Glint Pay Ltd & Ors v Jason Daniel Baker & Anor

A chargee’s contractual and proprietary rights under a security document pass with the security interest unless the assignment clearly provides otherwise. Information covenants securing a floating charge may extend to the chargor’s assets and liabilities as a whole, construed commercially rather than by excessive textualism.

A chargee may exercise enforcement rights for the proper purpose of enforcing security, even where it also has a collateral commercial objective. A Braganza duty will not ordinarily govern a unilateral chargee’s contractual right to request information or enforce security. Claims lacking a realistic prospect of success may be struck out or summarily determined.

The claimant companies challenged the validity of the defendants’ appointment as administrators. The appointment followed Niven’s acquisition of secured lending rights, a request for information under the guarantee and debenture, the claimants’ failure to respond, acceleration of the loan and an unpaid demand.

The claimants argued that the assignment did not transfer the information rights, that the information covenant was limited to specified fixed assets, that no event of default occurred, and that the chargee acted for an improper purpose or was subject to an implied good-faith constraint. The defendants applied under CPR 3.4(2) and CPR 24.3.

The claim was struck out and reverse summary judgment was granted. The claimants had no reasonable grounds for bringing the claim and no real prospect of success.

1. The Deed of Assignment transferred the secured claim, including rights incidental to the security interest. The contrary construction would have left untransferred rights extinguished under the deed and made no commercial sense.
2. The Information Obligations were not confined to physical or fixed assets. The floating charge extended prima facie to all undertaking, property, assets and rights of the chargors. The information covenant therefore covered the assets and liabilities comprising the secured business.
3. The request was validly made on behalf of Niven despite the sender’s email signature and address. Since no information was supplied, the claimants were in breach even on their narrower construction. That breach constituted an event of default and entitled the chargee to accelerate the debt.
4. The court accepted the established proper-purpose limitation on enforcement of security. However, the chargee’s objective of enabling an independent administrator to take control of the business was not improper merely because it also hoped to acquire the business. Enforcement for repayment or a proper statutory purpose is not invalidated by collateral motives.
5. No Braganza duty governed the chargee’s right to request information or exercise rights under the charge. The right was a unilateral contractual right exercised for the chargee’s own interests, analogous to a lender’s right to terminate a loan.
6. The alternative arguments concerning notification of claims were doubtful but unnecessary to decide. The estoppel issue was likewise no longer necessary, although the court considered that pursuing a claim fundamentally inconsistent with the position advanced to obtain the administration’s closure would constitute an abuse of process.