Bank Notes

August 2014

29/8/14

FERN COMPUTER CONSULTANCY LTD v INTERGRAPH CADWORX & ANALYSIS SOLUTIONS INC [2014] EWHC 2908 (Ch)

For a claim to be made under the Commercial Agents (Council Directive) Regs 1993, the agency contract must be governed by English law. Failure to pay sums due under the Regs may be a breach of statutory duty and equivalent to a tort.

27/8/14

BAILEY v BARCLAYS BANK PLC [2014] EWHC 2882 (QB)

The bank informed an individual borrower that substantial breakage fees would be payable if he terminated a swap agreement early but that he could avoid that liability by novating the swap to a company associated with him. This was done. The company brought proceedings against the bank for mis-selling the swap. On cross-applications the court refused the company for permission to amend, and granted the bank summary judgment dismissing the claim. Any claim to rescind the swap for misrepresentation made when the borrower took it out could not be asserted after the novation, because the novation was a new agreement. The bank had not breached the FSA Conduct of Business Rules in connection with the novation. It had acted in a non-advisory capacity without making any personal recommendation. The Company had understood what was involved in the swap and knew the risks by the time of the novation. The Company could not assert a cause of action under s 150 FSMA 2000 because it was not a private person. The COBS rules had not been incorporated in the contract between the bank and the company and the bank had not engaged in duress or other unconscionable conduct.

21/8/14

THE CO-OPERATIVE BANK PLC v PHILLIPS [2014] EWHC 2862 (Ch)

A bank with a second charge discontinued possession proceedings in circumstances where there was no equity in the mortgaged property after the first charge. The mortgagor applied for the bank to pay his costs on the indemnity basis arguing that the bank had brought the proceedings for an improper purpose. The court reviewed the principles relating to the exercise of a mortgagee’s power for proper purposes [38] and held that it was not improper or an abuse of process for the bank to take proceedings to put pressure on the mortgagor to make payments to the bank. But on the true construction of the charge, the bank was not entitled to payment by the mortgagor of costs which were unreasonably incurred. On the evidence the bank’s costs of the proceedings had been unreasonably incurred and the bank had no right to seek to set them off against liabilities of the mortgagor to the bank.