''Shamji v Johnson Matthey Bankers Ltd''

991 Year 991 (Roman numerals, CMXCI) was a common year starting on Thursday (link will display the full calendar) of the Julian calendar. Events * March 1: In Rouen, Pope John XV ratifies the first Peace and Truce of God, Truce of God, between ...

BCLC 36 is a

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...

case concerning the administration procedure when a company is unable to repay its debts.

Facts

Shamji controlled a group of companies. They were in debt to JMB who had mortgages and guarantees. JMB wanted payment. The bank agreed to release the debt if Shamji paid £14m within 21 days and this could be extended by 14 days if the bank viewed negotiations as proceeding properly. Six days after the 21-day period, JMB appointed receivers. Shamji and the companies went to court for an injunction, arguing the bank had breached the contract. They argued there was a duty on JMB as mortgagee, when appointing a receiver, to consider relevant matters including the effect of an appointment on refinancing negotiations.

Judgment

High Court

Hoffmann J dismissed the appeal. He said the bank was entitled contractually to appoint receivers. It owed no duty of care when doing so to any mortgagor or guarantor. It was protecting its interests and could not be challenged.

Court of Appeal

Oliver LJ affirmed the decision of Hoffmann J. Nourse LJ agreed.

Notes

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References