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 BHL an advisory duty in contract or tort regarding the break costs clause, given the arm's length negotiations, the presence of professional advisors, and the absence of any contract to advise. No negligent misrepresentation or collateral contract was established. The guarantees are enforceable and not discharged or subject to estoppel.

Citation
[2016] EWHC 1236 (QB)
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
Commercial/banking Dispute (bank Claim and Guarantee Claim) / High Court Trial, Judgment
Outcome
Claims by Bank Claim Claimants dismissed; Guarantee Claim by Promontoria Holding 87 BV succeeds.
Legal Topics
Bank's Advisory Duties, Misrepresentation, Personal Guarantees, Break Costs, Implied Terms, Negligence, Collateral Contracts, Estoppel
Banking Law Contract Law Tort Law Bank's Advisory Duties Misrepresentation Personal Guarantees Break Costs Implied Terms +3 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

Commercial/banking Dispute (bank Claim and Guarantee Claim) / High Court Trial, Judgment

Legal Issues

  1. 1 Whether the bank owed an advisory duty to the borrower (contractual or tortious)
  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 BHL an advisory duty in contract or tort regarding the break costs clause, given the arm's length negotiations, the presence of professional advisors, and the absence of any contract to advise. No negligent misrepresentation or collateral contract was established. The guarantees are enforceable and not discharged or subject to estoppel.

Court Disposition

Claims by Bank Claim Claimants dismissed; Guarantee Claim by Promontoria Holding 87 BV succeeds.

Orders

  • Bank Claim dismissed with costs
  • Guarantee Claim allowed; guarantees enforceable against defendants