Close Brothers Ltd v AIS (Marine) 2 Ltd & Anor, Re: OCEAN WIND 8 [2018] EWHC B14 (Admlty) (17 September 2018)

Close Brothers Ltd v AIS (Marine) 2 Ltd & Anor, Re: OCEAN WIND 8 [2018] EWHC B14 (Admlty) (17 September 2018)

The vessel was not sold at an undervalue; the Claimant took reasonable care to obtain the best price reasonably obtainable in the prevailing market conditions. The Second Defendant failed to discharge the burden of proving a breach of duty or that the sale price was materially below market value. The Claimant is entitled to judgment for the shortfall, subject to assessment of proper deductions for sale costs.

Citation
[2018] EWHC B14 (Admlty)
Parties
Claimant: Close Brothers Limited; First Defendant: AIS (Marine) 2 Limited (in liquidation); Second Defendant: Mr Paul Simon Chandler
Jurisdiction
England and Wales
Judgment Date
17 September 2018
Procedural Posture
Admiralty Claim for Shortfall Under Ship Mortgage and Guarantee / Judgment After Trial
Outcome
Judgment for the Claimant in a sum to be assessed after submissions on sale cost deductions.
Legal Topics
Ship Mortgage Enforcement, Personal Guarantee Liability, Mortgagee's Duty on Sale, Sale at Undervalue, Equitable Duties of Mortgagee, Assessment of Sale Proceeds and Costs
Admiralty Banking and Finance Insolvency Ship Mortgage Enforcement Personal Guarantee Liability Mortgagee's Duty on Sale Sale at Undervalue Equitable Duties of Mortgagee +1 more

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Parties

Close Brothers Limited

Claimant

AIS (Marine) 2 Limited (in liquidation)

First Defendant

Mr Paul Simon Chandler

Second Defendant

Procedural Posture

Admiralty Claim for Shortfall Under Ship Mortgage and Guarantee / Judgment After Trial

Legal Issues

  1. 1 Whether the vessel was sold at an undervalue breaching the mortgagee's duty
  2. 2 Whether the Claimant is entitled to recover the shortfall from the Second Defendant under the guarantee
  3. 3 Whether sale costs were properly deducted from the proceeds

Ratio Decidendi

The vessel was not sold at an undervalue; the Claimant took reasonable care to obtain the best price reasonably obtainable in the prevailing market conditions. The Second Defendant failed to discharge the burden of proving a breach of duty or that the sale price was materially below market value. The Claimant is entitled to judgment for the shortfall, subject to assessment of proper deductions for sale costs.

Court Disposition

Judgment for the Claimant in a sum to be assessed after submissions on sale cost deductions.

Orders

  • Claimant to provide a schedule of sale cost deductions; Defendant to respond; any dispute to be resolved at further hearing before final assessment of sum due.