Kallakis v AIB Group Plc & Ors [2020] EWHC 460 (Comm) (28 February 2020)

Kallakis v AIB Group Plc & Ors [2020] EWHC 460 (Comm) (28 February 2020)

The court held that the claims in negligent misrepresentation by the claimant in his personal capacity, and claims based on assignment or derivative action of the trustee's personal claim, have a realistic prospect of success and should not be struck out or subject to summary judgment. Claims based on derivative actions on behalf of the SPVs and personal claims of the claimant for sale without legal authority and undervalue sale have no real prospect of success and are struck out. The reflective loss rule does not bar the trustee's personal claim in the present circumstances due to legal impossibility caused by the bank's conduct.

Citation
[2020] EWHC 460 (Comm)
Parties
Claimant: Michalis S. A. Kallakis; Defendant: AIB Group PLC; Defendant: AIB Group (UK) PLC; Defendant: Achilleas M. Kallakis; Defendant: Michael K. Becker; Defendant: Allied Irish Bank PLC
Jurisdiction
England and Wales
Judgment Date
28 February 2020
Procedural Posture
Commercial Court Claim / Summary Judgment And/or Strike Out Application
Outcome
Partially allowed
Legal Topics
Derivative Claims, Reflective Loss, Misrepresentation, Mortgagee's Duty of Care, Assignment of Claims, Strike Out and Summary Judgment, Trustee and Beneficiary Rights
Commercial Law Trusts Law Company Law Derivative Claims Reflective Loss Misrepresentation Mortgagee's Duty of Care Assignment of Claims +2 more

Case Brief

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Parties

Michalis S. A. Kallakis

Claimant

AIB Group PLC

Defendant

AIB Group (UK) PLC

Defendant

Achilleas M. Kallakis

Defendant

Michael K. Becker

Defendant

Allied Irish Bank PLC

Defendant

Procedural Posture

Commercial Court Claim / Summary Judgment And/or Strike Out Application

Legal Issues

  1. 1 Whether the claimant has a real prospect of success on claims in misrepresentation, sale without legal authority, and undervalue sale against the bank; whether claims based on derivative actions or assignments are viable; whether the reflective loss rule bars the claims; whether the claims should be struck out or summary judgment granted.

Ratio Decidendi

The court held that the claims in negligent misrepresentation by the claimant in his personal capacity, and claims based on assignment or derivative action of the trustee's personal claim, have a realistic prospect of success and should not be struck out or subject to summary judgment. Claims based on derivative actions on behalf of the SPVs and personal claims of the claimant for sale without legal authority and undervalue sale have no real prospect of success and are struck out. The reflective loss rule does not bar the trustee's personal claim in the present circumstances due to legal impossibility caused by the bank's conduct.

Court Disposition

Partially allowed

Orders

  • Claims in negligent misrepresentation by the claimant in his personal capacity, and claims based on assignment or derivative action of the trustee's personal claim, are not struck out and may proceed.
  • Claims based on derivative action on behalf of the SPVs and personal claims of the claimant for sale without legal authority and undervalue sale are struck out.