McKay (t/a Mckay Law Solicitors And Advocates) v Centurion Credit Resources LLC

McKay (t/a Mckay Law Solicitors And Advocates) v Centurion Credit Resources LLC

The Loan Agreement conferred on the defendant a residual discretion to refuse to make advances, even after satisfaction of conditions precedent, provided the discretion was exercised rationally and not capriciously. The defendant's refusal to make the advance was commercially justified and not irrational. The claimant had not satisfied all conditions precedent, including delivery of evidence of Key Man insurance and satisfactory ATE insurance/reinsurance. There was no unequivocal waiver by the defendant of these requirements. The defendant did not repudiate the Loan Agreement.

Parties
Claimant: Simon Arthur Samuel McKay (t/a McKay Law Solicitors and Advocates); Defendant: Centurion Credit Resources LLC
Jurisdiction
England and Wales
Judgment Date
06 December 2011
Procedural Posture
Civil (contract) / Judgment on Liability
Outcome
Claim dismissed
Legal Topics
Loan Agreements, Discretionary Powers, Conditions Precedent, Repudiation, Waiver, Estoppel
Contract Law Loan Agreements Discretionary Powers Conditions Precedent Repudiation Waiver Estoppel

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Parties

Simon Arthur Samuel McKay (t/a McKay Law Solicitors and Advocates)

Claimant

Centurion Credit Resources LLC

Defendant

Procedural Posture

Civil (contract) / Judgment on Liability

Legal Issues

  1. 1 Whether the defendant was entitled to decline to make the first advance under the Loan Agreement when requested by the claimant
  2. 2 Whether the defendant's discretion to refuse an advance was absolute or constrained
  3. 3 Whether the claimant satisfied the conditions precedent for requesting an advance

Ratio Decidendi

The Loan Agreement conferred on the defendant a residual discretion to refuse to make advances, even after satisfaction of conditions precedent, provided the discretion was exercised rationally and not capriciously. The defendant's refusal to make the advance was commercially justified and not irrational. The claimant had not satisfied all conditions precedent, including delivery of evidence of Key Man insurance and satisfactory ATE insurance/reinsurance. There was no unequivocal waiver by the defendant of these requirements. The defendant did not repudiate the Loan Agreement.

Court Disposition

Claim dismissed