Irish Bank Resolution Corporation Ltd (in Special Liquidation) v Camden Market Holdings Corporation and Others

JurisdictionEngland & Wales
JudgeLord Justice Beatson,Lord Justice Sales,Lord Justice Longmore
Judgment Date19 January 2017
Neutral Citation[2017] EWCA Civ 7
Docket NumberCase No: A3/2015/1408
CourtCourt of Appeal (Civil Division)
Date19 January 2017

[2017] EWCA Civ 7

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

HIS HONOUR JUDGE MARK RAESIDE QC

[2014] EWHC 2319 (Ch)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Longmore

Lord Justice Beatson

and

Lord Justice Sales

Case No: A3/2015/1408

Between:
Irish Bank Resolution Corporation Limited (In Special Liquidation)
Appellant
and
(1) Camden Market Holdings Corp
(2) Camden Market Estate Holdings Limited
(3) Triangle Upper Limited
(4) Ground Gilbey Limited
(5) Triangle Extension's Limited
(6) Canal Side Properties Limited
(7) Piazza (Camden) Limited Partnership
(8) Upper Piazza (Camden) Limited Partnership
Respondent

Anthony Zacaroli QC, Stephen Robins (instructed by Linklaters LLP) for the Appellant

Alan Gourgey QC, Thomas Robinson (instructed by Herbert Smith Freehills LLP) for the Respondent

Hearing dates: 8 December 2016

Approved Judgment

Lord Justice Beatson

I. Introduction:

1

The Irish Bank Resolution Corporation Limited ("IBRC") is a bank incorporated in the Republic of Ireland, now in a special statutory liquidation. It appeals against the order of HHJ Raeside QC dated 8 May 2014 in the Chancery Division dismissing its application for summary judgment or alternatively the striking out of a claim brought against it by the respondents, the Camden Market Group, for breach of contract. The claim against IBRC was based on an alleged implied term in an agreement dated 5 November 2012, "the 2012 Supplemental Deed", made in connection with a Facilities Agreement between members of the Camden Market Group and IBRC under which IBRC provided a loan of some £195 million to members of the Group to purchase and develop properties at Camden Market.

2

IBRC's case is that the implied term pleaded and relied on by the Camden Market Group is inconsistent with the express terms of clause 26 of the Facilities Agreement, originally entered into in 2005, and restated by an amendment and restatement deed dated 26 November 2008 ("the Restated Facilities Agreement"). The Restated Facilities Agreement was incorporated into the 2012 Supplemental Deed. The first respondent is the guarantor under the Restated Facilities Agreement and the other seven respondents are companies and limited partnerships, the second to sixth of which are its subsidiaries and the borrowers under the agreement.

3

The dispute arose after IBRC was placed in special liquidation on 7 February 2013 by an order of the Irish Minister of Finance pursuant to the Irish Bank Resolution Corporation Act 2013. Two partners of KPMG were appointed as special liquidators. The Minister instructed them to sell off IBRC's loan book, and they began marketing its loans, including those to the Camden Market Group, who were themselves marketing the properties they were developing.

4

On 14 October 2013, the Camden Market Group commenced proceedings against IBRC. The implied term of the Restated Facilities Agreement which was pleaded is set out at [13] below. It is that IBRC should not do anything to hinder the Group's marketing of the properties they were developing to achieve the best price "by marketing the 'sale' of the loans under the … Facilities Agreement in competition …" with the Group. On 6 February 2014 IBRC applied for summary judgment or to strike out the claim. It maintained that the claim had no real prospects of success because clause 26 of the Restated Facilities Agreement expressly permitted it to market the loans for sale and to provide information about them to any potential buyer, and no implied term can be inconsistent with the express terms of the contract in question. Clause 26 is set out in the Appendix to this judgment.

II. The factual and contractual background:

5

The proposed development is of Stables Market, Camden, and land at Camden Lock Village located on the canal opposite Stables Market. The Camden Market Group entered into the 2005 Facilities Agreement with IBRC's predecessor, the Anglo Irish Bank. The purpose of the agreement and the loans made under it was to finance the development of parts of Stables Market, the acquisition of the land at Camden Lock Village, and to assist with the costs of the process of obtaining planning permission. The second, third and fourth respondents were the borrowers under the Facilities Agreement, and the first respondent, incorporated in the British Virgin Islands and their parent company, was a guarantor. The maturity date of the agreement was originally 14 July 2010. The agreement was amended by other agreements between 2007 and 2009. The 2007 and 2008 agreements added the sixth, seventh and eighth respondents as borrowers and guarantors. The loans made available under the agreements were secured on the Camden Market Estate. The Restated Facilities Agreement dated 26 November 2008 amended and restated the Facilities Agreement and extended the period of the loan by providing for a final maturity date of 28 February 2013. The 2009 agreement added other companies in the Camden Market group as guarantors.

6

The Restated Facilities Agreement defines itself and a number of other specified documents, including any document so designated, as "Finance Documents". Clause 26.1(a) expressly permits IBRC to "assign any of its rights … under any Finance Document to another bank or financial institution …". By clause 26.2(a), before IBRC makes an assignment under clause 26.1 the consent of the first respondent (defined as the "parent") must be obtained. Clause 26.8(a) empowers IBRC to disclose "any information about" the Camden Market Group and the Finance Documents as it considers appropriate, to any person to whom IBRC assigns or transfers or may potentially assign or transfer all or any of its rights under the Finance Documents but the person to whom the information is to be disclosed must enter a confidentiality undertaking.

7

The process for obtaining planning permission was more complicated than the Camden Market Group anticipated and progress was delayed. In March 2012 planning permission for the Camden Lock Village development was refused, but the Group believed that, if they made the changes requested by the planning authority and undertook a community engagement plan, they would obtain planning permission. They had previously decided that they would repay the loan by selling the properties rather than by refinancing and had informed IBRC of this. Their advisers, Jones Lang LaSalle, provided them with a "red book" valuation which valued the properties at £370 million without planning permission and £395 million with permission, but they considered that the commercial price would be higher.

8

In view of the need to obtain planning permission, the Camden Market Group considered they would not have time to market and sell the properties before 28 February 2013, the final maturity date of the Restated Facilities Agreement. They therefore sought and obtained a twelve-month extension to the agreement. In clause 3.1 of the 2012 Supplemental Deed the parties agreed to vary the final maturity date to 28 February 2014, and clause 2 provided for a new loan facility of £10 million in two tranches. Mr Alper, the managing director of Stanley Sidings Ltd., a subsidiary of the first respondent, who was dealing with the marketing of the properties, stated that this was far in excess of the fees a bank would charge for an extension to a facility agreement and the fee charged for the three-year extension in 2008. On behalf of IBRC, Mr Zacaroli QC submitted that the £10 million was in effect IBRC's fee for the extension. On behalf of the Camden Market Group, and in the light of Mr Alper's evidence, Mr Gourgey QC submitted it was a payment reflecting an agreement that IBRC would get a share of the profit of the future proposed sale of the Camden Market Estate in the sense (see skeleton argument paragraph 81) that giving the Camden Market Group time to obtain planning permission would result in an increased profit from a subsequent sale.

9

As to the other material provisions of the 2012 Supplemental Deed, Clause 3.2 stated:

"[S]ave as amended by this deed, the Restated Facilities Agreement shall remain in full force and effect", that "nothing contained in this deed shall discharge the liability of the Obligors or any other person party to a Finance Document to meet any of its obligations under the Restated Facilities Agreement or the other Finance Documents, which shall each remain in full force and effect".

Clause 4, entitled "Exit Strategy", required the Camden Market Group to submit the revised planning application on or before 31 December 2012. It also required them to ensure that the properties were marketed for immediate sale by an agent approved by IBRC's English subsidiary, Anglo Irish Bank Corporation plc, within the earlier of six months from the receipt of unconditional planning permission or 30 September 2013. The Camden Market Group obtained planning permission on 31 January 2013, and began preparing to market the properties. Paragraph 7 of the Camden Market Group's amended particulars of claim plead that, as part of this process, it met a number of prospective purchasers.

10

Following the special liquidation of IBRC on 7 February 2013, a further agreement, dated 11 July 2013, was made extending the final maturity date of the loan to 30 June 2014. Before then, as a result of uncertainty as to whether IBRC's liquidators would try to sell the Restated Facilities Agreement, the Camden Market Group's solicitor wrote reminding IBRC of the obligation in clause 26 not to transfer the loan without the Group's consent. At some stage, IBRC acting on the instructions of the Irish Minister of Finance to sell off its loan book, began marketing all its loans, including the loan to the Camden Market Group.

11

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