Finch & Anor v Lloyds TSB Bank Plc & Ors [2016] EWHC 1236 (QB) (08 June 2016)

Finch & Anor v Lloyds TSB Bank Plc & Ors [2016] EWHC 1236 (QB) (08 June 2016)

The bank did not owe an advisory duty in contract or tort to the claimants regarding the break costs clause, given the arms-length negotiations, the presence of professional advisers, and the absence of any assumption of responsibility. No negligent misrepresentation was established, no collateral agreement to provide further funding was proved, and the guarantees were valid and enforceable. The claims failed on all grounds.

Citation
[2016] EWHC 1236
Parties
Bank Claim Claimant / Guarantee Claim Defendant: Stephen Frederick Finch; Bank Claim Claimant: Omnia-Chem Limited; Bank Claim Defendant: Lloyds TSB Bank PLC; Guarantee Claim Claimant: Promontoria Holding 87 BV; Guarantee Claim Defendant: Paul Kenneth Abbott; Guarantee Claim Defendant: Andrew Runnacles Chadwick; Guarantee Claim Defendant: David John Schofield; Guarantee Claim Defendant: Scott Graeme Cairns
Jurisdiction
England and Wales
Judgment Date
08 June 2016
Procedural Posture
Civil (commercial/banking) / High Court Trial, Judgment
Outcome
Claims dismissed
Legal Topics
Bank's Advisory Duties, Misrepresentation, Personal Guarantees, Implied Contractual Terms, Negligence, Collateral Contracts, Estoppel
Banking and Finance Contract Law Tort Law Bank's Advisory Duties Misrepresentation Personal Guarantees Implied Contractual Terms Negligence +2 more

Case Brief

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Parties

Stephen Frederick Finch

Bank Claim Claimant / Guarantee Claim Defendant

Omnia-Chem Limited

Bank Claim Claimant

Lloyds TSB Bank PLC

Bank Claim Defendant

Promontoria Holding 87 BV

Guarantee Claim Claimant

Paul Kenneth Abbott

Guarantee Claim Defendant

Andrew Runnacles Chadwick

Guarantee Claim Defendant

David John Schofield

Guarantee Claim Defendant

Scott Graeme Cairns

Guarantee Claim Defendant

Procedural Posture

Civil (commercial/banking) / High Court Trial, Judgment

Legal Issues

  1. 1 Whether the bank owed an advisory duty to the borrower in contract or tort
  2. 2 Whether the bank breached any such duty by failing to explain break costs
  3. 3 Whether the bank made negligent misrepresentations about the loan being tailored to the borrower's needs

Ratio Decidendi

The bank did not owe an advisory duty in contract or tort to the claimants regarding the break costs clause, given the arms-length negotiations, the presence of professional advisers, and the absence of any assumption of responsibility. No negligent misrepresentation was established, no collateral agreement to provide further funding was proved, and the guarantees were valid and enforceable. The claims failed on all grounds.

Court Disposition

Claims dismissed

Orders

  • Bank Claim dismissed
  • Guarantee Claim allowed; guarantees enforceable