Close Brothers Ltd v AIS (Marine) 2 Ltd [2018] EWHC 4061 (Admlty) (17 September 2018)

Close Brothers Ltd v AIS (Marine) 2 Ltd [2018] EWHC 4061 (Admlty) (17 September 2018)

The court found that the vessel was not sold at an undervalue; the sale price, though on the low side, was within the reasonable market range as established by credible expert evidence. The burden of proof remained on the Second Defendant, who failed to show the sale was at an improperly low price or that the Claimant breached its duty. The Claimant was entitled to judgment for the shortfall, subject to assessment of sale cost deductions.

Citation
[2018] EWHC 4061 (Admlty)
Parties
Claimant: Close Brothers Limited; First Defendant: AIS (Marine) 2 Limited; Second Defendant: Paul Simon Chandler
Jurisdiction
England and Wales
Judgment Date
17 September 2018
Procedural Posture
Civil (commercial) / Trial Judgment
Outcome
Judgment for the Claimant in a sum to be assessed after further submissions on sale cost deductions.
Legal Topics
Ship Mortgage Enforcement, Personal Guarantee Liability, Mortgagee's Duty of Care in Sale, Sale at Undervalue, Equitable Duties of Mortgagee, Assessment of Sale Proceeds and Costs
Banking and Finance Maritime Law Insolvency Ship Mortgage Enforcement Personal Guarantee Liability Mortgagee's Duty of Care in Sale Sale at Undervalue Equitable Duties of Mortgagee +1 more

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Parties

Close Brothers Limited

Claimant

AIS (Marine) 2 Limited

First Defendant

Paul Simon Chandler

Second Defendant

Procedural Posture

Civil (commercial) / Trial Judgment

Legal Issues

  1. 1 Whether the Claimant is entitled to recover the outstanding shortfall from the First Defendant and/or the Second Defendant under the personal guarantee
  2. 2 Whether the sale of the mortgaged vessel was at an undervalue and if so, whether the Claimant breached its duty to obtain the best price reasonably obtainable
  3. 3 Whether the sale costs deducted from the proceeds were reasonable and properly proved

Ratio Decidendi

The court found that the vessel was not sold at an undervalue; the sale price, though on the low side, was within the reasonable market range as established by credible expert evidence. The burden of proof remained on the Second Defendant, who failed to show the sale was at an improperly low price or that the Claimant breached its duty. The Claimant was entitled to judgment for the shortfall, subject to assessment of sale cost deductions.

Court Disposition

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

Orders

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