Close Brothers Ltd v AIS (Marine) 2 Ltd

Close Brothers Ltd v AIS (Marine) 2 Ltd

The Claimant is entitled to judgment against the Second Defendant as the evidence does not establish that the Vessel was sold at an undervalue. The sale price was within the reasonable market range, the sale process was adequate, and the Second Defendant failed to discharge the burden of proving breach of duty or loss. The guarantee is enforceable for the outstanding shortfall, subject to assessment of sale cost deductions.

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
Civil (admiralty/mortgage Enforcement) / 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, Duties of Mortgagee on Sale, Personal Guarantee Liability, Sale at Undervalue, Equitable Duties in Mortgage Sales
Admiralty Banking and Finance Insolvency Ship Mortgage Enforcement Duties of Mortgagee on Sale Personal Guarantee Liability Sale at Undervalue Equitable Duties in Mortgage Sales

Case Brief

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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

Civil (admiralty/mortgage Enforcement) / Judgment After Trial

Legal Issues

  1. 1 Whether the Claimant is entitled to recover the outstanding loan shortfall from the Second Defendant under the personal guarantee
  2. 2 Whether the Vessel was sold at an undervalue in breach of the mortgagee's equitable duty
  3. 3 Whether the sale process and costs were reasonable and properly proved

Ratio Decidendi

The Claimant is entitled to judgment against the Second Defendant as the evidence does not establish that the Vessel was sold at an undervalue. The sale price was within the reasonable market range, the sale process was adequate, and the Second Defendant failed to discharge the burden of proving breach of duty or loss. The guarantee is enforceable for the outstanding shortfall, subject to assessment of sale cost deductions.

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 a further hearing before final sum is fixed.