Promissory Note in UK Law

Stopping there, it is quite plain to me that Mr. Najjar was liable to pay the first of the promissory notes. We have repeatedly said in this Court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary. It is suggested that, on the first note, there was a failure of consideration. They were, they say, ordering goods from their suppliers and getting on with the work.

In civil as well as in criminal law, the state of mind of the defendant is naturally a relevant consideration where the question is whether the defendant has acted wrongfully. But the factors which render a contract defective and make it just to require contractual benefits to be restored are not limited to cases where the defendant has acted wrongfully.

In closing submissions Mr Rees QC on behalf of Sheikh Tahnoon argued that Mr Kent cannot on any view rescind the promissory note alone. Mr Rees cited Molestina v Ponton [2001] CLC 1412 for the proposition that a contract which forms an inseparable part of a larger transaction cannot be separately rescinded. In the face of this authority, Mr Kent abandoned his claim to rescind the promissory note.

It is not concerned in the least with the relations between the supplier and the customer; nor with the question whether the supplier has performed his contracts obligation or not; nor with the questionwhether the supplier is in default or not. The bank must pay according to its guarantee, on demand, if so stipulated, without proof or conditions. The only exception is when there is a clear fraud of which the bank has notice.

A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal.

The remaining and most serious question is whether the vendor did not have an unpaid vendor's lien. Such a lien arises in the ordinary course in favour of a vendor who has not received the purchase money and it is the creature of the law and does not depend upon contract or possession. It depends on the fact that the vendor has alright to specific performance of his contract.

This, I interpose, is the real reason why there is no "conceptual problem" about treating BFC as subrogated to part of the RTB secured debt. The equitable remedy is available only against OOL, which is the only party which would be unjustly enriched. The equitable remedy is available only against OOL, which is the only party which would be unjustly enriched.