Bank Notes

R - Relief from forfeiture

19/3/20

LOMBARD NORTH CENTRAL PLC v EUROPEAN SKYJETS LTD [2020] EWHC 679 (QB)

When the claimant demanded repayment of a loan it had wrongly believed there were arrears of $300k when the arrears were only $179.99. The court allowed an appeal against a refusal to set aside a default judgment. It was arguable with a real prospect of success that the arrears had been de minimis [45], that the claimant had a duty to state the debt with reasonable accuracy [47], or that there was an estoppel preventing the claimant relying on the lower sum as a default [48]. Discusses arguments that the contract contained penalties or that the defendant could seek relief from forfeiture [50] [57]. The fact that the arrears were so small also meant there was “some other” reason to set aside the judgment. Considers the impact of delay in applying to set aside the judgment [106] and considerations common to set aside and summary judgment applications [120].

29/7/13

CUKUROVA FINANCE INTERNATIONAL LTD v ALFA TELECOM TURKEY LTD [2013] UKPC 25

It is inherent in an order granting a mortgagor relief from forfeiture that the terms can be extended or varied. Time for redemption may be extended if it is just and equitable. On the facts it was appropriate to extend time and suspend the running of interest because the mortgagee had, for its own collateral reasons, been taking steps designed to thwart the mortgagor’s attempts to raise money to redeem.

9/7/13

CUKOROVA FINANCE INTERNATIONAL LTD v ALFA TELECOM TURKEY LTD [2013] UKPC 20

The claimant defaulted on a loan secured on shares. The defendant exercised its right to appropriate the shares. The claimant had been held entitled to relief from forfeiture in respect of the shares. When considering the terms on which the right was to be exercised, it was held by a majority that the claimant was only required to pay interest at the standard contract rate, not the higher default rate, because the circumstances were exceptional. The claimant had tendered full repayment within a month of the default, the defendant was to be regarded as having refused to accept payment, and the claimant had paid the money into an interest bearing escrow account pending acceptance.

30/1/13

CUKUROVA FINANCE INTERNATIONAL LTD v ALFA TELECOM TURKEY LTD [2013] UKPC 2

The defendant had been entitled in its discretion to conclude that events had occurred having a material adverse effect in the claimant’s financial conduct, thereby triggering an event of default and giving the defendant the right to enforce a charge on shares. In doing so the defendant had a duty to act for a proper purpose. It had done so by appropriating the shares for the proper purpose of satisfying the debt. The fact that the defendant also wished to use the shares to obtain control of a company was a collateral purpose and did not cause the purpose of enforcement to be improper. But the court’s power to grant relief from forfeiture is not limited to mortgages of land and relief would be allowed on terms to be determined by the court.