Lloyds Bank Plc v Lampert & Anor

A contractual right to repayment on demand may coexist with an anticipated duration for an overdraft or bridging facility. An indication that repayment is expected at a future date does not, without more, restrict the express right to demand earlier repayment or justify implying such a term.

On an application under Order 14, the applicant need show an arguable defence or another reason for trial. The court need not decide an academic question about the period reasonably required to satisfy a demand where the evidence shows that additional time would not have enabled payment.

Lloyds Bank sought judgment against Jeffrey Lampert under a guarantee supporting the overdraft of Heritage plc, and sought repayment of a bridging loan secured by a charge over the Lamperts’ home. Master Trench and Popplewell J granted or upheld judgment in the Queen’s Bench proceedings. Master Bowman and Neuberger J granted or upheld orders for repayment and possession in the Chancery proceedings.

Mr Lampert appealed both decisions. Mrs Lampert renewed an application for leave to appeal concerning the alleged representation about an earlier charge. The central issues were whether the bank’s demands were premature, whether the overdraft and bridging facilities were genuinely repayable on demand, whether sufficient time had been allowed for payment, and whether any arguable defence required a trial.

1. Queen’s Bench appeal dismissed. The 1990 guarantee permitted payment on demand and clause 16 stated that the bank need not first enforce other security. The side letter restricting enforcement had been cancelled or had ceased to apply. Later correspondence provided reassurance about looking first to company assets, but did not create a contractual restriction. The demand was therefore not premature.
2. The words repayable on demand in the April 1996 facility letter meant what they said. They were not incompatible with the parties’ expectation that the facility would continue for a period. The bank was entitled to demand immediate repayment from Heritage.
3. The court left open the academic question whether English law should retain the mechanics-of-payment approach stated in Bank of Baroda v Panessar or adopt a more liberal approach. On the evidence, however, additional time could not have enabled Heritage to raise nearly £600,000 or repay its debt. The appointment of receivers was therefore effective on either approach.
4. Complaints that the bank had acted harshly or unconscionably, and objections to the receivers’ identity, disclosed no arguable defence or other reason for a trial under Order 14 Rule 3.
5. Chancery appeal dismissed. The bank had not reduced the overdraft during the expected life of the bridging loan in a manner which undermined repayment. There was no contractual or other basis preventing a later reduction. The March 1996 indication that repayment was expected in tranches from August did not remove the express right to call in the bridging loan on demand, and no contrary implied term arose.
6. Mrs Lampert’s application for leave was dismissed. On the conceded facts there was no material misrepresentation concerning the earlier charge. Appeals and application were dismissed with costs, with 56 days allowed to give possession.

• Court of Appeal (Civil Division): dismissed Mr Lampert’s appeals from the decisions of Popplewell J and Neuberger J, and dismissed Mrs Lampert’s renewed application for leave to appeal.
• High Court, Queen’s Bench Division: Popplewell J dismissed Mr Lampert’s appeal from Master Trench’s Order 14 judgment enforcing the guarantee.
• High Court, Chancery Division: Neuberger J dismissed Mr Lampert’s appeal from Master Bowman’s orders for repayment of the bridging loan and possession.