GB - Bathija v Lloyds TSB Bank Plc

Judgment

Judge Behrens :

1 Introduction

At all material times Mr Bathija was the sole shareholder and director of Global Travel Agency Ltd (“Global”). Global was incorporated on 22 December 1994 and traded as a Travel Agency with a particular specialism in the supply of flights to the general public, from premises at 104 Queensway, London, W2 3RR.

Global was a member of the International Air Transport Association ("IATA"). As part of that membership Global was a member of the BSP Link Scheme which allowed members such as Global to issue travel tickets on behalf of member airlines. Payment for those tickets would be settled once a month (17th of each month) by a direct debit payment to IATA.

Global became a customer of Lloyds TSB Bank plc (“Lloyds”) in 1994. From 2008 Global had the benefit of an overdraft facility (“the Facility”) with Lloyds. The extent of the Facility varied throughout the years, starting at £260,000. In January 2011, the applicable Facility was £150,000. The Facility was personally guaranteed by Mr. Bathija under an all moneys guarantee dated 25 January 2008 to a maximum of £300,000. Furthermore Mr Bathija’s liabilities were secured by a mortgage dated 20 May 2005 of Flat 14, Oak Tree Lodge, 49 -50 Leinster Gardens London W2 (“the Property”). Mr Bathija’s main contact at Lloyds was Mr O'Neill, the Relationship Manager. However, from about January 2010 Mr Bathija was aware that it was Mr Parker rather than Mr O'Neill who made any decision relating to Global’s overdraft facilities and who authorised payments in excess of the Facility.

Global entered into creditor’s voluntary liquidation (“CVL”) on 23 February 2011. The critical events with which this case is concerned occurred between 14 and 20 January 2011 and relate to the payment of £164,179.88 which was due to IATA on 17 January.

It is Mr Bathija’s case that there was a meeting between Mr Bathija and Mr O'Neill on 14 January 2011 at which Mr O'Neill agreed that the direct debit in favour of IATA in the sum of £164,179.88 would be honoured. Mr O'Neill accepts that there was a meeting but he denies he agreed that the Bank would agree to honour the direct debit.

On 17 January 2011 the direct debit was returned unpaid. In the result on 18 January 2011 IATA sent an email to Mr Bathija. The effect of the email was that unless payment was received in full by 19 January 2011 IATA would invoke its default procedure.

Mr Bathija held further meetings with Mr O'Neill on 18 and 19 January

Judgment

Judge Behrens :

1 Introduction

Mr Bathija held further meetings with Mr O'Neill on 18 and 19 January

Bathija v Lloyds TSB Bank Plc

Areas of Law