Porter Capital Corporation v Masters

Porter Capital Corporation v Masters

Porter is entitled, under Connecticut law and the CFA, to appropriate payments first to interest and fees, then to principal, to charge back unpaid invoices, and to revisit fees in the restated account, subject to Mr Masters raising specific defences on the taking of the account. Estoppel, waiver, and lack of notice do not bar Porter in principle, and the CFA constitutes secured lending, not a 'true sale' of receivables.

Parties
Claimant: Porter Capital Corporation; Defendant: Zulfikar Masters
Jurisdiction
England and Wales
Judgment Date
06 September 2017
Procedural Posture
Commercial Claim (guarantee Enforcement) / Trial of Preliminary Issues
Outcome
Issues decided in favour of Porter, subject to proviso that Mr Masters may raise specific defences on the taking of the account.
Legal Topics
Guarantees, Appropriation of Payments, Charge Backs, Estoppel, Waiver, Connecticut Law, Restatement of Accounts, Fees and Collection Expenses
Contract Law Commercial Law Banking Law Guarantees Appropriation of Payments Charge Backs Estoppel Waiver +3 more

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Parties

Porter Capital Corporation

Claimant

Zulfikar Masters

Defendant

Procedural Posture

Commercial Claim (guarantee Enforcement) / Trial of Preliminary Issues

Legal Issues

  1. 1 How payments received by Porter are to be appropriated under the CFA and Connecticut law
  2. 2 Whether invoices factored to Porter can be charged back
  3. 3 Whether Porter can revisit fees charged and recorded in its accounts

Ratio Decidendi

Porter is entitled, under Connecticut law and the CFA, to appropriate payments first to interest and fees, then to principal, to charge back unpaid invoices, and to revisit fees in the restated account, subject to Mr Masters raising specific defences on the taking of the account. Estoppel, waiver, and lack of notice do not bar Porter in principle, and the CFA constitutes secured lending, not a 'true sale' of receivables.

Court Disposition

Issues decided in favour of Porter, subject to proviso that Mr Masters may raise specific defences on the taking of the account.

Orders

  • Counsel to agree an order reflecting these rulings.
  • Mr Masters may raise defences relating to lack of notice, waiver, limitation, laches, and CFA compliance on the taking of the account.