K/S Preston Street v Santander (UK) Plc [2012] EWHC 1633 (Ch) (14 March 2012)

K/S Preston Street v Santander (UK) Plc [2012] EWHC 1633 (Ch) (14 March 2012)

Clause 6.2 of the loan agreement entitles the lender to recover losses actually incurred as a result of early redemption, but not future losses calculated on assumptions or contingencies. The indemnity covers losses suffered up to the date of demand, not speculative or contingent losses. The evidence is insufficient to quantify the losses at this stage, so summary judgment is not granted for the full sum claimed, and an enquiry is required to establish the actual losses.

Citation
[2012] EWHC 1633 (Ch)
Parties
Claimant: K/S Preston Street; Defendant: Santander (UK) PLC
Jurisdiction
England and Wales
Judgment Date
14 March 2012
Procedural Posture
Summary Judgment Application / Judgment on Cross Applications for Summary Judgment
Outcome
Summary judgment refused for both parties; defendant entitled in principle to recover losses actually incurred, but quantum to be determined at a future hearing.
Legal Topics
Loan Agreement Construction, Indemnity Clauses, Early Redemption, Escrow Arrangements
Contract Law Banking Law Loan Agreement Construction Indemnity Clauses Early Redemption Escrow Arrangements

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Parties

K/S Preston Street

Claimant

Santander (UK) PLC

Defendant

Procedural Posture

Summary Judgment Application / Judgment on Cross Applications for Summary Judgment

Legal Issues

  1. 1 Whether clause 6.2 of the loan agreement entitles the lender to recover losses resulting from early redemption
  2. 2 Whether losses under clause 6.2 include future losses or only losses actually incurred
  3. 3 Whether the escrow sum should be released to the claimant

Ratio Decidendi

Clause 6.2 of the loan agreement entitles the lender to recover losses actually incurred as a result of early redemption, but not future losses calculated on assumptions or contingencies. The indemnity covers losses suffered up to the date of demand, not speculative or contingent losses. The evidence is insufficient to quantify the losses at this stage, so summary judgment is not granted for the full sum claimed, and an enquiry is required to establish the actual losses.

Court Disposition

Summary judgment refused for both parties; defendant entitled in principle to recover losses actually incurred, but quantum to be determined at a future hearing.

Orders

  • Enquiry to establish actual losses incurred by the defendant up to the date of demand.
  • Escrow sum to remain pending conclusion of proceedings.