Debt recovery often raises complex questions where contractual obligations are made subject to conditions precedent. A Court of Appeal decision has provided important clarification: a debtor cannot avoid liability by relying on the non-fulfilment of a condition that they themselves have prevented.

 

In King Crude Carriers SA & Ors v Ridgebury November LLC & Ors (2024), the dispute centred on payment obligations under a commercial contract. The debtor argued that a condition precedent to payment had not been satisfied and that, as such, no liability to pay had arisen. The Court of Appeal firmly rejected this argument. It held that where non-fulfilment of a condition precedent is caused by the debtor’s own breach, the debtor remains liable. The Court emphasised the long-established principle that a party cannot benefit from its own wrongdoing.

 

The decision underscores a key point of law in the debt recovery context: A debtor cannot rely on its own breach to avoid payment obligations. The courts will intervene to ensure that contractual conditions cannot be manipulated by those who stand to benefit from their failure.

 

For creditors, the ruling offers reassurance that debts cannot be evaded through technical reliance on conditions where the debtor has caused non-compliance. It strengthens the position of those seeking to enforce judgments or contractual payment obligations. For debtors, the case is a clear reminder that courts will look beyond form to substance: attempts to avoid liability by relying on one’s own breach are unlikely to succeed and may only increase costs exposure.

 

King Crude Carriers v Ridgebury confirms that the courts will not allow parties to exploit contractual conditions in bad faith. For creditors, it provides a valuable tool in resisting debtor defences based on alleged non-fulfilment; for debtors, it is a cautionary reminder that wrongful conduct can remove otherwise arguable defences.

 

How We Can Help

 

Our litigation team specialises in debt recovery and enforcement. Whether you are seeking to enforce a judgment, recover sums due under a contract, or defend a claim, we can provide clear, strategic advice tailored to your circumstances. Please contact us to discuss how we can assist.