ABM Amro Commercial Finance Plc v McGinn & Ors
2014
COMMERCIAL COURT
United Kingdom
CORAM
- THE HONOURABLE MR JUSTICE FLAUX
Areas of Law
- Contract Law
- Commercial Law
- Civil Procedure
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
This case revolves around the claimant, who sought to recover debts from the directors of Jenks Sales Brokers Limited under deeds of indemnity. The court held that the liability under the deeds was primary, not secondary, making the defendants liable irrespective of material variations to the Agreement. Additionally, the court ruled that proofs of delivery constituted 'Financial Records' under the Agreement and upheld the validity of certificates of indebtedness as conclusive evidence. The defendants' claims that the claimant failed to properly collect debts were rejected, leading to a summary judgment in favor of the claimant.
Judgment
The Honourable Mr Justice Flaux:
Introduction
The claimant is a factor which purchased the debts of its client Jenks Sales Brokers Limited (referred to hereafter as “the company”) pursuant to an Agreement dated 30 June 2003. The defendants were the directors of the company. Each of them entered into a deed of indemnity with the claimant (dated 2 May 2007 in the case of the first and second defendants and 10 December 2008 in the case of the third defendant). In May 2009 the company entered administration and many debts were disputed. The claimant employed a specialist collection agent and when they had exhausted the collection process after some two years, the administrators of the company acknowledged in writing to the claimant that the company was indebted to the claimant in the sum of £8,924,783.
The claimant commenced these proceedings in April 2012 seeking to recover that sum from the defendants under the deeds of indemnity. The defendants served a Defence in June 2012 denying liability on a number of grounds including that their liability was secondary and not primary and their liability was discharged by material variations to the Agreement, that the claimants had not taken proper steps to collect and enforce the debts and that the claimant had represented to the company that it could continue to notify new debts as approved debts notwithstanding the knowledge that the invoices could not be guaranteed for full payment, so that the claimant is estopped from relying on its strict rights under the Agreement in respect of debts notified after 24 February 2009.
The claimant subsequently served certificates of indebtedness on the defendants originally dated 23 October 2013 which it contends are conclusive against the defendants by virtue of clause 3 of each of the deeds of indemnity. Accordingly on 7 November 2013 the claimant issued this application for summary judgment under CPR Part 24. For reasons set out in more detail below, the claimant no longer pursues a money judgment against any of the defendants at this stage, but it seeks judgment on a number of issues of construction and law on which it contends the defendants have no real prospect of success at trial. Those issues are set out at [18] below.
The terms of the Agreement and the deeds of indemnity
Before setting out the factual background to the application in more detail, I will set out the terms of the various agreements which are relevant for the purposes of this application