North Shore Ventures Ltd v Anstead Holdings, Inc & Ors [2011] EWCA Civ 230 (09 March 2011)

North Shore Ventures Ltd v Anstead Holdings, Inc & Ors [2011] EWCA Civ 230 (09 March 2011)

The duty of disclosure in loan guarantees does not extend beyond unusual features of the contractual relationship; the facts not disclosed by North Shore were not such features. There was a binding contractual variation of the interest terms in November 2004, supported by consideration. The conclusive evidence clause in the Guarantee did not preclude the Guarantors from relying on the variation as a defence, as the certificate was manifestly incorrect in light of the variation.

Citation
[2011] EWCA Civ 230
Parties
Respondent/claimant: North Shore Ventures Ltd; 1st Defendant: Anstead Holdings, Inc.; Appellant/2nd Defendant: Ruslan Fomichev; Appellant/3rd Defendant: Vasily Peganov
Jurisdiction
England and Wales
Judgment Date
09 March 2011
Procedural Posture
Appeal From Chancery Division Judgment / Court of Appeal (civil Division) Judgment
Outcome
Appeal allowed in part
Legal Topics
Guarantee and Indemnity, Duty of Disclosure, Variation of Contract, Conclusive Evidence Clauses
Contract Law Banking and Finance Law Guarantee and Indemnity Duty of Disclosure Variation of Contract Conclusive Evidence Clauses

Case Brief

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Parties

North Shore Ventures Ltd

Respondent/claimant

Anstead Holdings, Inc.

1st Defendant

Ruslan Fomichev

Appellant/2nd Defendant

Vasily Peganov

Appellant/3rd Defendant

Procedural Posture

Appeal From Chancery Division Judgment / Court of Appeal (civil Division) Judgment

Legal Issues

  1. 1 Extent of creditor's duty of disclosure to surety in loan guarantees
  2. 2 Whether a contractual variation of the loan agreement occurred and is enforceable
  3. 3 Effect of a conclusive evidence clause in the guarantee on the guarantors' defences

Ratio Decidendi

The duty of disclosure in loan guarantees does not extend beyond unusual features of the contractual relationship; the facts not disclosed by North Shore were not such features. There was a binding contractual variation of the interest terms in November 2004, supported by consideration. The conclusive evidence clause in the Guarantee did not preclude the Guarantors from relying on the variation as a defence, as the certificate was manifestly incorrect in light of the variation.

Court Disposition

Appeal allowed in part

Orders

  • The judgment against the Guarantors is set aside to the extent it is inconsistent with the November 2004 variation of the Loan Agreement; the sum due is to be recalculated accordingly.