Description
Allegations that the loan was issued fraudulently or by mistake – board resolution authorising company to borrow – ingredients of negligence – receivership – liability of a guarantor for an extended further loan.
- Bank issued loan to a company without a properly signed board resolution – loan agreement signed by only one director – allegations that the loan was issued fraudulently or by mistake – complaints made to the bank – it was held that although company complained, it did not pay back the money to the bank and so it implies that company had accepted the loan.
- Whether bank is required to refer to a company’s board resolution before advancing loan to company requires evidence.
- Three ingredients of negligence – duty owed either under contract or tort, breach of duty and injury or damage.
- Receivership – when power to sell assets of a defaulting borrower is fully vested to the Receiver who is duly appointed by a bank, and a claim arises that the Receiver sold the assets below market value, the bank will not be liable in that claim.
- Receivership – allegations that assets of a defaulting borrower have been sold below the market value by the Receiver – aggrieved party ought to apply to court to challenge the sale of the property by the Receiver.
- An advice being merely anopinion does not bind the advisee.
- Guarantee – a guarantor should only be responsible for what he or she offered to guarantee – liability of a guarantor for an extended further loan – guarantors liable since they admitted liability.
- A party is bound by his pleadings.
- The liability of the Guarantor is coextensive with that of the principal debtor.
- Guarantor can be sued without the borrower.
Guarantee – outstanding amount – four guarantors – one being a business entity registered abroad, wound up and no longer in existence – and three guarantors being natural persons – the three guarantors are jointly and severally liable to pay the outstanding amount.
