Global Marine Drillships Ltd v La Bella & Ors

A solicitor’s undertaking governing client money must be performed according to its terms. Where funds are to be returned if a specified insurance policy or financial instrument is not provided, the holder remains obliged to return them unless the undertaking has been validly varied or the beneficiary has released the obligation. An alleged authorisation of payments must be proved by reliable evidence and must extend to the particular payments made. Intense pressure, reliance on a client’s assurances, or a belief that payments are proper does not itself provide a defence to breach of the undertaking or breach of trust.

Global Marine Drillships Limited transferred £7 million to Landmark Solicitors LLP pursuant to undertakings given by Landmark and Salina Yildiz. The money was to be held for specified purposes, including the purchase of insurance and the provision of standby letters of credit, and was to be returned if those arrangements were not completed.

No relevant insurance policy or standby letter of credit was obtained. Part of the money was transferred to an account controlled by other defendants, and only part was later returned. Global Marine brought claims against Landmark and Ms Yildiz for breach of the undertakings and breach of trust. The defendants contended that the payments had been authorised and that Global Marine had agreed to release them from liability in return for repayment of the remaining funds.

1. Judgment for the claimant. The undertakings required the funds to be used only for the purposes stated and required repayment when the insurance policy was not issued or the standby letters of credit were not provided. It was common ground that neither had been obtained and that the money remained subject to the trust described by the parties’ case (paras [47], [54]-[56]).
2. The payments to Charles Barber & Sons Limited were not authorised by Global Marine. The evidence that Global Marine’s representatives had seen or approved the relevant transfer form was unreliable. The judge accepted that Global Marine did not know of the payments until 17 June 2010. In any event, knowledge that money was intended to fund insurance would not amount to authorisation of payments for other purposes or vary the repayment obligation (paras [57]-[74]).
3. The alleged agreement of 17 June 2010 did not release Landmark or Ms Yildiz from liability. The judge preferred the evidence of Global Marine’s representatives, which showed that repayment of the full outstanding amount remained required. The inconsistent accounts given by Mr La Bella further undermined the defence. No binding release or variation of the undertaking was proved (paras [75]-[82]).
4. The pressure placed on Ms Yildiz and her reliance on Mr La Bella’s assurances did not constitute a defence. Her resistance was eventually overcome by aggression and false promises, but the undertakings nevertheless remained binding. The defences advanced by Landmark and Ms Yildiz therefore failed, and judgment was entered for Global Marine (para [86]).