, where a statute makes it temporarily illegal to perform the contract, the contract will only be suspended until the illegality is removed. That still means that, during the suspension, no legal right exists on which any claim to an injunction must depend. ‘ and ‘Parliament has struck a precise and workable balance of conflicting interests in the 2002 Act. It is, of course, true that to intervene between a banker and his customer in the performance of the contract of mandate is a serious interference with the free flow of trade. But Parliament has considered that a limited interference is to be tolerated in preference to allowing the undoubted evil of money-laundering to run rife in the commercial community.’

[2006] EWCA Civ 1039, Times 27-Jul-2006, [2007] 1 WLR 311, [2007] Bus LR 26
Bailii
Proceeds of Crime Act 2002 328
England and Wales
Citing:
CitedBank of Scotland v A Ltd and Others (Serious Fraud Office, Interested Party) CA 6-Feb-2001
A bank, having been informed that the activities of a customer involved money laundering, found itself in a position where, if it paid out the funds, it would face conviction, but if it failed to do so, it be found to be involved in tipping off the . .
CitedDa Silva, Regina v CACD 11-Jul-2006
The defendant appealed her conviction for assisting another to retain the proceeds of crime. The court considered what was meant by ‘suspicion’.
Held: For a defendant to be convicted of an offence under section 93A(1)(a) of the 1988 Act, he or . .
CitedAmalgamated Metal Trading Ltd v City of London Police Financial Investigation Unit and others ComC 3-Apr-2003
The company provided trading services in financial futures. They became concerned as to the integrity of their client, and its relationship with shareholders and other companies where parties came to be arrested for fraud in the US. They sought a . .
CitedNew Bridge Holdings v Barclays Bank 10-Feb-2006
The court suggested as a way of dealing with problems under the Act that attempts should be made: ‘to provide for some procedure whereby the arbitrary and capricious exercise of power should be prevented by the court being told, in confidence by the . .
CitedAshingdane v The United Kingdom ECHR 28-May-1985
The right of access to the courts is not absolute but may be subject to limitations. These are permitted by implication since the right of access ‘by its very nature calls for regulation by the State, regulation which may vary in time and place . .
See AlsoK Ltd v National Westminster Bank Plc and Another CA 22-May-2006
Application by respondent bank for security for costs. . .

Cited by:
CitedShah and Another v HSBC Private Bank (UK) Ltd QBD 26-Jan-2009
The claimants sought damages after delays by the bank in processing transfer requests. The bank said that the delays were made pending reports of suspected criminal activity. The bank’s delay had stigmatised the claimant causing further losses. The . .
CitedShah and Another v HSBC Private Bank (UK) Ltd CA 4-Feb-2010
Money laundering suspicion to be explained
The customer sought to sue his bank for failing to meet his cheque. The bank sought to rely on the 2002 Act, having reported suspicious activity on freezing the account. He now appealed against summary judgment given for the bank which had refused . .

Lists of cited by and citing cases may be incomplete.

Banking, Crime

Updated: 01 November 2021; Ref: scu.243324

Westdeutsche Landesbank Girozentrale v Islington London Borough Council: HL 22 May 1996

Simple interest only on rate swap damages

The bank had paid money to the local authority under a contract which turned out to be ultra vires and void. The question was whether, in addition to ordering the repayment of the money to the bank on unjust enrichment principles, the court could also award compound interest. It was clear law that the court had power to do so in the case of a breach of trust.
Held: Simple interest only was payable on a debt payable for an interest rate swap agreement which had been avoided as ultra vires the council’s powers. The failure of the swap agreement did not place the authority under any fiduciary duty to the claimants. A finding to that effect would create equitable interests with uncertain consequences for others. Accordingly simple interest only was payable. Parliament had made its intentions clear and it was not for the courts to create new situations in which compound interest would be awarded. ‘Although it is difficult to find clear authority for the proposition, when property has been obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and traceable in equity.’ An innocent recipient of property wrongfully obtained does not become a constructive trustee of it until receipt of knowledge of the claim in equity of the true owner.
HL Lord Goff said: ‘Claims in restitution are founded upon a principle of justice, being designed to prevent the unjust enrichment of the defendant: see Lipkin Gorman v Karpnale Ltd. [1991] 2 A.C. 548. Long ago, in Moses v Macferlan (1760) 2 Burr. 1005, 1012, Lord Mansfield C.J. said that the gist of the action for money had and received is that ‘the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money’. It would be strange indeed if the courts lacked jurisdiction in such a case to ensure that justice could be fully achieved by means of an award of compound interest, where it is appropriate to make such an award, despite the fact that the jurisdiction to award such interest is itself said to rest upon the demands of justice. I am glad not to be forced to hold that English law is so inadequate as to be incapable of achieving such a result. In my opinion the jurisdiction should now be made available, as justice requires, in cases of restitution, to ensure that full justice can be done. The seed is there, but the growth has hitherto been confined within a small area. That growth should now be permitted to spread naturally elsewhere within this newly recognised branch of the law. No genetic engineering is required, only that the warm sun of judicial creativity should exercise its benign influence rather than remain hidden behind the dark clouds of legal history.’
Lord Browne-Wilkinson said (obiter): ‘The argument for a resulting trust was said to be supported by the case of a thief who steals a bag of coins. At law those coins remain traceable only so long as they are kept separate: as soon as they are mixed with other coins or paid into a mixed bank account they cease to be traceable at law. Can it really be the case, it is asked, that in such circumstances the thief cannot be required to disgorge the property which, in equity, represents the stolen coins? Moneys can only be traced in equity if there has been at some stage a breach of fiduciary duty, i.e. if either before the theft there was an equitable proprietary interest (e.g. the coins were stolen trust moneys) or such interest arises under a resulting trust at the time of the theft or the mixing of the moneys. Therefore, it is said, a resulting trust must arise either at the time of the theft or when the moneys are subsequently mixed. Unless this is the law, there will be no right to recover the assets representing the stolen moneys once the moneys have become mixed.
I agree that the stolen moneys are traceable in equity. But the proprietary interest which equity is enforcing in such circumstances arises under a constructive, not a resulting, trust. Although it is difficult to find clear authority for the proposition, when property is obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and traceable in equity. Thus, an infant who has obtained property by fraud is bound in equity to restore it: Stocks v. Wilson [1913] 2 K.B. 235, 244; R. Leslie Ltd. v. Sheill [1914] 3 K.B. 607. Moneys stolen from a bank account can be traced in equity: Bankers Trust Co. v. Shapira [1980] 1 W.L.R. 1274, 1282C-E: see also McCormick v. Grogan (1869) L.R. 4 H.L. 82, 97′.
Lord Browne-Wilkinson explained the differences between institutional and remedial constructive trusts: ‘Under an institutional constructive trust, the trust arises by operation of law as from the date of the circumstances which give rise to it: the function of the court is merely to declare that such trust has arisen in the past. The consequences that flow from such trust having arisen (including the possibly unfair consequences to third parties who in the interim have received the trust property) are also determined by rules of law, not under a discretion. A remedial constructive trust, as I understand it, is different. It is a judicial remedy giving rise to an enforceable equitable obligation: the extent to which it operates retrospectively to the prejudice of third parties lies in the discretion of the court.’

Lord Browne-Wilkinson, Lord Goff, Lord Woolf
Times 30-May-1996, [1996] 2 All ER 961, [1996] 2 AC 669, [1996] UKHL 12, [1996] 2 WLR 802, [1996] 5 Bank LR 341
Bailii
England and Wales
Citing:
Appeal fromWestdeutsche Landesbank Girozentrale v Islington London Borough Council CA 30-Dec-1993
A bank paid money to a local authority under an interest rate swap agreement, which was held later to be outside the local authority’s powers.
Held: The local authority was to repay the money paid to it for an ultra vires purpose (a swap . .
CitedBurdick v Garrick HL 1870
In the courts of Chancery, the statute of limitations would not apply when the person in a confidential relationship had got the property into his hands. A court presumes against the party against whom relief is sought that he has made that profit . .
CitedWallersteiner v Moir (No 2) CA 1975
The court was asked whether Moir would be entitled to legal aid to bring a derivative action on behalf of a company against its majority shareholder.
Held: A minority shareholder bringing a derivative action on behalf of a company could obtain . .
AppliedHazell v Hammersmith and Fulham London Borough Council HL 1991
Swap deals outwith Council powers
The authority entered into interest rate swap deals to protect itself against adverse money market movements. They began to lose substantial amounts when interest rates rose, and the district auditor sought a declaration that the contracts were . .

Cited by:
CitedSmithkline Beecham Plc Glaxosmithkline UK Ltd and Another v Apotex Europe Ltd and others (No 2) CA 23-May-2006
The parties to the action had given cross undertakings to support the grant of an interim injunction. A third party subsequently applied to be joined, and now sought to take advantage of the cross undertakings to claim the losses incurred through . .
CitedIslamic Republic of Pakistan v Zardari and others ComC 6-Oct-2006
The claimant alleged that the defendants had funded the purchase of various properties by secret and unlawful commissions taken by them whilst in power in Pakistan. They sought to recover the proceeds. They now sought permission to serve proceedings . .
CitedStack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
CitedBryce Ashworth v Newnote Ltd CA 27-Jul-2007
The appellant challenged a refusal to set aside a statutory demand, in respect of his director’s loan account with the respondent company, saying the court should have accepted other accounts to set off against that debt.
Held: A statutory . .
CitedSempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
CitedKommune and Another v DEPFA Acs Bank ComC 4-Sep-2009
Local authorities in Denmark sought to recover sums paid to the defendant banks for swap trading, saying that the payments had been outwith their powers. . .
CitedClarence House Ltd v National Westminster Bank Plc CA 8-Dec-2009
The defendant tenants, anticipating that the landlord might delay or refuse consent to a subletting entered into a ‘virtual assignment’ of the lease, an assignment in everything but the deed and with no registration. The lease contained a standard . .
CitedTwentieth Century Fox Film Corp and Others v Harris and Others ChD 5-Feb-2013
The court was asked whether a copyright owner has a proprietary claim to money derived from infringement of the copyright.
Held: He did not. No such argument could be shown to have suceeded before. . .
CitedPindell v AirAsia CA 2011
Tomlinson LJ drew attention to the danger of attempting to draw parallels between an aircraft operating (dry) lease and some other more commonly litigated superficially similar instruments such as time charters of ships, where the legal incidents . .
CitedOlympic Airlines Sa v ACG Acquisition XX Llc CA 17-Apr-2013
The parties disputed their mutual obligations under aircraft leasing agreements. The insolvent airline said that in signing to accept the condition of the aircraft on delivery, it had not created an estoppel against itself when the aircraft later . .
CitedBailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
CitedFilby v Mortgage Express (No 2) Limited CA 22-Jun-2004
Mr and Mrs Filby’s matrimonial home was charged to the Halifax. They also had an unsecured loan with the Midland Bank. Mr Filby sought to remortgage the matrimonial home with Mortgage Express. The mortgage advance was paid to solicitors who used . .
CitedAkers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Obiter comments doubtedShalson and others v Russo and others ChD 11-Jul-2003
Rimer J doubted obiter comments of Lord Brown-Wilkinson: ‘I do not find that an easy passage. As to the first paragraph, a thief ordinarily acquires no property in what he steals and cannot give a title to it even to a good faith purchaser: both the . .
CitedScott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .
CitedPrudential Assurance Company Ltd v Revenue and Customs SC 25-Jul-2018
PAC sought to recover excess advance corporation tax paid under a UK system contrary to EU law. It was now agreed that some was repayable but now the quantum. Five issues separated the parties.
Issue I: does EU law require the tax credit to be . .
CitedFetch.AI Ltd and Another v Persons Unknown Category A and Others ComC 15-Jul-2021
Cryptocurrency Action
The claimants sought damages and other remedies saying that the unknown defendants had obtained access to the private key guarding their crypto currency assets, and then sold them at an undervalue, acquiring substantial profits for themselves in . .

Lists of cited by and citing cases may be incomplete.

Banking, Local Government, Equity

Leading Case

Updated: 01 November 2021; Ref: scu.90405

Crockfords Club Ltd v Mehta: CA 8 Jan 1992

The Defendant had gambled at the plaintiff’s casino, using cheques drawn on a company to obtain chips, all of which he lost. The cheques not having been honoured, Crockfords sued the Defendant for repayment of the loan made to him on the issue of the chips, and applied for summary judgment. At first instance, Henry J held that the cheques had been accepted in conditional repayment of the loan, so that on dishonour of the cheques, the Defendant remained liable on the loan. He then held that, just as section 16(2) and (4) validated the cheques, so they validated the underlying loan.
Held: A cheque which had been given in exchange for gaming tokens which complied with the Act was to be enforced as would be any other cheque. The use of such tokens was regulated and supported by the law. No new sub-species of contract was created by the Act.
Lloyd LJ said: ‘The legislative purpose of section 16 of the 1968 Act was to discourage gaming on credit. But consistently with that overall objective Parliament had to allow machinery for enabling lawful gaming to take place at licensed clubs. Otherwise those taking part in the gaming would have had to bring their own cash. The solution adopted was a neat one, and is to be found in section 16(1) and (2). Provided the cheque meets the requirements of subsection (2) and subsection (3), the giving of cash or tokens in exchange for the cheque does not contravene subsection (1).
The error in Mr Glick’s argument is to treat section 16(2) as if it only validated the cheque. It does more than that. It validates the whole transaction. Subsection (1) is subject to subsection (2). Subsection (2) provides that the transaction-that is to say the giving of the cash or tokens in exchange for the cheque-shall not contravene section 16(1). Provided the cheque complies with subsections (2) and (3) there is nothing in subsection (1) to prohibit the underlying loan.
What then was the purpose of section 16(4)? The explanation, like so much else in our law, is historical. The old legislation did not make loans for lawful gaming illegal. The Act of 1710 is concerned with securities. It provides that all securities for repaying money knowingly lent for gaming should be ‘utterly void frustrate and of none effect to all intents and purposes whatsoever’. But this was found to work injustice on an innocent holder for value-that is to say a third party to whom the security may have been negotiated without notice. So 125 years later, by the Act of 1835, Parliament amended the law so as to provide that the security should not be void, but should be deemed to have been given for an illegal consideration. Nothing in either Act affects the underlying loan.
The subsequent history is traced in CHT Ltd v Ward [1965] 2 QB 63. It was argued that it would be absurd to invalidate the security but to leave the contract of loan unaffected. That cannot have been Parliament’s intention. This argument was accepted by the Divisional Court in Carlton Hall Club Ltd v Laurence best reported in 98 LJKB 305. It was held that the consideration for the security which was deemed to be illegal as between immediate parties under the Act of 1835 tainted the loan itself.
It was to prevent this line of argument being resurrected that Parliament found it necessary, or at any rate desirable, to enact section 16(4). The source of the taint has now been removed. There is no longer, therefore, any basis for the argument that the underlying loan is illegal or unenforceable. Indeed, to turn the argument the other way, it would surely be absurd to hold that Parliament had, by the Act of 1968, made the cheque enforceable, but made it a criminal offence to enter into the underlying contract of loan.’

Lloyd LJ
Gazette 08-Jan-1992, [1992] 1 WLR 355
Gaming Act 1968 16
England and Wales
Cited by:
CitedAspinall’s Club Ltd v Al-Zayat CA 19-Oct-2007
The claimant had sued the defendant for non-payment under a cheque for andpound;2 million. The cheque had been issued to replace earlier cheques given but not met, for sums staked for gambling at the claimant’s casino. The defendant said that the . .
CitedGrosvenor Casinos Ltd v National Bank of Abu Dhabi ComC 17-Mar-2008
Banker’s reference no guarantee
An Arab businessman lost pounds 18m at the claimant casino, and wrote scrip cheques against his account with the defendant. The claimant obtained judgment, but being unable to enforce that judgment pursued his bank. The club had used a system where . .
CitedThe Ritz Hotel Casino Ltd v Al Daher QBD 15-Aug-2014
The claimant sought to recover andpound;1m on unpaid cheques. The cheques represented half of the sum gambled away by the defendant in one evening. She now alleged that the claimant had not complied with its duties under the 2005 Act to act . .

Lists of cited by and citing cases may be incomplete.

Contract, Banking

Leading Case

Updated: 01 November 2021; Ref: scu.79676

Ledra Advertising v Commission and ECB: ECJ 20 Sep 2016

European Stability Mechanism – Constitutional?

ECJ (Judgment) Appeals – Stability support programme for the Republic of Cyprus – Memorandum of Understanding of 26 April 2013 on Specific Economic Policy Conditionality concluded between the Republic of Cyprus and the European Stability Mechanism (ESM) – Duties of the European Commission and the European Central Bank – Non-contractual liability of the European Union – Second paragraph of Article 340 TFEU – Conditions – Obligation to ensure that the Memorandum of Understanding is consistent with EU law

ECLI:EU:C:2016:701, [2016] EUECJ C-8/15
Bailii
European

European, Banking

Updated: 01 November 2021; Ref: scu.569513

Uzinterimpex JSC v Standard Bank Plc: ComC 15 May 2007

The court considered the liability of a bank under its guarantee of a transaction. The court set out the elements of the tort of deceit: (a) The defendant must have made a representation which can be clearly identified.
(b) It must be a representation of fact.
(c) The representation must be false.
(d) It must have been made dishonestly in the sense that the representor has no real belief in the truth of what he states: this involves conscious knowledge of the falsity of the statement.
(e) The statement must have been intended to be relied upon.
(f) It must have in fact been relied upon: see Derry v Peek (1889) 14 App Cas 337, Angus v Clifford [1891] 2 Ch 449, Armstrong v Strain [1951] 1 TLR 856, The Kriti Palm [2007] 1 Lloyd’s Rep 555.
In addition, all the elements must be established by reference to the heightened burden of proof as discussed in Hornal v Neuberger Products Ltd [1954] 1 QB 247, Re H (Minors) [1996] AC 563.’

David Steel J
[2007] EWHC 1151 (Comm), [2007] 2 Lloyd’s Rep 187
Bailii
England and Wales
Cited by:
CitedGrosvenor Casinos Ltd v National Bank of Abu Dhabi ComC 17-Mar-2008
Banker’s reference no guarantee
An Arab businessman lost pounds 18m at the claimant casino, and wrote scrip cheques against his account with the defendant. The claimant obtained judgment, but being unable to enforce that judgment pursued his bank. The club had used a system where . .
Appeal fromUzinterimpex JSC v Standard Bank Plc CA 15-Jul-2008
The parties disputed the result of a contract for the purchase of cotton with the contract underwritten by a bank.
Held: After the breach of the contract, the claimant had failed properly to mitigate his losses. That failure in turn itself . .

Lists of cited by and citing cases may be incomplete.

Banking, Torts – Other

Leading Case

Updated: 31 October 2021; Ref: scu.252331

Barclays Bank Plc v O’Brien and Another: HL 21 Oct 1993

The wife joined in a charge on the family home to secure her husband’s business borrowings. The husband was found to have misrepresented to her the effect of the deed, and the bank had been aware that she might be reluctant to sign the deed.
Held: The charge was not to be enforced. The bank was under constructive notice, and ought to have known of the undue influence of the husband. The security was obtained by undue influence or misrepresentation. The House set a low level for the threshold which must be crossed before a bank is put on inquiry.
Lord Browne-Wilkinson: ‘Therefore in my judgment a creditor is put on inquiry when a wife offers to stand surety for her husband’s debts by the combination of two factors: (a) the transaction is on its face not to the financial advantage of the wife; and (b) there is a substantial risk in transactions of that kind that, in procuring the wife to act as surety, the husband has committed a legal or equitable wrong that entitles the wife to set aside the transaction.’ Unconscionable conduct is ‘ some other legal wrong’. ‘if the doctrine of notice is properly applied, there is no need for the introduction of a special equity in these types of cases. A wife who has been induced to stand as a surety 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 party’s agent or the third party had actual or constructive notice of the facts giving rise to her equity. Although there may be cases where, without artificiality, it can properly be held that the husband was acting as the agent of the creditor in procuring the wife to stand as surety, such cases will be of very rare occurrence. The key to the problem is to identify the circumstances in which the creditor will be taken to have had notice of the wife’s equity to set aside the transaction. 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).’

Lord Templeman, Lord Lowry, Lord Browne-Wilkinson, Lord Slynn of Hadley and Lord Woolf
Gazette 17-Dec-1993, Times 22-Oct-1993, Independent 22-Oct-1993, [1993] 3 WLR 786, [1994] 1 AC 180, [1993] 4 All ER 417, [1993] UKHL 6
Bailii
England and Wales
Citing:
CitedAvon Finance Co Ltd v Bridger CA 1985
The son arranged finance for his parents to move near to him. He borrowed money to help finance it, secured by an expensive second loan. He deceived his parents into executing the loan. After the son defaulted, the plaintiff sought possession.
CitedBainbrigge v Browne ChD 1881
Bainbrigge_BrowneChD1881
An impoverished father had prevailed upon his inexperienced children to charge their reversionary interests under their parents’ marriage settlement to pay his mortgage debts. Undue influence was claimed.
Held: The defendants who were not . .
CitedBank of Credit and Commerce International SA v Aboody CA 1989
In a case where the defendant said that a mortgage had been signed from undue pressure the court may find actual undue influence as opposed to presumed undue influence. Slade LJ said: ‘Ever since the judgments of this court in Allcard v Skinner a . .
CitedBank of Montreal v Stuart PC 1911
The court used the phrase ‘immoderate and irrational’ to describe the character of a transaction which might of its nature suggest undue influence. A solicitor who is advising a client about a transaction and has reason to suspect that the client is . .
CitedBank of Victoria Ltd v Mueller 1925
Cussen J opined that a wife was entitled to relief from a guarantee granted to the bank undertaken under pressure from her husband where amongst other matters it could be shown: ‘that the husband in procuring and pressing for such consent . .
CitedBischoff’s Trustee v Frank 1903
. .
CitedCIBC Mortgages Plc v Pitt and Another HL 21-Oct-1993
Mrs Pitt resisted an order for possession of the house saying that she had signed the mortgage only after misrepresentations by and the undue infuence of her husband who was acting as the bank’s agent.
Held: A bank was not put on enquiry as to . .
CitedColdunell Ltd v Gallon CA 1986
Even in the absence of agency, if the debtor has been guilty of undue influence or misrepresentation in securing the giving of security by a third party to cover his debt to the creditor, the creditor may not be able to enforce the surety contract . .
CitedGrigby v Cox 1750
The court considered a claim that the husband had exercised undue influence over his wife.
Held: The court rejected any presumption of undue influence, and said that a court of equity ‘will have more jealousy’ over dispositions by a wife to a . .
CitedHoghton v Hoghton CA 16-Apr-1852
When a person has made a large voluntary disposition the burden is thrown on the party benefitting to show that the disposition was made fairly and honestly and in full understanding of the nature and consequences of the transaction. Romilly MR . .
CitedHowes v Bishop 1909
The relationship of husband and wife does not bring a case within Class 2(A). . .
CitedKings North Trust Ltd v Bell CA 1986
The wife claimed to have signed a legal charge in favour of the plaintiffs by virtue of her husband’s fraudulent misrepresentation. The charge secured the business borrowings of the husband. She did not get independent advice.
Held: The bank . .
CitedMidland Bank Plc v Shephard CA 1988
Setting aside of bank’s charge where execution by a third party to secure the creditors debt had been secured by the creditors misrepresentation of the charge. . .
CitedTurnbull and Co v Duval PC 1902
Mr Duval owed three separate sums to a firm Turnbull and Co including andpound;1,000 owed to the Jamaican branch for beer. Turnbulls’ manager and agent in Jamaica was a Mr Campbell. Mr Campbell was also an executor and trustee of a will under which . .
CitedYerkey v Jones 1939
The relationship of husband and wife is not enough of itself to raise a presumption of undue influence. The Court of Chancery was not blind to the opportunities of obtaining and unfairly using influence over a wife which the husband often possesses. . .
Appeal fromBarclays Bank Plc v O’Brien and Another CA 22-May-1992
A bank leaving a husband to explain a proposed charge over the matrimonial home to his wife to secure his business debts, could not enforce that charge against her. There was a presumption of undue influence in the husband which made the charge . .

Cited by:
CitedCooke v National Westminster Bank Plc; Waldron Wetherell and Co CA 17-Jun-1998
Where a bank had failed to require the solicitors witnessing a wife’s signature to a guarantee, to write to confirm that she had received independent advice, and there had been undue influence, they were deemed to be on notice of such influence. . .
CitedRoyal Bank of Scotland v Etridge, Loftus and Another v Etridge and Another, Etridge v Pritchard Englefield (Merged With Robert Gore and Co ) Midland Bank Plc v Wallace and Another (No 2) CA 31-Jul-1998
Detailed guidance was given on the quality of independent legal advice, which would be required to be given to wives signing charges to secure their husbands’ business etc accounts on the matrimonial home. The interaction of legal advice and . .
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .
CitedGovernor and Company of Bank of Scotland v Bennett and Another CA 21-Dec-1998
The bank appealed an order setting aside a deed of guarantee and mortgage and denying the possession order sought. The guarantee had been given to support borrowings of the defendant’s company. The defendant was the wife of the director and had been . .
CitedPortman Building Society v Dusangh and Others CA 19-Apr-2000
The defendant sought to set aside an order for possession under a mortgage.
Held: Where a case was strong enough on its face in terms of conduct and terms, unconscionable conduct could be inferred if there was no explanation offered to . .
CitedUCB Group Ltd v Hedworth CA 4-Dec-2003
The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled . .
CitedNiersmans v Pesticcio CA 1-Apr-2004
A house have been given by a man with learning difficulties to her sister. The case appealed an order that undue influence had applied.
Held: The gift failed despite the attempt at independent legal advice. The court reviewed the law of undue . .
CitedBarclays Bank Plc v Boulter and Another HL 26-Oct-1999
The question of whether notice of certain facts amounted to constructive notice of other facts is a question of law. Where it was claimed that a party should be exempt from liability under a document which it was claimed was signed because of . .
CitedScotlife Home Loans (No 2) Limited v Melinek and Melinek CA 9-Sep-1997
The second defendant sought leave to appeal against a possession order obtained by the claimant. The loan obtained had been misapplied by the first defendant, her husband. She had been advised in the transaction by his partner in their solicitors’ . .
CitedR Griggs Group Ltd and others v Evans and others (No 2) ChD 12-May-2004
A logo had been created for the claimants, by an independent sub-contractor. They sought assignment of their legal title, but, knowing of the claimant’s interest the copyright was assigned to a third party out of the jurisdiction. The claimant . .
CitedRandall v Randall ChD 30-Jul-2004
The executor sought to set aside gifts made by the deceased, an elderly aunt before her death to his brother, alleging undue influence.
Held: The recipient had acted falsely in failing to declare overpayments of benefits. The deceased had been . .
CitedForsdike v Forsdike CA 21-Feb-1997
The claimant appealed dismissal of his claim to set aside a transfer by way of gift by his father on the basis of an alleged undue influence.
Held: The judges was entitled to make the findings he had done, and to be impressed by the spacing of . .
CitedInvestors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
CitedGreene King Plc v Stanley and others CA 30-Nov-2001
The claimant challenged an order that the two defendant chargors were discharged from liability to the claimants under their individual voluntary arrangement and on the basis that it had been entered under undue influence. . .

Lists of cited by and citing cases may be incomplete.

Undue Influence, Banking

Leading Case

Updated: 31 October 2021; Ref: scu.78210

HFO Capital Ltd v Wegmuller: Misc 24 Jan 2012

‘claim brought by the claimant for monies allegedly owed by the defendant under a credit agreement regulated by the Consumer Credit Act 1974. It is claimed that the credit agreement was made between Barclaycard and the defendant in about June 2006. It involved the provision of a credit card by Barclaycard to the defendant.!

[2012] EW Misc 19 (CC)
Bailii
Consumer Credit Act 1974

Banking, Consumer

Updated: 31 October 2021; Ref: scu.510048

Philips (Hong Kong) Ltd v The Attorney General of Hong Kong: PC 9 Feb 1993

After referring to two Australian cases on penalty clauses in contracts: ‘These statements assist by making it clear that the court should not adopt an approach to provisions as to liquidated damages which could, as indicated earlier, defeat their purpose. Except possibly in the case of situations where one of the parties to the contract is able to dominate the other as to the choice of the terms of a contract, it will normally be insufficient to establish that a provision is objectionably penal to identify situations where the application of the provision could result in a larger sum being recovered by the injured party than his actual loss. Even in such situations so long as the sum payable in the event of non-compliance with the contract is not extravagant, having regard to the range of losses that it could reasonably be anticipated it would have to cover at the time the contract was made, it can still be a genuine pre-estimate of the loss that would be suffered and so a perfectly valid liquidated damage provision.’ but ‘A difficulty can arise where the range of possible loss is broad. Where it should be obvious that, in relation to part of the range, the liquidated damages are totally out of proportion to certain of the losses which may be incurred, the failure to make special provision for those losses may result in the ‘liquidated damages’ not being recoverable.’
The Board considered the nature of penalty clauses. The ‘court should not be astute to descry a ‘penalty clause” and emphasised that it would ‘normally be insufficient . . to identify situations where the application of the provision could result in a larger sum being recovered by the injured party than his actual loss’. However ‘A difficulty can arise where the range of possible loss is broad. Where it should be obvious that, in relation to part of the range, the liquidated damages are totally out of proportion to certain of the losses which may be incurred, the failure to make special provision for those losses may result in the ‘liquidated damages’ not being recoverable. (See the decision of the Court of Appeal on very special facts in Ariston SRL v Charly Records Ltd (1990) The Independent 13 April 1990.) However, the court has to be careful not to set too stringent a standard and bear in mind that what the parties have agreed should normally be upheld. Any other approach will lead to undesirable uncertainty especially in commercial contracts.’
Lord Woolf said: ‘the court has to be careful not to set too stringent a standard and bear in mind that what the parties have agreed should normally be upheld’, not least because ‘[a]ny other approach will lead to undesirable uncertainty especially in commercial contracts’.
Lord Woolf
(1993) 61 BLR 49, [1993] UKPC 3, (1993) 9 Const LJ 202
Bailii
Commonwealth
Citing:
AffirmedDunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd HL 1-Jul-1914
The appellants contracted through an agent to supply tyres. The respondents contracted not to do certain things, and in case of breach concluded: ‘We agree to pay to the Dunlop Pneumatic Tyre Company, Ltd. the sum of 5 l. for each and every tyre, . .
CitedAMEV-UDC Finance Ltd v Austin 1986
High Court of Australia – Contract – Damages – Penalty – Agreement for hire of chattel – Failure to pay instalments of hire – Termination by owner pursuant to contractual power – Damages – Instalments due but unpaid – Damages for loss of . .
CitedEsanda Finance Corporation Ltd v Plessnig 1989
(Australia) . .
CitedAriston SRL v Charly Records Ltd 13-Apr-1990
Penalty Clauses . .

Cited by:
CitedDuffen v Fra Bo Spa CA 30-Apr-1998
The plaintiff had been appointed as an exclusive sales agent for the defendant for a minimum period of four years. The defendants terminated it eighteen months early claiming fraudulent misrepresentation.
Held: The clause setting the damages . .
CitedCine Bes Filmcilik Ve Yapimcilik and Another v United International Pictures and Others CA 21-Nov-2003
The parties entered into agreements licensing the exclusive distribution of encrypted television channels within Turkey. A clause provided a calculation of damages for a breach amounting to the balance of licence fees due, and other penalties, . .
CitedJeancharm Ltd (T/A Beaver International) v Barnet Football Club Ltd CA 16-Jan-2002
The claimant contracted to supply football shirts to the defendant, but claimed that clauses in the contract with regards to late delivery and payment operated as penalties and so were void at common law.
Held: The sums set out were immodest . .
CitedTullett Prebon Group Ltd v El-Hajjali QBD 31-Jul-2008
The defendant signed an employment contract to join the claimants as a senior broker. He changed his mind and decided to stay in his existing job. The new employers sued for breach of contract. The defendant said that the claimants had refused to . .
CitedCavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
CitedWright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd ChD 6-Mar-2018
IVA is a special form of contract
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on . .

Lists of cited by and citing cases may be incomplete.
Updated: 14 October 2021; Ref: scu.197033

Barnett-Waddington Trustees (1980) Ltd and Others v The Royal Bank of Scotland Plc: ChD 12 Apr 2017

Second set of proceedings about a secured loan given to the claimants by the defendant bank. The bank, had discovered an external back to back swap (i.e. with an external counterparty), and asserted that it would be entitled to add the costs of unwinding that swap to the redemption charges. The claimants now said that the bank could no longer make that claim because it is res judicata (as they describe the point) in the sense that it ought to have been raised and dealt with in the first proceedings but was not.
Held: Following the first set of proceedings between the same parties over the same subject matter (a secured loan given to the claimants by the defendant bank), the defendant bank was not entitled to rely on an ‘external swap’ in a second set of proceedings, because to advance such a claim would have been an abuse of process within Johnson v Gore Wood.
Mann J underlined, the point made by Lord Bingham in Johnson v Gore Wood regarding the general applicability of the doctrine of abuse of process to both sides in litigation. After citing Lord Bingham’s speech, Mann J explained that: ‘I have emphasised words which make it plain that the doctrine of abuse involved is capable of applying to defendants and defences as it applies to claimants and claims, though it may be less often invoked against a defendant.’
Mann J
[2017] EWHC 834 (Ch)
Bailii
England and Wales
Citing:
See AlsoBarnett Waddington Trustees (1980) Ltd and Another v The Royal Bank of Scotland Plc ChD 14-Aug-2015
Part 8 claim raising a point of construction arising out of a loan agreement.
Held: The unwinding costs of the swap transaction then before him (which was an internal bank swap) could not be added to the redemption cost. . .

Cited by:
CitedSpicer v The Commissioner of Police of The Metropolis QBD 6-Jul-2020
The claimant alleged defamation. He had been acquitted of a criminal offence and said that material published by the defendant continued to imply or assert his guilt of the offence. The defendant argued truth. The claimant now sought a strike out of . .

Lists of cited by and citing cases may be incomplete.
Updated: 12 October 2021; Ref: scu.581970

Graiseley Properties Ltd and Others v Deutsche Bank Ag and Others: CA 8 Nov 2013

These two appeals result from the distortion or manipulation of the London Inter-Bank Offered Rate (‘LIBOR’) frequently used as a reference rate in the calculation of interest in loan agreements or swap agreements. In both the current appeals banks are endeavouring to recover sums due under such agreements and the borrowers (or their guarantors) have sought permission to amend their pleadings to allege (inter alia) that the banks made implied representations as to the efficiency of or the non-manipulation of LIBOR.
Longmore, Underhill LJJ, Sir Bernard Rix
[2013] EWCA Civ 1372
Bailii
England and Wales

Updated: 08 October 2021; Ref: scu.517462

Shanning International Ltd (in liquidation) v Lloyds Bank plc Lloyds Bank plc v Rasheed Bank: HL 2 Jul 2001

Under a series of cross guarantees, equipment was supplied to Iraq. Final payment was due on delivery of the final equipment. Before it could be delivered, the prohibitions came into effect against satisfying or making any claims in connection with transactions in matters covered by the UN resolution. The company went into liquidation, and sought claims under the guarantees from the bank. The bank agreed liability if it could itself be excused liability to the Iraqi company. It was held that the intention was to create a permanent prohibition. To hold otherwise would risk reviving contractual obligations which could no longer be performed. The ban might end but prohibition on the enforcement of earlier contracts must remain.
Bingham, Steyn, Hope, Hobhouse, Scott L
Times 02-Jul-2001, Gazette 23-Aug-2001, [2001] UKHL 31, [2001] 1 WLR 1462, [2001] 3 CMLR 14
Bailii, House of Lords
Council Regulation (EEC) 3541/92
England and Wales
Citing:
Appeal fromShanning International Limited (In Liquidation) v Lloyds TSB Bank Plc (Formerly Lloyds Bank Plc) Part 20 and Rasheed Bank and Sbg Holdings Limited Part 20 CA 25-May-2000
. .
At first instanceShanning International Ltd v Lloyds TSB Bank plc; Lloyds TSB Bank plc v Rasheed Bank and another ComC 17-Dec-1999
The parties were linked together by a series of bonds, deposits, and guarantees and indemnities which had been designed to enable trade with a customer in Iraq. The Regulation operated to prevent any claim being made under the bond, and therefore . .
CitedLitster and Others v Forth Dry Dock and Engineering Co Ltd HL 16-Mar-1989
The twelve applicants had been unfairly dismissed by the transferor immediately before the transfer, and for a reason connected with the transfer under section 8(1). The question was whether the liability for unfair dismissal compensation . .
CitedWilliam Dowling v Ireland, Attorney General and Minister for Agriculture and Foods ECJ 22-Oct-1992
Europa The combined provisions of Articles 3(3) and 3a of Regulation No 857/84, as amended by Regulation No 764/89 and subsequently by Regulation No 1639/91, do not provide for any possibility of granting a . .

Lists of cited by and citing cases may be incomplete.
Updated: 03 September 2021; Ref: scu.89187

Westdeutsche Landesbank Girozentrale v Islington London Borough Council; Kleinwort Benson Ltd v Sandwell Borough Council: ChD 23 Feb 1993

A bank, having made payment under an void interest rate swap agreement to a local authority, was entitled to recover the payments made under the equitable doctrine of restitution. It would be wrong to allow the local authorities to enjoy an unjust enrichment. There had been no effective consideration given by the local authorities. ‘The application of the principle is subject to the requirement that the courts should not grant a remedy which amounts to the direct or indirect enforcement of a contract which the law requires to be treated as ineffective.’
Hobhouse J
Independent 25-Feb-1993, Times 23-Feb-1993, [1994] 4 All ER 890
England and Wales
Cited by:
Appeal fromWestdeutsche Landesbank Girozentrale v Islington London Borough Council CA 30-Dec-1993
A bank paid money to a local authority under an interest rate swap agreement, which was held later to be outside the local authority’s powers.
Held: The local authority was to repay the money paid to it for an ultra vires purpose (a swap . .
CitedYaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
CitedKleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
CitedAspect Contracts (Asbetos) Ltd v Higgins Construction Plc SC 17-Jun-2015
Aspect had claimed the return of funds paid by it to the appellant Higgins under an adjudication award in a construction contract disute. The claimant had been asked to prpare asbestos surveys and reports on maisonettes which Higgins was to acquire . .

Lists of cited by and citing cases may be incomplete.
Updated: 24 August 2021; Ref: scu.90409

Banca Nazionale Del Lavoro Spa v Playboy Club London Ltd and Others: SC 26 Jul 2018

The Playboy casino required a reference for a customer, but asked for this through a third party. The bank was not aware of the agency but gave a good reference for a customer who had never deposited any money with them and nor to whom it had issued cheques. Playboy sought damages under the reference.
Held: Playboy’s appeal failed: ‘It is impossible to feel much sympathy for BNL given the circumstances in which they came to give a favourable credit reference for some one with whom they appear to have had no relevant dealings. But they had no reason to suppose that Burlington was acting for some one else, and they knew nothing of the Playboy Club. In those circumstances, it is plain that they did not voluntarily assume any responsibility to the Club. It may well be, since they knew nothing of Burlington either, that they were indifferent to whom they were dealing with. But the fact that a representor may have been equally willing to assume a duty to some one else does not mean that he can be treated as if he had done so.’
Lady Hale, President, Lord Mance, Lord Sumption, Lord Reed, Lord Briggs
[2018] UKSC 43, [2018] LLR 657, [2019] 2 All ER 478, [2018] 1 WLR 4041, 179 Con LR 17, [2019] 1 All ER (Comm) 693, [2018] PNLR 35, [2018] WLR(D) 530
Bailii, WLRD, Bailii Summary
England and Wales
Citing:
CitedNocton v Lord Ashburton HL 1914
The defendant solicitor had persuaded his client to release a charge, thus advancing the solicitor’s own subsequent charge on the same property. The action was started in the Chancery Division of the High Court. The statement of claim alleged fraud . .
CitedCandler v Crane Christmas and Co CA 15-Dec-1950
Though the accounts of the company in which the plaintiff had invested had been carelessly prepared and gave a wholly misleading picture of the state of the company, the plaintiff could not recover damages. A false statement, carelessly, as . .
CitedHedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
CitedForsikringsaktieselskapt Vesta v Butcher HL 1988
A contract of insurance and a facultative reinsurance, under which part of the original risk was reinsured, contained warranties in identical terms.
Held: The warranty in the reinsurance policy, which was governed by English law, should be . .
CitedSteel and Another v NRAM Ltd (Formerly NRAM Plc) SC 28-Feb-2018
The appellant solicitor acted in a land transaction. The land was mortgaged to the respondent bank. She wrote to the bank stating her client’s intention to repay the whole loan. The letter was negligently mistaken and the bankers allowed the . .
CitedSmith v Eric S Bush, a firm etc HL 20-Apr-1989
In Smith, the lender instructed a valuer who knew that the buyer and mortgagee were likely to rely on his valuation alone. The valuer said his terms excluded responsibility. The mortgagor had paid an inspection fee to the building society and . .
Appeal fromPlayboy Club London Limited and Others v Banca Nazionale Del Lavoro Spa CA 18-May-2016
The club brought an action against the bank as to a reference given on behalf of a customer. They had certified him ‘good’ for 1.6m pounds, despite his having no funds in his account. . .
At QBDPlayboy Club London Ltd and Others v Banca Nazionale Del Lavoro Spa QBD 10-Jul-2014
The claimant casino alleged negligence by the defendant bank in a reference it had given for a mutual customer, leading to substantial losses. The requests was made on behalf of the claimant by a third party acting as its undisclosed agent. The . .
CitedCaparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .
CitedHenderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
CitedSiu Yin Kwan and Another v Eastern Insurance Co Ltd PC 16-Dec-1993
Insurers are liable to undisclosed principals on an indemnity policy, provided it was made with the range of their authority. The claim arose out of the death of two seamen on their employers’ vessel but the employers were not named in the relevant . .
CitedSpring v Guardian Assurance Plc and Others HL 7-Jul-1994
The plaintiff, who worked in financial services, complained of the terms of the reference given by his former employer. Having spoken of his behaviour towards members of the team, it went on: ‘his former superior has further stated he is a man of . .

Cited by:
See AlsoPlayboy Club London Ltd v Banca Nazionale Del Lavoro Spa CA 12-Sep-2018
Appeal from striking out of claim for deceit . .
See AlsoPlayboy Club London Ltd v Banca Nazionale Del Lavora Spa ComC 21-Feb-2019
. .

Lists of cited by and citing cases may be incomplete.
Updated: 11 August 2021; Ref: scu.620134

Guardians of New Zealand Superannuation Fund and Others v Novo Banco, Sa: CA 4 Nov 2016

Moore-Bick VP CA, Gloster, Sales LJJ
[2016] EWCA Civ 1092
Bailii
England and Wales
Citing:
Appeal fromGoldman Sachs International v Novo Banco Sa ComC 7-Aug-2015
. .

Cited by:
Appeal fromGoldman Sachs International v Novo Banco SA SC 4-Jul-2018
A banking facility was provided under a contract applying English law and jurisdiction. The parties now disputed whether on an assignment the dispute was to be resolved under Portuguese law.
Held: Recognition in the United Kingdom of measures . .

Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.571224

Goldman Sachs International v Novo Banco SA: SC 4 Jul 2018

A banking facility was provided under a contract applying English law and jurisdiction. The parties now disputed whether on an assignment the dispute was to be resolved under Portuguese law.
Held: Recognition in the United Kingdom of measures by a foreign Resolution Authority in accordance with its own national legislation implementing the EBRRD. Any pan-European scheme for dealing with the systemic risks of bank failures must depend for its efficacy on the widest possible recognition of a home state’s measures in other jurisdictions where banks in the course of reorganisation may have interests or assets or under whose laws it may have contracted.
Lord Sumption said: ‘I reject the proposition, which was fundamental to both the Judge’s analysis and the appellants’ case, that the effect of the August decision can be recognised without regard to the December decision. On the face of it, the December decision was not an interpretation of the August decision or an amendment of it, retrospective or otherwise. Nor was it a retransfer of a liability previously transferred to Novo Banco. It was a ruling that under the terms of article 145-H(2) of the Banking Law and paragraph (b)(i)(a) of Annexe 2 of the August decision, the Oak liability had never been transferred. But, like the courts below, I do not think that it matters what the correct analysis of the December decision is, provided that it is accepted (as it is) that as a matter of Portuguese law it is conclusive of that point unless and until annulled by a Portuguese administrative court. It follows from the agreed propositions of Portuguese law and from the requirement of article 3.2 of the Reorganisation Directive that an English court must treat the Oak liability as never having been transferred to Novo Banco. It was therefore never party to the jurisdiction clause.’
Lord Sumption, Lord Hodge, Lady Black, Lord Lloyd-Jones JJSC, Lord Mance
[2018] UKSC 34, [2018] WLR(D) 440, [2018] 2 BCLC 141, [2018] 1 WLR 3683
Bailii, WLRD, Bailii Summary
Parliament and Council Directive 2001/24/EC, Parliament and Council Directive 2014/59/EU
England and Wales
Citing:
CitedEstasis Salotti Di Colzani Aimo Et Gianmario Colzani v Ruewa Polstereimaschinen Gmbh ECJ 14-Dec-1976
ECJ The way in which article 17 of the Convention of 27 September 1968 is to be applied must be interpreted in the light of the effect of the conferment of jurisdiction by consent, which is to exclude both the . .
CitedFour Seasons Holdings Incorporated v Brownlie SC 19-Dec-2017
The claimant and her family were in a car crash while on holiday in Egypt. The claimant’s husband and his daughter died. The holiday had been booked in England and the car excursion booked in advance from England. The hotel operator was incorporated . .
At ComCGoldman Sachs International v Novo Banco Sa ComC 7-Aug-2015
. .
CitedFour Seasons Holdings Incorporated v Brownlie SC 19-Dec-2017
The claimant and her family were in a car crash while on holiday in Egypt. The claimant’s husband and his daughter died. The holiday had been booked in England and the car excursion booked in advance from England. The hotel operator was incorporated . .
Appeal fromGuardians of New Zealand Superannuation Fund and Others v Novo Banco, Sa CA 4-Nov-2016
. .
CitedNational Bank of Greece and Athens v Metliss HL 1957
The National Bank of Greece had been created under the law of Greece. By a Greek decree, the bank was dissolved and, by the same decree, amalgamated with another bank into a new banking corporation under the name of ‘National Bank of Greece and . .
CitedLBI HF v Kepler Capital Markets SA ECJ 24-Oct-2013
ECJ Request for a preliminary ruling – Reorganisation and winding-up of credit institutions – Directive 2001/24/EC – Articles 3, 9 and 32 – National legislative act conferring on reorganisation measures the . .
CitedKotnik And Others v Drzavni Zbor Republike Slovenije ECJ 19-Jul-2016
ECJ (Judgment) Reference for a preliminary ruling – Validity and interpretation of the Banking Communication from the Commission – Interpretation of Directives 2001/24/EC and 2012/30/EU – State aid to banks in . .

Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.619945

Banco Santander Sa v Bayfern Ltd and Others: ComC 29 Jun 1999

The court was asked whether the risk of fraud on the part of the beneficiary of a confirmed deferred payment letter of credit is to be borne by the issuing bank (and so possibly the applicant for the credit) or by the confirming bank where the confirming bank has discounted its own payment obligations to the beneficiary and paid over the discounted sum to it and the fraud is discovered only after it has done so but before the maturity date of the letter of credit.
Held: It is well established that the beneficiary of a deferred payment letter of credit, if he has obtained it by fraud or deception, will not be entitled to the benefit of the deferred credit. A bank having made discounted advances against the letter was therefore unable to claim re-imbursement when such fraud was later discovered.
ComC Deferred payment letter of credit – fraud on part of beneficiary discovered before maturity date of letter of credit – confirming bank having discounted own obligation to beneficiary of letter – whether risk of fraud to be borne by issuing or confirming bank.
Langley J
Times 29-Jun-1999, Gazette 30-Jun-1999, [1999] EWHC 284 (Comm)
Bailii
Uniform Customs and Practice for Documentary Credits (1993) of the International Chamber of Commerce
England and Wales
Citing:
CitedStoddart v Union Trust Ltd CA 1912
. .
CitedEuropean Asian Bank AG v Punjab and Sind Bank CA 1983
The court heard a claim by the appellant bank against the issuing bank of a deferred payment letter of credit. The appellants had negotiated the credit by paying its discounted value to the Beneficiary. Between that date and the maturity date fraud, . .
CitedThe Society of Lloyds v CIB 1993
. .
CitedIn re Charge Card Services Ltd ChD 1987
The court discussed the historic availability of set-off in an insolvency: ‘By the turn of the [20th] century, therefore, the authorities showed that debts whose existence and amount were alike contingent at the date of the receiving order, and . .
CitedUnited City Merchants v Royal Bank of Canada HL 1983
The House was asked as to the question of fraud which would entitle a banker to refuse to pay under a letter of credit notwithstanding the rule requiring payment when the documents were in order on their face.
Held: The whole commercial . .

Lists of cited by and citing cases may be incomplete.
Updated: 25 July 2021; Ref: scu.78128

United Dominions Trust Ltd v Kirkwood: QBD 1965

For a company to be taken to carry on the business of banking money it must be able to show that it took money on current accounts.
Mocatta J
[1966] 1 QB 783, [1965] 3 WLR 817, [1965] 2 All ER 992
England and Wales
Cited by:
Affirmed on appeal fromUnited Dominions Trust Ltd v Kirkwood CA 24-Feb-1966
The defendant was MD of a company which borrowed from the plaintiff. The company drew five bills as security, and the defendant endorsed them. When the company failed, the plaintiff gave notice of dishonour and sued the defendant as indorsee. The . .

These lists may be incomplete.
Updated: 04 June 2021; Ref: scu.260041

Halifax Mortgage Services Ltd (Formerly BNP Mortgages Ltd) v Stepsky and Another: CA 1 Dec 1995

The knowledge of a solicitor, acting for both the borrower and the lender, of the lay clients intentions as regards the future use of the loan, is not to be imputed to the lender, even though the solicitor acts for both parties, and is the lender’s agent.
Morritt LJ discussed section 199: ‘Counsel for the wife submitted that it did not apply as the knowledge came to the knowledge of the solicitors for the lender as such when they were instructed to act on behalf of the lender on 19 June 1990. In the case of the wife it was submitted that the solicitors were not instructed by her as ‘agents to know.’
I do not accept either of these submissions. In my view the section has to be applied in accordance with its terms to the facts of this case. There is no doubt that the information as to the true purpose of the remortgage loan imparted by the husband came to the knowledge of the solicitors on 12 June 1990 as the solicitors for the husband and wife alone for they were not instructed to act for the lenders until 19 June at the earliest. That knowledge once acquired remained with the solicitors and cannot be treated as coming to them again when they were instructed on behalf of the lenders. As counsel for the wife accepted, their knowledge cannot be treated as divided or disposed of and reacquired in that way. The conclusion seems to me to be inescapable, namely that knowledge of the relevant matters facts or things did not come to the solicitors as the solicitors for the lenders. Accordingly it did not come to them ‘as such.’ It was not disputed that the lender is a purchaser within the definition contained in section 205(1)(xxi) of the Law of Property Act 1925. Consequently section 199(1)(ii)…b) precludes the solicitors’ knowledge of the relevant matters or facts being imputed to the lender.’
Morritt LJ
Times 01-Dec-1995, Gazette 11-Jan-1996, [1996] Ch 207
Law of Property Act 1925 199
England and Wales
Citing:
Appeal fromHalifax Mortgage Services Ltd (Formerly BNP Mortgages Ltd) v Stepsky and Another ChD 27-Jun-1995
The knowledge of a solicitor, acting for both the borrower and the lender, of the lay clients intentions as regards the future use of the loan, is not to be imputed to the lender, even though the solicitor acts for both parties, and is the lender’s . .

Cited by:
CitedScotlife Home Loans (No 2) Limited v Melinek and Melinek CA 9-Sep-1997
The second defendant sought leave to appeal against a possession order obtained by the claimant. The loan obtained had been misapplied by the first defendant, her husband. She had been advised in the transaction by his partner in their solicitors’ . .
CitedHardy and others v Fowle and Another ChD 26-Oct-2007
Mortgagees claimed possession of the land. The occupiers claimed a right of occupation under a lease. The mortgagees argued that the lease had been surrendered.
Held: The lease had been surrendered by a deed. The defects in notice alleged did . .

These lists may be incomplete.
Updated: 02 June 2021; Ref: scu.81151

Bank of Baroda v Rayarel and Others: CA 19 Jan 1995

A bank may assume that a solicitor advising a customer’s wife had acted properly. The solicitors acted for both the husband and the wife before they also gave their instructions to the solicitors.
Times 19-Jan-1995, [1995] 2 FLR 376
England and Wales
Cited by:
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .

These lists may be incomplete.
Updated: 02 June 2021; Ref: scu.78132

Burnett v Westminster Bank Ltd: ChD 1965

The plaintiff had a cheque account at the Borough Branch and drew a cheque on the cheque forms which had been provided. He crossed out the word `Borough’ and put in `Bromley’. He altered the address and he initialled the cheque. Later he decided to stop payment on the cheque, telephoning the Bromley Branch and informing them of this decision. The cheque had passed through the computer system which could not read the alterations made by the plaintiff. The cheque itself was forwarded to the Borough Branch at which the employees were unaware of the stop-payment instructions. At the end of the suspense period, the amount of the cheque was debited to the plaintiff’s account at the Borough Branch.
Held: The bank was unsuccessful in its contention that a new practice utilising the introduction of magnetic ink characters seeking to restrict cheques to the particular account for which they had been prepared, had been consensually agreed to by the customer. Notice of a change in condition oin cheque book covers was ineffective. A stop instruction from a bank’s customer applies to all accounts at the same branch if a specific account is not specified.
The bank is the debtor of the customer, whether the customer has a current or deposit account.
Mocatta J
[1966] 1 QB 742, [1965] 3 All ER 81
England and Wales

Updated: 01 June 2021; Ref: scu.448095

Woodeson and Another v Credit Suisse (UK) Ltd: CA 17 May 2018

Appeal from a decision to grant the defendant bank summary judgment in respect of certain of the claimants’ claims. The result of the judgment is that the claimants can pursue a claim in deceit and contend that such claim is neither time-barred nor precluded by anti-set off provisions in their contract with the bank. No other claim is permissible. That is because it is arguable that the time for a deceit claim (as opposed to claims for negligent advice or breach of statutory duty) is extended pursuant to section 32 of the 1980 Act and that the anti-set off provisions may be unreasonable clauses within the relevant statutory provisions, on which the bank may not rely.
Longmore, Leggatt LJJ
[2018] EWCA Civ 1103
Bailii
Limitation Act 1980 32
England and Wales
Cited by:
CitedBoyse (International) Ltd v Natwest Markets Plc and Another ChD 27-May-2020
Claim alleging misselling of interest rate hedging products. The court considered the defendants strike out application, and applications for leave to amend pleadings.
Held: it will normally be appropriate for summary judgment to be pursued on . .

These lists may be incomplete.
Updated: 12 May 2021; Ref: scu.616341

Arab Bank Plc v John D Wood Commercial Ltd (In Liquidation) and others: CA 25 Nov 1999

Having once recovered damages against a valuer for a negligent survey, there was nothing to stop a lender recovering also under a policy of insurance under a mortgage indemnity guarantee, and so the lender was not required to give credit for monies already received. Such policies were taken out for the benefit of the lender not the borrower, and the insurance company being subrogated to the lender, no double recovery was involved.
Mance LJ
Times 25-Nov-1999, Gazette 08-Dec-1999, [2000] 1 WLR 857
England and Wales
Cited by:
CitedGoldstein v Levy Gee ( A Firm) ChD 1-Jul-2003
There had been a dispute between shareholders, and the defendant was called upon to value the company. He issued a tender for valuers to value the properties. Complaint was made that the tender was negligent in its description of the basis for . .
CitedRoger Michael and others v Douglas Henry Miller and Another ChD 22-Mar-2004
Property had been sold by the respondents as mortgagees in possession. The claimants said the judge had failed to award the value of the property as found to be valued, and had not given a proper value to a crop of lavender.
Held: In . .
CitedLowick Rose Llp v Swynson Ltd and Another SC 11-Apr-2017
Losses arose from the misvaluation of a company before its purchase. The respondent had funded the purchase, relying upon a valuation by the predecessor of the appellant firm of accountants. Further advances had been made when the true situation was . .
CitedSS (Sri Lanka), Regina (on The Application of) v The Secretary of State for The Home Department CA 15-Jun-2018
The court was asked whether, in cases heard by the First-tier Tribunal (Immigration and Asylum Chamber) where the credibility of the appellant is in issue, there is a rule that a delay of more than three months between the hearing of oral evidence . .

These lists may be incomplete.
Updated: 09 May 2021; Ref: scu.77841

Sina Bank v Council: ECFI 18 Oct 2016

ECJ (Judgment) Common foreign and security policy – Restrictive measures taken against Iran with the aim of preventing nuclear proliferation – Freezing of funds – Actions for annulment – Period allowed for commencing proceedings – Amendment of pleadings – Admissibility – Obligation to state reasons – Rights of defence – Right to effective judicial protection – Manifest error of assessment – Adjustment of the effects in time of an annulment
ECLI:EU:T:2016:619, [2016] EUECJ T-418/14
Bailii
European
Citing:
See AlsoSina Bank v Council ECFI 11-Dec-2012
ECFI Common foreign and security policy – Restrictive measures taken against Iran with the aim of preventing nuclear proliferation – Freezing of funds – Actions for annulment – Duty to state reasons. . .

These lists may be incomplete.
Updated: 27 April 2021; Ref: scu.570147

Generale Bank Nederland Nv (Formerly Credit Lyonnais Bank Nederland Nv) v Export Credit Guarantee Department: CA 23 Jul 1997

The bank claimed that it had been defrauded, and that since an employee of the defendant had taken part in the fraud the defendant was had vicarious liability for his participation even though they knew nothing of it.
Held: Where A becomes liable to B as a joint tortfeasor with C in the tort of deceit practised by C on B on the basis that A and C have a common design to defraud B and A renders assistance to C pursuant to and in furtherance of the common design, does D, A’s employer, become vicariously liable to B, simply because the act of assistance, which is not itself the deceit, is in the course of A’s employment with D? An employer was not liable for the fraudulent acts of his employee during the employment but may be for purposes of fraud by third party.
Hobhouse LJ said: ‘Mere assistance, even knowing assistance, does not suffice to make the ‘secondary’ party liable as a joint tortfeasor with the primary party. What he does must go further. He must have conspired with the primary party or procured or induced his commission of the tort . . ; or he must have joined in the common design pursuant to which the tort was committed’
Stuart-Smith LJ, Hobhouse LJ
Times 04-Aug-1997, Gazette 10-Sep-1997, [1998] 1 Lloyd’s Rep 19, [1997] EWCA Civ 2165
England and Wales
Citing:
Appeal fromGenerale Bank Nederland Nv (Formerly Credit Lyonnais Bank Nederland Nv) v Export Credit Guarantee Department 1996
The Export Credit Guarantee Department was not liable to the Bank for the loss which the Bank sustained due to the fraud of one of its customers in which an employee was involved. . .
CitedPLG Research Ltd and Another v Ardon International Ltd and Others ChD 25-Nov-1994
A patent infingement claim was met by the assertion that the material covered had been disclosed before the patent had been obtained. The court was asked as to the test of whether the information in a claim had been disclosed. Aldous J said: ‘Mr. . .

Cited by:
Appeal fromGenerale Bank Nederland Nv (Formerly Credit Lyonnais Bank Nederland Nv) v Export Credits Guarantee Department HL 19-Feb-1999
The wrong of the servant or agent for which the master or principal is liable is one committed in the case of a servant in the course of his employment, and in the case of an agent in the course of his authority. It is fundamental to the whole . .
CitedAbouRahmah and Another v Abacha and others QBD 28-Nov-2005
Claims were made as to an alleged fraud by some of the respondents. . .
CitedBritish Telecommunications Plc; Virgin Enterprises Ltd; J Sainsbury Plc; Marks and Spencer Plc and Ladbroke Group Plc v One In a Million Ltd and others CA 23-Jul-1998
Registration of a distinctive Internet domain name using registered trade marks and company names could be an infringement of a registered Trade Mark, and also passing off. It was proper to grant quia timet injunctions where necessary to stop . .
CitedTotal Network Sl v Customs and Excise Commissioners CA 31-Jan-2007
The defendants suspected a carousel VAT fraud. The defendants appealed a finding that there was a viable cause of action alleging a ‘conspiracy where the unlawful means alleged is a common law offence of cheating the public revenue’. The defendants . .
CitedTwentieth Century Fox Film Corporation and Another v Newzbin Ltd ChD 29-Mar-2010
The defendant operated a web-site providing a search facility of the Usenet news system which allowed its users to locate copies of films online for downloading. The claimant said this was an infringement of its copyrights.
Held: The defendant . .
CitedThe Rugby Football Union v Viagogo Ltd QBD 30-Mar-2011
The claimant objected to the resale through the defendant of tickets to matches held at the Twickenham Stadium. The tickets contained terms disallowing resales at prices over the face value. They sought orders for the disclosure of the names of the . .
CitedFish and Fish Ltd v Sea Shepherd UK and Another AdCt 25-Jun-2012
The claimant company was engaged in tuna fish culture off shore to Malta. The defendant ship was owned by a charity which campaigned against breaches of animal preservation conventions. Fish were being transporting live blue fin tuna in towed . .
CitedFish and Fish Ltd v Sea Shepherd Uk and Others CA 16-May-2013
The claimant company sought damages after their transport of live tuna was attacked by a protest group. They now appealed against a decision that the company owning the attacking ship was not liable as a joint tortfeasor.
Held: The appeal was . .
CitedSea Shepherd UK v Fish and Fish Ltd SC 4-Mar-2015
Accessory Liability in Tort
The court considered the concept of accessory liability in tort. Activists had caused damage to vessels of the respondent which was transporting live tuna in cages, and had caused considerable damage. The appellant company owned the ship from which . .

These lists may be incomplete.
Updated: 23 April 2021; Ref: scu.80791

Heis and Others (Administrators of MF Global UK Ltd) v MF Global Inc: ChD 1 Nov 2012

An investment bank administrator who had been appointed under the 2011 Regulation was strictly analagous to a liquidator being appointed.
David RichardsJ
[2012] EWHC 3068 (Ch), [2012] WLR(D) 304, [2013] 1 WLR 903, [2013] 1 BCLC 552
Bailii, WLRD
Investment Bank Special Administration Regulations 2011
England and Wales

Updated: 21 April 2021; Ref: scu.465530

Ropaigealach and Another v Cheltenham and Gloucester Building Society: CA 20 Mar 1997

The applicants sought leave to appeal against a possession order made for arrears under their mortgage. A possession order had been suspended on an arrangement as to payment. The way the society calculated its payments meant that the arrears continued to climb. After complaint the applicant stopped payments, and complained to the Ombudsman, whose decision led to the respondent writing off all but some arrears which it then sought to be paid in full by return.
Held: The order allowing payment by instalments continued in effect, and the society remained bound by it. Ward LJ said: ‘I do not know whether to characterise this application as a storm in a tea cup, a sledgehammer taken to crack a nut or a comedy of errors. ‘
Ward LJ
[1997] EWCA Civ 1296
England and Wales
Cited by:
See AlsoRopaigealach v Barclays Bank plc CA 6-Jan-1999
The applicant’s property was charged to the defendant. At the time it was not occupied. The mortgage fell into arrears, and after serving notice at the property, the bank took posssession and sold the property at auction. The claimants said the bank . .

These lists may be incomplete.
Updated: 21 April 2021; Ref: scu.141692

National Westminster Bank Plc v Kitch: CA 14 May 1996

An action to recover an overdraft debt which was secured by a mortgage is not itself a mortgage action. A claim based on a simple contract debt does not cease to be so simply because it is also secured by a charge.
Gazette 15-May-1996, Times 14-May-1996, [1996] 1 WLR 1316
Rules of the Supreme Court Order 88 1
England and Wales
Cited by:
CitedHopkinson and Others and Birmingham Mid-Shires Building Society v Tupper CA 30-Jan-1997
The plaintiffs appealed from an order striking out their claim for want of prosecution. The defendant’s property had been sold by the mortgagees, and the plaintiffs as assignees of their debt sought to recover the balance outstanding from the . .

These lists may be incomplete.
Updated: 11 April 2021; Ref: scu.84218

Credit Lyonnais Bank Nederland NV v Burch: CA 1 Jul 1996

A Bank was to assume that undue influence existed where they knew that an employee was giving security for his employer’s debt to the bank. An unlimited guarantee given by an employee to his employer’s bank was set aside as unconscionable. The circumstances in which the doctrine of unconscionable bargains would apply were similar to those of undue influence. ‘Equity’s jurisdiction to relieve against (unconscionable bargains), although more rarely exercised in modern times is at least as venerable as its jurisdiction to relieve against those procured by undue influence.’ When attending his client to witness such a document, the solicitor must in any event advise her that she is under no obligation to enter into the transaction at all and, if she still wishes to do so, that she is not bound to accept the terms of any document which has been put before her.
Nourse LJ
Gazette 04-Sep-1996, Times 01-Jul-1996, [1997] 1 All ER 144
England and Wales
Cited by:
CitedChagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
CitedPortman Building Society v Dusangh and Others CA 19-Apr-2000
The defendant sought to set aside an order for possession under a mortgage.
Held: Where a case was strong enough on its face in terms of conduct and terms, unconscionable conduct could be inferred if there was no explanation offered to . .
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .

These lists may be incomplete.
Updated: 11 April 2021; Ref: scu.79606

Banco Exterior Internacional v Mann and Others: CA 19 Dec 1994

A charge to secure a husband’s borrowings was enforceable where the wife’s signature had been taken before a solicitor who had explained it. Hobhouse LJ (dissenting) ‘It must be remembered that the starting point of this exercise is that the wife’s will is being unduly and improperly influenced by the will of her husband. The steps taken have to be directed to freeing her of that influence or, at the least, providing some counterbalance.’
Hobhouse LJ
Times 19-Dec-1994, [1995] 1 All ER 936
England and Wales
Cited by:
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .
CitedGovernor and Company of Bank of Scotland v Bennett and Another ChD 1997
Mrs Bennett defended the bank’s claim for possession of the matrimonial home charged to the bank to secure her husband’s borrowings. She said that her signature, both to the guarantee and to the legal charge, had been procured by her husband’s undue . .

These lists may be incomplete.
Updated: 10 April 2021; Ref: scu.78127

In Re New Bullas Trading Ltd: CA 12 Jan 1994

A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be provided for payment of book debts. However ‘Just as it is open to contracting parties to provide for a fixed charge on future book debts, so it is open to them to provide that they shall be subject to a fixed charge while they are uncollected and a floating charge on realisation. No authority to the contrary has been cited and, the principle being as spacious as it has been expressed to be, no objection is on that account sustainable. For these reasons, I would accept [Counsel’s] second main submission and hold that the charge over book debts of the company, as created by the debenture, was, unless and until their proceeds were paid into the specified account, a valid fixed charge.’
Nourse LJ, Russell LJ and Scott Baker J
Times 12-Jan-1994, Ind Summary 17-Jan-1994, [1994] 1 BCLC 449
England and Wales
Citing:
Appeal fromRe: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
AppliedSiebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .

Cited by:
ReversedAgnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle PC 5-Jun-2001
(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver . .
Appealed toRe: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
CitedNational Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
CitedNational Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .

These lists may be incomplete.
Updated: 09 April 2021; Ref: scu.82072

Continental Bank Na v Aeakos Compania Naviera Sa and Others: CA 26 Nov 1993

The Bank was entitled to an injunction in the UK, by virtue of the jurisdiction given in their agreement, even though it was not the UK court which was first seised of the matter. Steyn LJ said: ‘. . a claim for damages for breach of contract would be a relatively ineffective remedy. An injunction is the only effective remedy for the appellants’ breach of contract. If the injunction is set aside, the appellants will persist in their breach of contract, and the bank’s legal rights as enshrined in the jurisdiction agreements will prove to be valueless. Given the total absence of special countervailing factors, this is the paradigm case for the grant of an injunction . .’
Steyn LJ
Ind Summary 13-Dec-1993, Times 26-Nov-1993, [1994] 1 WLR 588
Brussels Convention 1968 Art 17
England and Wales
Cited by:
CitedNational Westminster Bank v Utrecht-America Finance Company CA 10-May-2001
An agreement between the parties for assignment or novation of a credit agreement, contained a ‘take out’ agreement (‘TOA’). The defendant began proceedings in California to rescind the agreement, and the claimants obtained summary judgement under . .
CitedOT Africa Line Ltd v Magic Sportswear Corporation and others CA 13-Jun-2005
The parties to a contract had agreed that the proper law for the contract was England. One party commenced proceedings in Canada, and the courts of Canada had accepted jurisdiction as the most appropriate and convenient forum to resolve the dispute. . .

These lists may be incomplete.
Updated: 09 April 2021; Ref: scu.79470

Depositors’ Protection Board v Dalia and Another: CA 11 May 1993

The Board was liable to pay compensation claims from equitable assignees of depositors with a failed bank. They were not to be excluded from making claims.
Gazette 16-Jun-1993, Independent 18-May-1993, Times 11-May-1993
Banking Act 1987 58(1)
England and Wales
Citing:
Appeal fromDepositors Protection Board v Dalia and Another ChD 18-Nov-1992
Equitable assignees of deposits in a bank where those deposits were protected under the scheme, were entitled to the compensation which would have been paid to the beneficial owners. . .

Cited by:
Appeal fromDepositors’ Protection Board v Dalia HL 20-May-1994
The House was asked as to the meaning of the word ‘depositor’. Regulations were prayed in aid which were made four years after the date of the enactment.
Held: The protection given by the Depositor Protection Scheme does not extend to . .

These lists may be incomplete.
Updated: 09 April 2021; Ref: scu.79921

Locabail (UK) Ltd and Another v Waldorf Investment Corporation and Others: ChD 31 Mar 1999

A consent to a mortgage on a property, allowed a bank to substitute a second charge for the first, without the owners consent, but this was limited to the extent and value of the first charge. There was no argument to limit the effect of the second charge to an equitable charge.
Times 31-Mar-1999, Gazette 19-May-1999
England and Wales
Citing:
AppliedEquity and Law Home Loans Ltd v Prestidge CA 1992
A house was bought in the name of one partner in an unmarried couple. It was subject to a mortgage, and the non-owner contributed a capital sum. The landowner later remortgaged for a larger sum, but without the partner’s consent. The landowner then . .
See AlsoLocabail (UK) Ltd and Another v Waldorf Investment Corporation and Others (No 4) ChD 13-Jun-2000
An application to the European Court of Human Rights was not an appeal. Where it was clear that any decision there would not affect the issues between the parties, there was no reason to suspend enforcement of the order which had given rise to the . .

Cited by:
See AlsoLocabail (UK) Ltd and Another v Waldorf Investment Corporation and Others (No 4) ChD 13-Jun-2000
An application to the European Court of Human Rights was not an appeal. Where it was clear that any decision there would not affect the issues between the parties, there was no reason to suspend enforcement of the order which had given rise to the . .

These lists may be incomplete.
Updated: 08 April 2021; Ref: scu.83126

Global Asset Capital, Inc and Another v Aabar Block Sarl and Another: ComC 18 Feb 2016

Walker J
[2016] EWHC 298 (Comm)
Bailii
England and Wales
Cited by:
Appeal fromGlobal Asset Capital, Inc and Another v Aabar Block Sarl and Others CA 1-Feb-2017
Appeal against refusal of summary judgment. The court set out the applicable principles concerning strike out and summary judgment: ‘(1) The court must consider whether the case of the respondent to the application has a realistic as opposed to . .

These lists may be incomplete.
Updated: 08 April 2021; Ref: scu.560179

Carse v Coppen: IHCS 8 Dec 1950

The court considered the inability to create a floating charge over a company’s assets in Scots law. It was conceded that a company registered in Scotland could not create a valid and effectual floating charge over its assets in Scotland, but it was contended that it had done so over its assets in England. This argument was rejected. Lord President Cooper said that a floating charge was utterly repugnant to the principles of Scots law, which did not recognise it as creating a security at all. The reforms in the law which had been effected because of the many criticisms that had been directed against the injustices capable of being inflicted on the trade creditors by the use of floating charges had been expressly confined to companies registered in England. It was unthinkable that this could have been done except upon the view that companies registered in Scotland and subject to Scots law could not create floating charges.
Lord President Cooper
1951 SC 233, [1950] ScotCS CSIH – 5
Bailii
Scotland
Cited by:
CitedNational Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
CitedSharp and Others v Woolwich Building Society HL 6-Feb-1997
The House was asked: what is meant by the word property in a floating charge and in section 53(7) of the 1986 Act which provides for the effect of the appointment of a receiver by the holder of such a charge in the following terms: ‘(7) On the . .

These lists may be incomplete.
Updated: 11 March 2021; Ref: scu.228297

GMAC Commercial Credit Development Ltd v Sandhu and Another: ComC 31 Mar 2004

Claims under separate Deeds of Guarantee and Indemnity
Richard Siberry QC
[2004] EWHC 716 (Comm)
Bailii
England and Wales
Citing:
See AlsoGMAC Commercial Credit Development Ltd v Sandhu and Another CA 10-Jul-2001
Claims under deeds of guarantee and indemnity to support debt factoring arrangements. . .

These lists may be incomplete.
Updated: 07 March 2021; Ref: scu.432823

Marley and 11 Others v Mutual Security Merchant Bank and Trust Co Ltd Co: PC 15 Oct 1990

BANKING – EQUITY, TRUSTS, PROBATE ADMINISTRATOR’S POWERS OF INVESTMENT Bank as sole administrator cannot invest estate funds in its own deposits in the absence of express sanction in the trust instrument.
Lord Oliver of Aylmerton said: ‘A trustee who is in genuine doubt about the propriety of any contemplated course of action in the exercise of his fiduciary duties and discretions is always entitled to seek proper professional advice and, if so advised, to protect his position by seeking the guidance of the court.’
He also said: ‘The question whether the trustee has demonstrated that the contract submitted for approval is in the best interests of the beneficiaries reduces, in such a case as this, to whether the trustee can satisfy the court that it has taken all the necessary steps to obtain the best price that would be taken by a reasonably diligent professional trustee. The question may equally well be expressed as whether the trustee has shown that it has fully discharged its duty. That question may appear to be very similar to the question whether to enter into the contract without taking further steps and without seeking the directions of the court would justify an action by the beneficiaries for misconduct justifying the removal of the trustee. Nevertheless there is an essential distinction in that, in such an action, the beneficiaries would be required to assume the positive burden of demonstrating a breach of fiduciary duty. A failure to do so does not demonstrate the converse, namely that the transaction proposed, because not proved to be a breach of fiduciary duty, is therefore one which is in the interest of the beneficiaries’ . . and ‘In the Court of Appeal, Rowe P regarded it as doubtful whether the respondent, having entered into the conditional contract, could even investigate an alternative offer, but regarded that offer in any event as unworthy of serious consideration because the respondent had no knowledge of the financial stability of the proposed purchaser and because, in postponing conclusion of the conditional contract whilst the matter was investigated, the respondent risked losing the ‘bird in the hand’. . .
What the Court of Appeal appears to have overlooked entirely was that, having regard to the course which it was proposed to take as regards the obviously unsatisfactory features of the conditional contract – that is to say the treatment of moneys falling due to the estate up to the closing date and in the interest-free postponement of a substantial part of the consideration – the ‘bird in the hand’ argument ceased to have any validity at all, for the effect of the order proposed and finally made was that the respondent had, in any event, to reject the conditional contract as it stood and to negotiate fresh terms with the purchaser if it proved willing to consider them.’
Lord Oliver of Aylmerton
[1991] 3 All ER 198, [1990] UKPC 44
Bailii
Trustee Act 1956 66
England and Wales
Cited by:
CitedJohn Weth and Others v Her Majesty’s Attorney General and Others CA 23-Feb-2001
A charitable trust had been established. Protracted disputes had taken place, and the burden of the costs required to be apportioned. The financial practices of the charity had been informal leading to confusion, and dissension. An intervention by . .
Cited3 Individual Present Professional Trustees of 2 Trusts v an Infant Prospective Beneficiary of One Trust and others ChD 25-Jul-2007
The parties challenged under the 198 Act the right of trustees to seek a Beddoe order protecting themselves against an award of costs. . .
See AlsoMarley and Others v Mutual Security Merchant Bank and Trust Co Ltd Co PC 2-Feb-1995
(Jamaica) . .

These lists may be incomplete.
Updated: 05 March 2021; Ref: scu.429845

Bournemouth and Boscombe Athletic Football Club Ltd v Lloyds TSB Bank Plc: CA 28 Jun 2004

Thorpe, Jonathan Parker LLJ
[2004] EWCA Civ 935
Bailii
England and Wales
Citing:
See AlsoBournemouth and Boscombe Athletic Football Club Ltd v Lloyds TSB Bank Plc CA 10-Dec-2003
Appeal from refusal of extension of time to serve particulars of claim and strike out. . .

These lists may be incomplete.
Updated: 03 March 2021; Ref: scu.427736

Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd: CA 1 Feb 2018

The court was asked whether the defence of illegality is available to allow a bank to defeat a claim in negligence and breach of contract brought by its corporate customer.
Sir Geoffrey Vos Ch, Gloster, McCombe LJJ
[2018] EWCA Civ 84, [2018] WLR(D) 57, [2018] 1 Lloyd’s Rep 472, [2018] PNLR 19, [2018] 1 WLR 2777, [2018] 4 All ER 204, [2018] Bus LR 1115, [2018] 2 All ER (Comm) 975, [2018] 2 BCLC 1
Bailii, WLRD
England and Wales
Cited by:
Appeal fromSingularis Holdings Ltd v Daiwa Capital Markets Europe Ltd SC 30-Oct-2019
. .

These lists may be incomplete.
Updated: 01 March 2021; Ref: scu.604161

Louis Castrique v Guiseppe Buttigieg: PC 27 Nov 1855

The liability of an indorser to his immediate indorsee arises out of a contract between them, and this contract in no instance consists exclusively in the writing popularly called an indorsement, vhich is necessary to the existence of the contract in question but arises out of the written indorsement itself ;
[1855] UKPC 26
Bailii
England and Wales

Updated: 28 February 2021; Ref: scu.424613

Kotonou v National Westminster Bank Plc: ChD 5 Jul 2010

[2010] EWHC 1659 (Ch)
Bailii
England and Wales
Citing:
See AlsoNational Westminster Bank Plc v Kotonou and Another ChD 19-Jun-2006
. .
See AlsoNational Westminster Bank Plc v Kotonou CA 26-Feb-2007
. .
See AlsoNational Westminster Bank v Kotonou ChD 11-Dec-2009
. .

Cited by:
Appeal fromKotonou v National Westminster Bank Plc CA 30-Oct-2015
Appeal against summary dismissal of claim against the bank based on Henderson v Henderson.
Gloster LJ, commented on Buxton LJ’s observations in the Taylor Walton case: ‘Thus, in my view, what is required in the present case is ‘an intense focus . .

These lists may be incomplete.
Updated: 26 February 2021; Ref: scu.420391

Helmsley Acceptances Ltd v Hampton: CA 11 Mar 2010

The claimant lender sought damages from an allegedly negligent valuation by the defendant. It had syndicated its loan, and the defendant now argued that it could only claim for that part of the loan for which it retained ownership.
Held: The claimants had an arguable claim which should be allowed to go to trial. But it was also arguable that, even if the investors now joined fail for any reason to recover damages in respect of their loss, the loss can nevertheless be recoverable, either because Helmsley constituted themselves trustees of the securities and, by implication, the rights associated with the securities, or because Helmsley can rely on the so-called Albazero exception.
Longmore, Smith, Briggs LJJ
[2010] EWCA Civ 356
Bailii
England and Wales
Citing:
CitedLinden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd and Others; St. Martins Property Corporation Ltd v Sir Robert McAlpine HL 8-Dec-1993
A contractor had done defective work in breach of a building contract with the developer but the loss was suffered by a third party who had by then purchased the development. The developer recovered the loss suffered by the purchaser.
Held: . .
CitedTechnotrade Ltd v Larkstore Ltd CA 27-Jul-2006
A claim was made for damages arising from building operations. Question as to legal effect of assignment of cause of action. . .
CitedAlbacruz (Cargo Owners) v Albazero ‘The Albazero’ HL 1977
The House was asked as to the extent to which a consignor can claim damages against a carrier in circumstances where the consignor did not retain either property or risk. To the general principle that a person cannot recover substantial damages for . .
CitedBanque Bruxelles Lambert Sa v Eagle Star Insurance Co Ltd and Others CA 24-Feb-1995
The plaintiffs were mortgagees. The defendants were valuers. The defendants negligently over-valued properties and the plaintiffs then accepted mortgages of the properties. Later the property market collapsed and the various borrowers defaulted and . .

These lists may be incomplete.
Updated: 24 February 2021; Ref: scu.407767

Re Kaupthing Singer and Friedlander Ltd: ChD 19 Feb 2010

Blair J
[2010] EWHC 316 (Ch)
Bailii
Insolvency Act 1986
England and Wales
Citing:
BindingIn re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .

These lists may be incomplete.
Updated: 22 February 2021; Ref: scu.401666

Tew and Others v Bos (Shared Appreciation Mortgages) No 1 Plc and Others: ChD 22 Jan 2010

Litigation involving shared appreciation mortgages, mortgages which were offered for a period in 1997 and 1998 by certain lenders (Bank of Scotland (‘BoS’) and Barclays Bank) which are unconventional in relation to their interest payments and redemption terms. For present purposes they can be grouped into two categories which share a common feature. The common feature is that the loans are not repayable at any fixed time. They are repayable in the event of a sale, or the death of the mortgagor. On redemption the mortgagor pays the principal outstanding and a specified percentage of any increase in value of the property over the purchase costs. That percentage is a multiple of the loan to value ratio. The multiple varies depending on the category into which the mortgage falls. One category has no interest charge. In those cases the multiple is usually 3 times loan to value ratio. The other category has a fixed interest charge, and in this case the multiple is 1.
Mann J
[2010] EWHC 203 (Ch)
Bailii
England and Wales

Updated: 22 February 2021; Ref: scu.396743

Royal Bank of Scotland Plc v Carlyle: SCS 13 Jan 2010

The bank sought repayment of a loan to the defender, who replied saying that the Bank had promised additional funding without which he suffered losses.
Lord Glennie
[2010] ScotCS CSOH – 3
Bailii
Scotland
Cited by:
See AlsoRoyal Bank of Scotland Plc v Carlyle SCS 6-Aug-2010
(Outer House) . .
See AlsoRoyal Bank of Scotland Plc v Carlyle SCS 12-Sep-2013
. .
At Outer HouseCarlyle (Scotland) v Royal Bank of Scotland Plc SC 11-Mar-2015
Assessing Whether 1st Judge was Plainly Wrong
The Court was asked whether, on an objective assessment of a what a developer and the bank had said to each other, the bank intended to enter into a legally binding promise to advance sums in the future to fund not only the developers purchase of . .

These lists may be incomplete.
Updated: 22 February 2021; Ref: scu.393046

Deutsche Bank Ag v Sebastian Holdings Inc: ComC 1 Dec 2009

[2009] EWHC 3069 (Comm)
Bailii
England and Wales
Citing:
See AlsoDeutsche Bank Ag v Sebastian Holdings Inc ComC 14-Aug-2009
. .

Cited by:
See AlsoDeutsche Bank Ag v Sebastian Holdings Inc ComC 28-Apr-2016
. .
See AlsoDeutsche Bank Ag v Sebastian Holdings Inc ComC 16-Dec-2016
. .
See AlsoDeutsche Bank Ag v Sebastian Holdings Inc ComC 13-Dec-2017
. .

These lists may be incomplete.
Updated: 20 February 2021; Ref: scu.381695

Bank of Credit and Commerce International v Malik and Others: ChD 13 Mar 1995

A bank was free to set its own base rate as it wished despite its liquidation.
Ind Summary 13-Mar-1995
England and Wales
Cited by:
Appeal fromBank of Credit and Commerce International SA (In Liquidation) v Malik and Malik CA 5-Dec-1996
A bank in liquidation remained free to set its own base rate. . .

These lists may be incomplete.
Updated: 20 February 2021; Ref: scu.78303

Bank of Credit and Commerce International Sa (In Liquidation) (No 8): CA 2 Oct 1996

Not all debts which were eligible for proof in bankruptcy were also eligible for a set off.
Rose Ljexplained the doctrine of equitable marshallling, saying: ‘The doctrine of marshalling applies where there are two creditors of the same debtor, each owed a different debt, one creditor (A) having two or more securities for the debt due to him and the other (B) having only one. B has the right to have the two securities marshalled so that both he and A are paid so far as possible. Thus if a debtor has two estates (Blackacre and Whiteacre) and mortgages both to A and afterwards mortgages Whiteacre only to B, B can have the two mortgages marshalled so that Blackacre can be made available to him if A chooses to enforce his security against Whiteacre. For the doctrine to apply there must be two debts owed by the same debtor to two different creditors.’
. . and ‘[Marshalling] is never allowed to delay or defeat the creditor with several securities in the collection of his debt and the enforcement of his securities. He is allowed to realise his securities as he pleases’.
Rose LJ
Gazette 02-Oct-1996, [1996] Ch 245, [1996] 2 BCLC 254, [1996] 2 WLR 631, [1996] 2 All ER 121
Insolvency Rules 1986 4.90
England and Wales
Cited by:
CitedSzepietowski v The National Crime Agency SC 23-Oct-2013
S owned several propertie in charge to the bank, but the Agency said that each had been acquired with the proceeds of criminal activity. The parties had settled the claim by the grant of a second charge in favour of the Agency. However when that . .
CitedLB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .

These lists may be incomplete.
Updated: 20 February 2021; Ref: scu.78144

In re Kaupthing Singer and Friedlander Ltd: ChD 2 Oct 2009

Norris J
[2009] EWHC 2308 (Ch)
Bailii
Insolvency Act 1986
England and Wales
Cited by:
Appeal FromIn re Kaupthing Singer and Friedlander Ltd CA 11-May-2010
The court was asked as to the set-off, in a company administration, of future debts owed by the company to its creditors and by those creditors to the company, and whether the effect of those provisions was that, after the future debts were . .
See AlsoIn re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .

These lists may be incomplete.
Updated: 19 February 2021; Ref: scu.375620

Kommune and Another v DEPFA Acs Bank: ComC 4 Sep 2009

Local authorities in Denmark sought to recover sums paid to the defendant banks for swap trading, saying that the payments had been outwith their powers.
Tomlinson J
[2009] EWHC 2227 (Comm)
Bailii
England and Wales
Citing:
CitedWestdeutsche Landesbank Girozentrale v Islington London Borough Council HL 22-May-1996
Simple interest only on rate swap damages
The bank had paid money to the local authority under a contract which turned out to be ultra vires and void. The question was whether, in addition to ordering the repayment of the money to the bank on unjust enrichment principles, the court could . .
CitedGuinness Mahon and Co Ltd v Kensington and Chelsea London Borough Council CA 2-Mar-1998
Where a local authority entered into a loan agreement outside its powers, the agreement was void ab initio, not merely voidable, and all moneys paid could be reclaimed. . .
CitedKleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
CitedDeutsche Morgan Grenfell Group Plc v Inland Revenue and Another HL 25-Oct-2006
The tax payer had overpaid Advance Corporation Tax under an error of law. It sought repayment. The revenue contended that the claim was time barred.
Held: The claim was in restitution, and the limitation period began to run from the date when . .
CitedLipkin Gorman (a Firm) v Karpnale Ltd HL 6-Jun-1991
The plaintiff firm of solicitors sought to recover money which had been stolen from them by a partner, and then gambled away with the defendant. He had purchased their gaming chips, and the plaintiff argued that these, being gambling debts, were . .
CitedNIRU Battery Manufacturing Company and Another v Milestone Trading Ltd and others ComC 8-May-2003
There was a contract for the sale of lead ingots. The sale was supported by letters of credit but inaccurate certificates were issued to release payment. The parties sought now to amend the contributions in the light of the Royal Brompton Hospital . .
CitedGoss and others v Laurence George Chilcott As Liquidator of Central Acceptance Limited (In Liquidation) PC 23-May-1996
(New Zealand) Mr and Mrs Goss, had been granted a loan by the claimant finance company under a mortgage instrument that had been avoided by the claimant because it had been fraudulently altered by Mr Haddon, an employee of the claimant, without the . .

Cited by:
Appeal FromHaugesund Kommune and Another v Depfa Acs Bank CA 27-May-2010
. .

These lists may be incomplete.
Updated: 19 February 2021; Ref: scu.374385

Dexter Ltd (In Administrative Receivership) v Harley: ChD 2 Apr 2001

Money was transferred wrongfully out of the company, and then on again into the hands of the respondent. She received the money, and knew of its fraudulent provenance, but all her acts were committed outside the jurisdiction.
Held: It was not sufficient that the original act in breach of trust occurred within the jurisdiction, the claimant had to show that some act of the defendant had occurred here, if she was to be sued here.
Times 02-Apr-2001
Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (1968) (Cmnd 7395)
England and Wales

Updated: 11 February 2021; Ref: scu.79951