Neil Levy

D - Duress

15/3/23

THE LAW DEBENTURE TRUST CORPORATION PLC v UKRAINE [2023] UKSC 11

Contains a useful summary of general principles of actual and ostensible authority [38] and duress [136]. On an application for summary judgment to enforce payment of notes issued by Ukraine to the Russian Federation, a defence that the notes had been signed without authority failed. The Minister of Finance of Ukraine had ostensible authority to issue notes. The imposition of trade restrictions on Ukraine by Russia was not capable of establishing a defence of economic duress in English law but the threatened use of force by Russia against Ukrainian citizens and property was, and would have to be determined at a trial.

27/1/20

MORLEY v THE ROYAL BANK OF SCOTLAND PLC [2020] EWHC 88 (Ch)

A bank has a duty of reasonable care in providing lending services. Compliance with regulatory standards is relevant to whether the duty is breached, but compliance with the bank’s internal policies may not be [156-7]. An ordinary loan facility is not a relational contract [159]. In demanding repayment a bank exercises a right, not a discretionary power. Powers to require security to be re-valued and to charge default interest were discretionary but had not been exercised for improper purposes or maliciously [160]. A threat to appoint receivers to sell the security to a subsidiary of the bank might have been an unlawful threat defectively to perform the bank’s duties as mortgagee. But the threat was not “unequivocally unlawful” because the court might not have restrained the sale had an injunction been sought at the time. Claims of economic duress and intimidation therefore failed. In any event, the agreements entered into had been affirmed by the claimant.

21/5/19

TIMES TRAVEL (UK) LTD v PAKISTAN INTERNATIONAL AIRLINES CORPORATION [2019] EWCA Civ 828

Duress does not extend to the use of lawful pressure to achieve a result to which the person exercising pressure believes in good faith it is entitled, and that is so whether or not, objectively speaking, it has reasonable grounds for that belief.

30/11/18

McDONAGH v BANK OF SCOTLAND PLC [2018] EWHC 3262 (Ch)

On its proper interpretation a loan agreement required payment in Euros, not in Sterling as the claimant had argued. Had it been necessary, the agreement would have been rectified to that effect. A subsequent agreement had been effective to vary the terms of the loan agreement without any further draw down and a claim to set aside the subsequent agreement for economic duress failed, as did a claim for damages for intimidation. The bank had done nothing illegitimate, inequitable or unconscionable [119]. A further claim that receivers acted in breach of duty in selling the security for the loan as part of a portfolio of properties belonging to other borrowers, also failed. Although accounting issues might arise as to the correct apportionment of the proceeds of a portfolio sale, no claim for an account had been made [132]. A portfolio sale would not necessarily involve a breach of duty so long as the receivers reasonably considered such a sale was in the best interests of the mortgagor [149] as well as being in the interests of the mortgagee. On the facts, the receivers had satisfied that test in this case [193].

14/6/17

TIMES TRAVEL (UK) LTD v PAKISTAN INTERNATIONAL AIRLINES CORPORATION [2017] EWHC 1367 (Ch)

Considers applicable principles to make out a collateral contract [234] and economic duress [248-255].

5/10/12

BANK OF INDIA v RIAT (Ch D)

Considered defences of misrepresentation and economic duress to claims on guarantees.

27/7/12

NATIONAL MERCHANT BUYING SOCIETY LTD v BELLAMY [2012] EWHC 2563 (Ch)

Good consideration can be given for a guarantee even if the parties are not conscious of it. Extrinsic evidence can also be given of consideration not expressed in the guarantee. A threat to withdraw credit facilities unless a guarantee was signed was not economic duress because the creditor had the right to withdraw the facilities so the threat was legitimate. The creditor had no duty to advise the intending guarantor to take separate advice independent advice before signing. A later request for a new guarantee had not been a repudiation of the existing guarantee. Nor did a subsequent variation in the terms of the facilities discharge the guarantor because the guarantee covered all obligations of the company, present or future and there was nothing in the surrounding circumstances to imply any limitation.

Bank Notes