Nearfield Ltd v Lincoln Nominees Ltd & Anor [2006] EWHC 2421 (Ch) (09 October 2006)

Nearfield Ltd v Lincoln Nominees Ltd & Anor [2006] EWHC 2421 (Ch) (09 October 2006)

Clause 5.1.3 of the JVA imposes on Lincoln Trust Company (Jersey) Ltd an obligation to 'procure' repayment by Lincoln Nominees Ltd, which is construed as a 'see to it' obligation. Lincoln is liable to Nearfield for damages equal to the amount that LNL fails to pay upon written demand, as the contract does not limit Lincoln's liability in this capacity and the commercial context supports this construction.

Citation
[2006] EWHC 2421 (Ch)
Parties
Claimant: Nearfield Limited; First Defendant: Lincoln Nominees Ltd; Second Defendant: Lincoln Trust Company (Jersey) Ltd
Jurisdiction
England and Wales
Judgment Date
09 October 2006
Procedural Posture
Commercial Contract Enforcement / High Court Trial Judgment
Outcome
Judgment for the Claimant against the Second Defendant (Lincoln Trust Company (Jersey) Ltd) for damages for breach of clause 5.1.3 of the JVA.
Legal Topics
Interpretation of Contractual Terms, Obligations Under Joint Venture Agreements, Guarantees and Indemnities, Trustee Liability, Nominee Company Obligations
Contract Law Trust Law Commercial Law Interpretation of Contractual Terms Obligations Under Joint Venture Agreements Guarantees and Indemnities Trustee Liability Nominee Company Obligations

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Parties

Nearfield Limited

Claimant

Lincoln Nominees Ltd

First Defendant

Lincoln Trust Company (Jersey) Ltd

Second Defendant

Procedural Posture

Commercial Contract Enforcement / High Court Trial Judgment

Legal Issues

  1. 1 What is the meaning and legal effect of the obligation to 'procure' repayment in clause 5.1.3 of the Joint Venture Agreement?
  2. 2 Is Lincoln Trust Company (Jersey) Ltd liable to Nearfield Limited for the repayment of the loan and interest if Lincoln Nominees Ltd fails to pay?

Ratio Decidendi

Clause 5.1.3 of the JVA imposes on Lincoln Trust Company (Jersey) Ltd an obligation to 'procure' repayment by Lincoln Nominees Ltd, which is construed as a 'see to it' obligation. Lincoln is liable to Nearfield for damages equal to the amount that LNL fails to pay upon written demand, as the contract does not limit Lincoln's liability in this capacity and the commercial context supports this construction.

Court Disposition

Judgment for the Claimant against the Second Defendant (Lincoln Trust Company (Jersey) Ltd) for damages for breach of clause 5.1.3 of the JVA.

Orders

  • Lincoln Trust Company (Jersey) Ltd to pay Nearfield Limited damages equal to the unpaid principal and interest not recovered from Lincoln Nominees Ltd under the JVA.
  • Interest to be paid on the damages awarded.