Campden Hill Ltd v Chakrani & Ors [2005] EWHC 911 (Ch) (13 May 2005)

Campden Hill Ltd v Chakrani & Ors [2005] EWHC 911 (Ch) (13 May 2005)

Mr Chakrani did not authorise the loan transaction; his signature was forged by Mrs Karim. The Karim defendants are liable to the claimant for deceit, breach of undertaking, and breach of warranty of authority. The claimant is entitled to recover the £500,000 loaned with interest, but the facility fee is only recoverable to the extent of an 80% chance, reflecting the likelihood that it would have been enforceable and not struck down as extortionate under the Consumer Credit Act 1974.

Citation
[2005] EWHC 911 (Ch)
Parties
Claimant: Campden Hill Limited; Defendant: Fazil Chakrani; Defendant: Saira Karim; Defendant: Imran Karim; Defendant: Zahida Baloch; Defendant: Shahida Baloch; Defendant: Mohammed Iqbal; Defendant: Shamim Akhtar Karim; Defendant: HM Land Registry
Jurisdiction
England and Wales
Judgment Date
13 May 2005
Procedural Posture
Chancery Division Civil Claim / Judgment After Trial
Outcome
Judgment for the claimant against the Karim defendants for £500,000 plus interest and 80% of the facility fee; tracing claim not finally determined; claim against Mr Chakrani for repayment of sums received succeeds to the extent of funds traced.
Legal Topics
Forgery of Documents, Breach of Warranty of Authority, Deceit, Tracing of Funds, Extortionate Credit Bargains, Consumer Credit Act, Law of Property (miscellaneous Provisions) Act 1989, Damages Assessment
Property Law Contract Law Fraud Equity and Trusts Forgery of Documents Breach of Warranty of Authority Deceit Tracing of Funds +4 more

Case Brief

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Parties

Campden Hill Limited

Claimant

Fazil Chakrani

Defendant

Saira Karim

Defendant

Imran Karim

Defendant

Zahida Baloch

Defendant

Shahida Baloch

Defendant

Mohammed Iqbal

Defendant

Shamim Akhtar Karim

Defendant

HM Land Registry

Defendant

Procedural Posture

Chancery Division Civil Claim / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Chakrani authorised the loan and charge
  2. 2 Whether Mrs Karim forged Mr Chakrani's signature
  3. 3 Liability of Karim defendants for breach of warranty of authority and deceit

Ratio Decidendi

Mr Chakrani did not authorise the loan transaction; his signature was forged by Mrs Karim. The Karim defendants are liable to the claimant for deceit, breach of undertaking, and breach of warranty of authority. The claimant is entitled to recover the £500,000 loaned with interest, but the facility fee is only recoverable to the extent of an 80% chance, reflecting the likelihood that it would have been enforceable and not struck down as extortionate under the Consumer Credit Act 1974.

Court Disposition

Judgment for the claimant against the Karim defendants for £500,000 plus interest and 80% of the facility fee; tracing claim not finally determined; claim against Mr Chakrani for repayment of sums received succeeds to the extent of funds traced.

Orders

  • Karim defendants to pay £500,000 to claimant with interest under section 35A of the Supreme Court Act 1981.
  • Karim defendants to pay 80% of the £200,000 facility fee as damages for breach of warranty of authority.