CNM Estates (Tolworth Tower) Ltd v VeCREF I Sarl & Ors (Rev 1)

CNM Estates (Tolworth Tower) Ltd v VeCREF I Sarl & Ors (Rev 1)

Clause 19.1 of the Debenture does not exclude the Receivers’ liability for breach of the Equitable Duty of Care. Clause 16.10(a)(i) of the Intercreditor Agreement limits the Receivers’ liability for breach of the Equitable Duty of Care to cases where the breach is directly caused by gross negligence or wilful misconduct.

Parties
Claimant: CNM Estates (Tolworth Tower) Limited; First Defendant: VeCREF I SARL; Second Defendant: Venn Partners LLP; Third Defendant: Simon Peter Carvill-Biggs; Fourth Defendant: Freddy Khalastchi; Third Party: Knight Frank LLP
Jurisdiction
England and Wales
Judgment Date
22 June 2020
Procedural Posture
Commercial/contractual Dispute / Trial of Preliminary Issues
Outcome
Preliminary issues determined; Receivers’ liability for breach of Equitable Duty of Care limited to gross negligence or wilful misconduct by ICA; Debenture clause does not exclude liability.
Legal Topics
Receivership, Exclusion Clauses, Equitable Duty of Care, Interpretation of Contracts
Contract Law Property Law Banking and Finance Receivership Exclusion Clauses Equitable Duty of Care Interpretation of Contracts

Case Brief

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Parties

CNM Estates (Tolworth Tower) Limited

Claimant

VeCREF I SARL

First Defendant

Venn Partners LLP

Second Defendant

Simon Peter Carvill-Biggs

Third Defendant

Freddy Khalastchi

Fourth Defendant

Knight Frank LLP

Third Party

Procedural Posture

Commercial/contractual Dispute / Trial of Preliminary Issues

Legal Issues

  1. 1 Whether clause 19.1 of the Debenture excludes the Receivers’ liability for breach of the Equitable Duty of Care
  2. 2 Whether clause 16.10(a)(i) of the Intercreditor Agreement limits the Receivers’ liability for breach of the Equitable Duty of Care to cases of gross negligence or wilful misconduct

Ratio Decidendi

Clause 19.1 of the Debenture does not exclude the Receivers’ liability for breach of the Equitable Duty of Care. Clause 16.10(a)(i) of the Intercreditor Agreement limits the Receivers’ liability for breach of the Equitable Duty of Care to cases where the breach is directly caused by gross negligence or wilful misconduct.

Court Disposition

Preliminary issues determined; Receivers’ liability for breach of Equitable Duty of Care limited to gross negligence or wilful misconduct by ICA; Debenture clause does not exclude liability.