Camden Market and Lock

IBRC v Camden Market Holdings (Court of Appeal)

Posted on 28/05/2017 · Posted in Expert Witness, Financial Litigation, Property

After Irish Bank Resolution Corporation Limited (‘IBRC‘) was placed in special liquidation in February 2013, the Irish Minister of Finance instructed the liquidators to sell off IBRC’s loan book, which among other things, contained a loan of £195 million made to Camden Market Group for property development in London under the Camden Facilities Agreement in 2005. Accordingly, the liquidators started marketing the properties in a combined portfolio with other distressed debts. Claiming breach of contract and losses suffered due to diminished market value of the properties in post-liquidation marketing, Camden then initiated proceedings against IBRC, saying the Camden Facilities Agreement contained implied terms which prohibited IBRC from taking any action which might hinder Camden’s marketing of the properties in future.

Convictions do not imply reasons.”
Margaret Deland

IBRC applied for summary judgment at the High Court to strike out the claim, arguing the loan agreement contained clear provisions that permitted IBRC to market the loans and no implied terms could be inconsistent with or contradictory to those express terms. The judge at the first instance dismissed the application. IBRC appealed. The question before the Court of Appeals was now to decide whether the express terms of a loan agreement allowing the marketing of the loan by the lender should be limited by the implied terms that interfere with the borrower’s right to obtain the best price for the property securing that loan.

Taking note of the recent Supreme Court decisions in Marks & Spencer v BNP Paribas and Arnold v Britton, the Court of Appeals considered it a “cardinal rule” that an implied term must not contradict any express term of the contract. According to Lord Justice Beatson, the specific agreement in this case was regarding a specific exit strategy and limited to a specific period of time, and there was neither any direct linguistic inconsistency nor any substantive inconsistency between the express and implied terms of the contract. Especially considering that the contract was lengthy and carefully drafted, the Court held “commercial common sense and surrounding circumstances should not be invoked to undervalue the importance of the language of the provision which is to be construed” and declared itself “reluctant to imply a further term even if it does not actually conflict with the express terms.”

In conclusion, the Court held Camden Market’s case was bad in law and they had no real chance of succeeding in it. The appeal was hence allowed and summary judgment was entered for IBRC.

Link: Irish Bank Resolution Corporation Limited v Camden Market Holdings Corporation EWCA [2017] 7

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