The Royal Bank of Scotland Plc v MccArthy [2015] EWHC 3626 (QB) (21 December 2015)

The Royal Bank of Scotland Plc v MccArthy [2015] EWHC 3626 (QB) (21 December 2015)

Mr McCarthy is liable to repay the professional practice loan to RBS under the terms of the loan agreement. RBS did not procure a breach of contract by the LLP, as the evidence did not establish that the LLP would have repaid the loan but for RBS's actions, nor was there a collateral contract or implied term discharging Mr McCarthy's liability. Mr McCarthy cannot enforce the Letter of Undertaking as a third party under the Contracts (Rights of Third Parties) Act 1999. The claim is a straightforward debt claim and the defences fail.

Citation
[2015] EWHC 3626
Parties
Claimant: The Royal Bank of Scotland PLC; Defendant: Michael Patrick McCarthy
Jurisdiction
England and Wales
Judgment Date
21 December 2015
Procedural Posture
Debt Claim (contract) / High Court Trial Judgment
Outcome
Claim allowed
Legal Topics
Repayment of Professional Practice Loan, Procurement of Breach of Contract, Collateral Contract, Implied Terms, Third Party Rights Under Contract
Contract Law Banking Law Insolvency Law Repayment of Professional Practice Loan Procurement of Breach of Contract Collateral Contract Implied Terms Third Party Rights Under Contract

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Parties

The Royal Bank of Scotland PLC

Claimant

Michael Patrick McCarthy

Defendant

Procedural Posture

Debt Claim (contract) / High Court Trial Judgment

Legal Issues

  1. 1 Is Mr McCarthy liable to repay the professional practice loan to RBS upon his retirement from Halliwells LLP?
  2. 2 Did RBS procure a breach of contract by preventing Halliwells LLP from repaying the loan under the Retirement Deed and/or Letter of Undertaking?
  3. 3 Can Mr McCarthy enforce the Letter of Undertaking as a third party under the Contracts (Rights of Third Parties) Act 1999?

Ratio Decidendi

Mr McCarthy is liable to repay the professional practice loan to RBS under the terms of the loan agreement. RBS did not procure a breach of contract by the LLP, as the evidence did not establish that the LLP would have repaid the loan but for RBS's actions, nor was there a collateral contract or implied term discharging Mr McCarthy's liability. Mr McCarthy cannot enforce the Letter of Undertaking as a third party under the Contracts (Rights of Third Parties) Act 1999. The claim is a straightforward debt claim and the defences fail.

Court Disposition

Claim allowed

Orders

  • Judgment for RBS against Mr McCarthy for the sum of £120,000 plus interest and costs.