[2025] EWHC 1972 (Comm)

Fecha: 30-Jul-2025

Was CPF One put on inquiry?

Was CPF One put on inquiry?

81.

The Click Group was a small group of companies, effectively engaged in developing residential property and run as a family business. Amy Rickman, the head of servicing at CPF One, said this in her witness statement dated 13 November 2024:

(a)

It is CPF One’s usual business practice to ensure that anyone who is personally guaranteeing a loan receives independent legal advice.

(b)

That happened here with Mrs Bandak. Fahri LLP acted for the borrower, Corben Mews. It also provided advice to Mrs Bandak in respect of the transaction.

(c)

The Solicitor’s Certificate signed by Mr Fahri (see [‎13], above) says that:

(i)

Mr Fahri provided copies of the relevant finance documents, including the Guarantee, to Mrs Bandak;

(ii)

he acted as solicitor for her;

(iii)

the Loan Facility was for the benefit of Corben Mews;

(iv)

he identified Mrs Bandak and witnessed her signature;

(v)

he explained to Mrs Bandak – it was a requirement of entering into the finance documents that the nature and implications of the documents were explained to her by a solicitor so that the lender CPF One could be certain she understood the nature of the transaction and was entering into it freely. Ms Rickman points out paragraph 7 of the Solicitor’s Certificate, where Mr Fahri confirmed:

“I explained to the Guarantor [Mrs Bandak] that it is a requirement of the Lender [CPF One] that the nature and implications of the Facility Agreement, the Personal Guarantee and the [Corben Mews Charge and the Debenture] are explained to them by a solicitor so that the Lender can be certain that they understand the nature of the transaction and are freely entering into it, so that there can be no dispute in the future as to whether undue influence was placed on them to sign the documents and/or whether they signed them as a result of a misrepresentation(s) or any other legal wrong.”;

(vi)

that Mr Fahri believed Mrs Bandak understood the advice; and

(vii)

that the advice was given at a face-to-face meeting and there was no other party in attendance.

(d)

Her understanding has always been that, ultimately, Mrs Bandak was a 50% beneficiary of the Click Group in equal measure to Mr Emmett. Mrs Bandak was asked to provide the Guarantee because of her interest in the Click Group and because CPF One’s due diligence checks showed that Mrs Bandak was a person of significant control of the Click Group (although I note this does not appear to have been the case until after the Guarantee was signed).

(e)

Mrs Bandak’s account that she had nothing to do with any of the Click Group at any relevant time does not reflect her experience of dealing with this loan, the Click Group, or Mrs Bandak.

82.

The position at (d) above is confirmed by the Financial Remedy Order. The position advanced by Mrs Bandak – that she held the shares on trust for her father – was a private arrangement between them, and CPF One could not have known that. While Lord Nicholls made clear in Etridge (at [49]) that shareholder interests and the identity of directors are not a reliable guide to the identity of the persons who actually have the conduct of a company’s business, this was not a case of a wife standing surety for her husband’s debts: this was a case of an ex-wife, who, having been involved in a business in which she and Mr Emmett continued to participate were (to CPF One’s knowledge) were the directors of Holdings and the ultimate beneficial owners of the Click Group, a group which engaged in developing residential property and was run as a family business.

83.

As Lady Simler pointed out in Waller-Edwards,in O’Brien the House of Lordsset a low level for the threshold which must be crossed before a bank is put on inquiry. But, here, there were no grounds to put CPF One on inquiry. In fact, Mrs Bandak’s evidence squares with the position set out by Ms Rickman regarding CPF One’s understanding, and is supported by the position set out in the Financial Remedy Order and the absence of the complaints detailed at [‎64] and [‎65] above, is consistent with that lack of notice to put CPF One on inquiry. There is no evidence to suggest that CPF One knew that Mrs Bandak was not discharging her obligations and responsibilities as a director of Holdings. There is no evidence to suggest that CPF One knew that Mrs Bandak (who was by June 2021 divorced from Mr Emmett) was not engaged in the Click Group businesses. There is no evidence to suggest that that CPF One knew that Mrs Bandak was not aware of the need to re-finance the original Corben Mews borrowing, and that that was the purpose of the Corben Mews Facility Agreement.

84.

In my judgment, HSBC Bank plc v Brown [2015] EWHC 359 (Ch) is distinguished from the facts here: in that case, the borrower was Mrs Brown’s son, and they were not in business together (at [56]), and HSBC accepted it was put on inquiry (at [58]). In any event, the “Etridge letter” in that case was quite different from the Solicitor’s Certificate given by Fahri LLP in this case.