The Royal Bank of Scotland Plc v Chandra & Anor [2010] EWHC 105 (Ch) (28 January 2010)

The Royal Bank of Scotland Plc v Chandra & Anor [2010] EWHC 105 (Ch) (28 January 2010)

The company remained liable for post-step-in lending under the security documents, and the structure adopted was commercially justified and not a sham. The bank was entitled to recover the sums advanced as 'expenses' under the debenture. There was no breach of equitable duty by the bank or receivers. Mrs Chandra was not subject to undue influence as she had sufficient understanding and opportunity for independent advice. The guarantees are enforceable for the sums claimed.

Citation
[2010] EWHC 105 (Ch)
Parties
Claimant: The Royal Bank of Scotland plc; First Defendant: Bala Perampalam Chandra; Second Defendant: Maria Perpetua Chandra
Jurisdiction
England and Wales
Judgment Date
28 January 2010
Procedural Posture
Commercial/banking Guarantee Enforcement / High Court Trial Judgment
Outcome
Judgment for the claimant
Legal Topics
Guarantees and Indemnities, Receiver's Powers, Step in Rights, Surety Discharge, Undue Influence, Construction Finance, Security Enforcement
Banking Law Contract Law Equity Insolvency Guarantees and Indemnities Receiver's Powers Step in Rights Surety Discharge +3 more

Case Brief

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Parties

The Royal Bank of Scotland plc

Claimant

Bala Perampalam Chandra

First Defendant

Maria Perpetua Chandra

Second Defendant

Procedural Posture

Commercial/banking Guarantee Enforcement / High Court Trial Judgment

Legal Issues

  1. 1 Whether the defendants are liable under personal guarantees for company borrowings after the bank's step-in and receivership structure
  2. 2 Whether the post-receivership lending and structure discharged or reduced the defendants' liability as guarantors
  3. 3 Whether the bank or receivers breached equitable duties to the defendants as sureties

Ratio Decidendi

The company remained liable for post-step-in lending under the security documents, and the structure adopted was commercially justified and not a sham. The bank was entitled to recover the sums advanced as 'expenses' under the debenture. There was no breach of equitable duty by the bank or receivers. Mrs Chandra was not subject to undue influence as she had sufficient understanding and opportunity for independent advice. The guarantees are enforceable for the sums claimed.

Court Disposition

Judgment for the claimant

Orders

  • Defendants to pay the sums due under the guarantees
  • Order for possession of the matrimonial home charged as security