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Shamji v Johnson Matthey Bankers Ltd

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UK bankruptcy hearing

Shamji v Johnson Matthey Bankers Ltd
CourtCourt of Appeal
Citation BCLC 36
Case history
Prior action BCLC 278
Keywords
Administration

Shamji v Johnson Matthey Bankers Ltd BCLC 36 is a UK insolvency law case concerning the administration procedure when a company is unable to repay its debts.

Facts

Shamji controlled a group of companies. They were in debt to JMB who had mortgages and guarantees. JMB wanted payment. The bank agreed to release the debt if Shamji paid £14m within 21 days and this could be extended by 14 days if the bank viewed negotiations as proceeding properly. Six days after the 21-day period, JMB appointed receivers. Shamji and the companies went to court for an injunction, arguing the bank had breached the contract. They argued there was a duty on JMB as mortgagee, when appointing a receiver, to consider relevant matters including the effect of an appointment on refinancing negotiations.

Judgment

High Court

Hoffmann J dismissed the appeal. He said the bank was entitled contractually to appoint receivers. It owed no duty of care when doing so to any mortgagor or guarantor. It was protecting its interests and could not be challenged.

Court of Appeal

Oliver LJ affirmed the decision of Hoffmann J. Nourse LJ agreed.

See also

Administration cases
Insolvency Act 1986 Sch B1
Re Harris Simons Construction Ltd 1 WLR 368
Re Charnley Davies Ltd (No 2) BCLC 760
Kyrris v Oldham EWCA Civ 1506
Re Atlantic Computer Systems (No 1) Ch 505
Powdrill v Watson 2 AC 394
Downsview Nominees Ltd v First City Corp Ltd UKPC 34
Medforth v Blake EWCA Civ 1482
Re Kayley Vending Ltd EWHC 904 (Ch)
HMRC v Maxwell EWCA Civ 1379
see UK insolvency law

Notes

References

  • L Sealy and S Worthington, Cases and Materials in Company Law (9th edn OUP 2010)
  • R Goode, Principles of Corporate Insolvency Law (4th edn Sweet & Maxwell 2011)
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