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Default judgement against Cyprus bank

It appears that the Marfin Popular Bank Public Limited Company (also known as the Laiki) may have failed to file a defence against an action heard in the High Court in London recently.

royal-courts-of-justiceIN AN unusual term of events, the High Court in London has handed down a default judgment against Cyprus’ Marfin Popular Bank.

A default judgment is one without trial where a defendant has either failed to file an acknowledgement of service or has failed to file a defence.

Considering the problems and turmoil that the Bank is facing in Cyprus it is possible the papers, which would have been served on the bank notifying them of the High Court action, may have been forgotten or misplaced.

In May last year we published an article warning about the problems of ignoring or not defending writs as a court would progress the claim brought by the plaintiffs and would issue a judgment in their favour.

It seems that in this case the Marfin Popular Bank failed to heed those warnings and that, as a consequence, the High Court in London has issued a default judgment against them.

The High Court judgement in full

High Court Judgement – Claim No: HQ12X02903

Update

We have been advised (10th May) that the Marfin Popular Bank did file an acknowledgement of service which extended their time to challenge jurisdiction or file a defence, which then lapsed – and that Highgate Hill Solicitors was the firm responsible for obtaining the default judgment.

Readers' comments

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  • @Denton – please note the update to the article that I have published at the request of the firm responsible for obtaining the judgment.

    If these loans were granted to purchase off-plan property, they would be ‘home loans’. A home loan is somewhat different to a mortgage – and in the USA, for example, they are referred to as ‘construction loans’ and they are used by the developer to build the property.

    Once the property’s Title Deed has been issued and its ownership has been transferred to the purchaser, the ‘home loan’ is converted to a mortgage (and the mortgagor pays 1% of the amount advanced under the mortgage for it to be registered against the Title of the property at the Land Registry).

    As for the impact of the judgment on the other cases being heard in the UK, you’ll need to speak with the law firms acting on behalf of the plaintiffs.

  • Denton Mackrell says:

    The plaintiffs argued that they only entered into the property-related loan (mortgage?) as a result of the (several) defendants’ misrepresentation. The court held in effect that Marfin Popular Bank was at the nub of the misrepresentation. As a result, the court rescinded all the relevant loan agreements and powers of attorney, since they were all tainted by the misrepresentation.

    Further, the plaintiffs were entitled to either damages under S.2(1) of the Misrepresentation Act 1967 or, if these were not forthcoming, damages for negligent misrepresentation at common law. The plaintiffs were also entitled to interest plus costs. Damages, interest and costs are still to be assessed by the court.

    @Nigel. How do you think this case will affect the much larger case in the UK High Court? It may not be a precedent but it must be a warning to other defendants in other broadly similar cases. Does the misrepresentation have to have occurred in the UK for such a case to be heard in the UK?

  • steve says:

    Its easy, all Marfin have to do is ask for judgement to be set aside and give one of many reasons. This then delays things even further. They will know all about this and Cypriots are the masters of delaying tactics.

  • Peter Davis says:

    No excuse they had the papers lawful served.

    Why should they now say we were too busy to deal with incidentals like this?

    They always managed to take the 50 cents off my deposits, never too busy to have their fingers in my accounts with charges for statements and book-keeping costs.

  • andyp says:

    Maybe the usual Cypriot tactic of saying nothing backfired.

    About time some victims got a bit of luck.

  • Fighting For Justice says:

    It will be interesting to see if they make an application to set judgment aside. If they have a good enough reason for not appearing they will probably get an opportunity to defend.

  • @Fighting For Justice – I feel the bank was overwhelmed with the problems they are having in Cyprus and the writ fell through the cracks somewhere.

    I’m sure they would have contested jurisdiction at the very least.

  • Fighting For Justice says:

    What’s your take on it Nigel?

    Do you think they just did not bother to defend because there is nothing to get a judgment enforced against?

  • Conor O'Dwyer says:

    A nicely timed action then. Well played. :)

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