BANK WAS ENTITLED TO SUMMARY JUDGMENT DISMISSING CLAIMS

Lisa Lacob instructed by Gordons LLP has successfully obtained summary judgment for Santander against the former directors and shareholders of a company, which resulted in the dismissal of their claims against the bank, and judgment on the bank’s counterclaim against the Claimants for sums due under their personal guarantee. The directors had argued that the bank made misrepresentations to them about the valuation of 2 care home properties, or owed a duty of care to them in relation to those valuations. The directors also argued that the guarantee they had provided to the bank had been discharged under the rule in Holme v Brunskill as the underlying loan obligations had been materially varied when the interest rate on the lending was fixed.  The court held that this was an ordinary secured lending transaction which did not impose any duty of care on the bank to ensure that the property had been properly valued, and that the mere provision of the valuation reports to the claimants could not give rise to a duty of care when one otherwise did not exist. The court also held  that the directors had no real prospect of proving that, by communicating the result of the valuation exercise to them and then making facilities available, the bank had made any representation about the accuracy or reliability of the valuation or the competence of the valuer.  There was also no real prospect of the directors showing that the guarantee had been discharged as it was, on its proper construction, an “all moneys” guarantee and the course of dealing between the parties had remained within the scope of the guarantee.