Habibsons Bank Ltd v Standard Chartered Bank (Hong Kong) Ltd
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE COOKE,Mr Justice Cooke |
| Judgment Date | 30 March 2010 |
| Neutral Citation | [2010] EWHC 702 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: FOLIO 566 OF 2009 |
| Date | 30 March 2010 |
[2010] EWHC 702 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Before: The Hon Mr Justice Cooke
Case No: FOLIO 566 OF 2009
Miss T Rosen Peacocke (instructed by Hugh Cartwright & Amin) for the Claimant
Mr C Harris (instructed by Lovells LLP) for the Defendant
Hearing date: 26 March 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Cooke:
Introduction
The claimant applies for permission to amend its claim in the form of Re-drafted Amended Particulars of Claim supplied to the defendant's solicitors on 17 th March 2010. There is a considerable history in these proceedings which commenced on 4 th February 2009 in the Chancery Division before transfer to the Commercial Court. On 30 th April 2009 the defendant issued an application to strike out the claim or alternatively for summary judgment in respect of it, on the basis that it disclosed no recognised cause of action and had no real prospect of success. The hearing of the application was listed for 30 th July 2009.
On 22 nd July 2009 the claimant served on the defendant an application notice seeking permission to amend its Particulars of Claim in the form of an exhibited draft which included all of the matters in the original Particulars as well as a large number of completely new allegations. The fixed hearing went off because of illness of counsel and was re-fixed for 20 th August 2009. In the interim the defendant filed a skeleton argument addressing the new allegations made in the draft Amended Particulars of Claim.
At the hearing on 20 th August 2009 before Teare J, there was only time to dispose of the claimant's application to strike out the existing claim form and Particulars of Claim, and not to deal with the draft amendments. In a judgment delivered on 20 th August 2009, Teare J dismissed the claim and ordered the claimant to pay the defendant's costs of the application on th3 indemnity basis. Paragraph 3 of the order provided that the order for dismissal should not be carried into effect “pending the determination of the claimant's application of 20 th July 2009 for permission to amend the Particulars of Claim in the form of the draft attached hereto, or further order”.
The defendant heard nothing from the claimant until December 2009 and then on 15 th December 2009 the matter was listed to be heard on 26 th March 2010.
Sometime after 1630 hours on 17 th March 2010, the claimant served the Re-drafted Amended Particulars of Claim, for which it now seeks permission to amend (the Revised draft). This completely replaced the previous draft Amendment. In correspondence it made clear that it was withdrawing its application to amend in the form of 22 nd July draft. It follows that the defendant is entitled to the costs of dealing with the application to amend in the form of 22 nd July draft and I so order.
The defendant submits that the revised application in respect of the Revised draft should not be permitted because the claim stood dismissed by Teare J and that part of the order dismissing the case was only not carried into effect pending the determination of the claimant's application of 22 nd July 2009 for permission to amend the Particulars of Claim in the form of the draft attached thereto, an application which has now been abandoned. I ruled against the defendant on the basis that the last words of the order, namely the words “or further order”, gave this court liberty to deal with a further version put forward by the claimant and that justice required that I should consider the claim as now framed, particularly since, if the action was dismissed, the defendant had made it plain that it would wish to argue, in any new action, that the rule in Henderson v Henderson applied to estop the claimant from making any claim against the defendant at all in relation to this dispute.
It remains however part of the defendant's submission that various points now being raised by the claimant have already been determined by Teare J and that it is therefore not open to the claimant to run them once again. Without deciding any point on issue estoppel, I decided to look at the substance of the matter in the new draft pleading.
The Underlying Facts
The underlying facts are set out conveniently in paragraphs 2–17 of the judgment of Teare J and those paragraphs can be taken as read for the purpose of this judgment.
It is clear that on those facts and for the reasons set out by Teare J, the position is that, whatever occurred beforehand, on 6 th October 2008 both parties signed a LMA Trade Confirmation and Transfer Certificate which for historic reasons was dated 29 th September 2008, referred to a Trade Date of 24 th September 2008 but in accordance with LMA practice provided for a settlement date 10 days after 6 th October, namely 16 th October 2008 which was therefore the date at which the purchase price fell to be determined. It was also the transfer date set out in the transfer certificate.
In accordance with clause 2 of the LMA terms, a binding contract was concluded, at the latest, by that point. This is of importance in the context of the application which the claimant now makes. It is also important to note that the claimant makes no allegation of fraud against the defendant. It does not allege that the defendant knew prior to 7 th October 2008 that an Emergency Order had been made by the District Court of Amsterdam under the Dutch Financial Supervision Act at 2210 hours on 6 th October, on an application made that day by DNB N.V. There is evidence from Ms Leung Yee Chun, the head of the defendant's Hong Kong Group Special Assets Management, that the defendant had no knowledge of the impending special regulatory emergency regime (akin to administration) prior to the service upon it of the court order on 7 th October 2008. Ms Chun also states that there had not been any event of default under the syndicated loan agreement prior to 6 th October 2008 and that there was no sum outstanding and unpaid by the borrower under the loan at that time. It was not until 16 th October that an Acceleration Notice was served on the borrower by the agent on behalf of the lenders and prior to that time the lenders had not taken the decision to accelerate the loan or enforce their rights in respect of it.
The Claim as now framed
Although the defendant identified eight contentions in the revised draft Amended Particulars upon which the claimant sought to avoid the transaction, in truth there were only 2 which were really the subject of any argument. I deal summarily with the others:—
11.1 The claimant alleged that the purported agreement made on the telephone on 24 th September 2008 was ineffective as the defendant believed that Standard Chartered Bank in London was the seller, when in fact it was not.
11.2 The purported 29 th September 2008 LMA Trade Confirmation and Transfer Certificate were also ineffective for the same reason (paragraph 68).
11.3 There was consequently no binding contract between the claimant and the defendant at the trade date of 24 th September 2008 (paragraph 69).
These points have no relevance because the claimant entered into a binding contract on 6 th October 2008 by executing and returning the LMA Trade Confirmation. From that moment, whatever happened earlier, there was a binding and effective agreement between the parties in respect of the assignment of the tranche of the syndicated loan. Moreover, since that Trade Confirmation document referred to the trade date as 24 th September, being the date of the original conversation, the claimant thereby agreed that this was the case.
The claimant's fourth contention in the revised draft was that the revised LMA Confirmation and Transfer Certificate signed by both parties on 6 th October 2008 failed correctly to record the terms of the trade or to comply with the LMA conditions by recording the trade date of 24 th September 2008, by bearing the date 29 th September though the document was not created until 6 th October and by recording a settlement date and transfer date of 16 th October 2008 when no such date had actually been agreed orally (paragraph 70 of the re-draft). Once again this point is met by the simple fact that the claimant executed and returned the documents, therefore accepting the terms of the document or waiving any errors in them. I am in entire agreement with Teare J in his findings in relation to this contract in paragraphs 27, 33, 38, 40, 41, 44 and 48 of his judgment.
Leaving aside the fifth contention for the moment, I move on to the sixth contention which was that, after learning of the Emergency order, the defendant sought the agreement of the claimant to alter the transfer date from 16 th October to 10 th October and in doing so failed to represent the true position between the borrower and the lenders, omitted crucial information as to the borrowers insolvency and failed to state that the trade was now a trade of distressed debt, rather than a par trade and also misrepresented the parties’ positions and the reasons for seeking to advance the completion date for the transaction.
This plea is of no consequence since the parties had already entered into a contract and no agreement to vary the transfer date resulted. There was no misrepresentation inducing a contract and in any event the terms of clause 17.1, 17.2, 17.3 and 17.5 of the LMA terms mean that no such claim could succeed, even if any misrepresentation or failure to supply information is established....
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