Bank and antique seller battle over £2.4m loan and £9.7m compensation claim

Monday 06 February 2023

A hearing will take place in the Royal Court later this year to decide if the owner of a well-known antiques and home interiors business is eligible for compensation over a loan he took out to expand the business.

David Hick has not repaid a £2.4m loan he took out from HSBC in June 2007 because, he argues, he was mis-sold a product attached to it.

The bank made a formal demand for immediate repayment in 2019, an updated demand for £2.1m was made in November 2020 and a summons was issued in January 2021.

An answer and counterclaim were filed by Mr Hick in April 2021, with the businessman arguing that he had an unresolved claim against HSBC for damages and consequential loss relating to the mis-selling of an interest rate swap. 

The amount of the counterclaim was £9.7m plus interest.

In September 2021, HSBC successfully argued before the Royal Court that any counterclaim was out of time, being more than ten years old, therefore it granted summary judgment on that ground.

The judge, the Master of the Royal Court, Advocate Matthew Thompson, also awarded HSBC costs. 

Three months later, Mr Hick applied to submit fresh evidence in the form of an affidavit, arguing that he was unaware that he had been mis-sold a swap product until 2012.

Therefore, he could not have appreciated that he had a claim for consequential loss arising out of that mis-selling until that point, and time did not start running until then.

Hence, his counterclaim should not be ruled out of time.

In a recently published judgment, Commissioner Sir William Bailhache ruled that Mr Hick’s affidavit should be allowed and his appeal should proceed to a hearing.

That hearing is due to take place later this year.

Explaining his rationale, Sir William concluded: “I was taken through the various communications between the Master and the parties following the issue of the application for summary judgment in April 2021. 

“In summary, those communications showed that the Master had given the Appellants [Mr Hick and his companies] every opportunity to apply properly for an adjournment, if that was what was sought, and/or to provide evidence dealing with the assertions made by the Respondent [HSBC] as to why summary judgment should be given.  

“In fact, the Appellants did not provide any medical evidence to support the application for an adjournment, and, notwithstanding that [Mr Hick] had had plenty of time to respond to the allegations of the Respondent, no evidence in support was provided.  

“Unsurprisingly, on the evidence available to him, the Master concluded that it was right to dismiss the application for an adjournment and conclude that the substantive application for summary judgment should be granted.  

“In that connection, the Master was undoubtedly not assisted by the fact that the Appellants were neither represented nor was [Mr Hick] present.”

However, the judge continued: “The circumstances before me are different. An explanation has been given, with medical evidence, which explains the failure to provide appropriate evidence to the Master.  

“It is clear that [Mr Hick] was unwell and unable to take decisions: as a result he made a bad decision not to face up to the problem and instruct lawyers.  

“I accept the submission that he should not suffer completely for that mistake, as the bank has submitted, and be prevented forever on that ground from bringing his claim for consequential loss.  

“The question is what is necessary to do justice, and I have no doubt that I should grant the Appellants leave to file the affidavit sworn by [Mr Hick] in December 2021.

The Commissioner also set aside Advocate Thompson’s earlier order as to costs.

In November, Mr Hick said that poor health as a consequence of the court action had led him putting his business up for sale.