Richard Spearman QC acted in the Court of Appeal for a commercial lender (“GMH”) in a claim to recover multi-million dollar loans which GMH had made to a company (“QHL”), the repayment of which was guaranteed by a director of QHL, Mr Harkin, and secured by a charge over the assets of a subsidiary of QHL. Mr Harkin and QHL obtained permission for a second appeal to the Court of Appeal against the grant of summary judgment by the courts below on the ground that the case raised an important point of principle concerning the extent of a secured creditor’s equitable duty to a surety. They argued that such a creditor has a duty “to take such reasonable steps as are required to maintain the surety’s right of recourse to [the] security in the event that the creditor requires payment from the surety without first enforcing its rights to [the] security”. GMH contended that the authorities were at one in placing emphasis on the limited scope of the creditor’s equitable duty, which could be summarised as comprising (i) a duty to perfect the security and (ii) a duty, when exercising a power of sale, to take reasonable steps to obtain a proper sale price for the security but (iii) no other duty to take positive steps which have not been expressly stipulated by the debtor or the surety and (iv) in particular, no duty to preserve the security at the peril of the creditor. The Court of Appeal preferred GMH’s arguments, and dismissed the appeal. In a reserved judgment handed down on 31 October 2018, the Court of Appeal clarified the extent of a creditor’s obligations to a surety and a debtor under English law. In the absence of express terms, there is no broad equitable duty to “take reasonable steps to protect the security”. The full judgment in General Mediterranean Holding SA SPF v Qucomhaps Holdings Ltd & Ors  EWCA Civ 2416 is available here.
Richard later provided an interview about the case to Lexis PSL, which can be accessed here.
This article was first published on Lexis®PSL Banking & Finance on 9 November 2018.
Richard also successfully represented the claimant in a libel action concerning articles published on a “village news” website which alleged, in brief: (a) that there was very good reason to believe that the claimant had been guilty of participation in an attempt to defraud certain individuals of many millions of pounds, and (b) that the claimant had been arrested for serious criminal offences, and, thus, that there were reasonable grounds to suspect that he was guilty of those offences. One article was defended on the basis that it was protected by the defence of publication on a matter of public interest (Defamation Act 2013, s4), and another on the ground that it was not defamatory because its publication had not caused and was not likely to cause “serious harm” to the reputation of the claimant (Defamation Act 2013, s1(1)). In a reserved judgment handed down on 2 November 2018, Warby J rejected both defences, and awarded the claimant damages and a permanent injunction against repetition of the same or similar libels. Warby J also awarded costs against the defendant on the indemnity basis for the entirety of the action. The full judgment in Doyle v Smith  EWHC 2935 (QB) is available here.
To view the media story from the BBC News website, please click here.