Advance Global Capital Ltd v Jeremy Howard Coombes
| Jurisdiction | England & Wales |
| Judge | Pearce |
| Judgment Date | 17 July 2023 |
| Neutral Citation | [2023] EWHC 1822 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | CC-2022-MAN-000082 |
[2023] EWHC 1822 (Comm)
His Honour Judge Pearce
CC-2022-MAN-000082
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
CIRCUIT COMMERCIAL COURT (KBD)
Manchester Civil Justice Centre
1 Bridge Street West
Manchester
M60 9DJ
Ms Lisa Feng (instructed by BERMANS LLP) for the Claimant
Mr Jay Jagasia (instructed by MISHCON DE REYA LLP) for the Defendant
Hearing date: 23 March 2023
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 16:00 on Monday 17 th July 2023.
INTRODUCTION
This is my judgment on the Claimant's application for:
1.1. Summary judgment on the issues raised in paragraphs 21 to 28 of the Particulars of Claim, on the ground that the defence in relation to that part of the Particulars of Claim has no real prospects of success; and/or
1.2. The striking out of those paragraphs of the Defence which deny the claim set out in paragraphs 21 to 28 of the Particulars of Claim on the ground that the Defence discloses no reasonable grounds for defending this part of the claim; and/or
1.3. An order for an interim payment.
The application notice was issued on 15 February 2023. It is supported by a witness statement from Mr Jonathan Berkson, solicitor, of the same date. In response, the Defendant filed a witness statement dated 15 March 2023.
The application was heard on 23 March 2023 when I reserved judgement.
BACKGROUND
The Defendant was a director and shareholder of Castle Business Finance Limited (“the Company”). The Company offered invoice discounting and other related facilities.
The Claimant provided funding for the Company by a revolving credit facility entered into with the Company on 12 September 2016 (“the Facility Agreement”). The initial facility limit was stated to be $3 million. By deed dated 21 July 2017, the Defendant provided a personal guarantee and indemnity (“the Personal Guarantee” – at points within communications referred to below, it is abbreviated to “PG”) in respect of the Company's liabilities under the Facility Agreement. Pursuant to the terms of an amendment letter dated 26 July 2017 signed by the Claimant and the Company, the Claimant agreed to increase the existing facility limit under the Facility Agreement to $6 million. By amendment letter dated 30 November 2017, there was a further variation to the Facility Agreement, by which the Facility Interest Rate (defined below) was increased.
By a letter dated 22 June 2020 the Claimant demanded immediate payment of the sum of £2,695,215.21 pursuant to Clause 11.15 of the Facility Agreement. On the same day, Alastair Rex Massey and Paul David Allen were appointed joint administrators of the Company.
On and following that date, the Claimant made a series of demands as against the Defendant for sums allegedly due under the Personal Guarantee:
(a) A demand dated 22 June 2020 for £269,521.52 (“the First Demand”);
(b) A demand dated 11 February 2022 for £269,521.52 plus interest that had allegedly accrued since the first Demand, a total of £306,426.51 (“the Second Demand”);
(c) A demand dated 9 November 2022 for £177,257.40 plus interest (“the Third Demand”).
Between service of the Second and Third Demands, the Claimant, on 17 March 2022, served a statutory demand on the Defendant for the sum of £309,189.18. That statutory demand was set aside at a hearing before District Judge Wales sitting in the County Court at Bristol on 8 November 2022.
On 22 November 2022, the Claimant issued the Claim Form in this action, seeking monies allegedly due under the Personal Guarantee pursuant to the Third Demand. Paragraphs 21 to 28 of the Particulars of Claim, upon which the claims for summary judgment and/or strike out and/or an interim payment are based, relate to a claim on the Third Demand.
THE FACILITY AGREEMENT
The Facility Agreement sets out the terms upon which the Claimant provided credit to the Company. It refers to the concept of a “ utilisation” of the facility and, within Schedule 3 headed “ Definitions and Interpretation” states that a “ Utilisation” means “ a utilisation by the Company of the Facility, including any Early Advance, or, as the case may be, the principal amount outstanding of that utilisation plus any unpaid compounded interest accrued on it.”
At clause 3, the Facility Agreement deals with the payment of interest as follows:
“3 Interest and default interest
3.1 The Company must pay interest on each Utilisation in the currency in which that Utilisation was made at the relevant Facility Interest Rate. Interest is payable in arrears on the Interest Payment Date.
3.2 If the Company fails to pay when due any amount due from it under any Finance Document, interest will accrue on that amount (or so much as from time to time remains unpaid) from its due date to the date of actual payment at the Default Interest Rate in the currency of that overdue amount. Default Interest (if unpaid) arising on overdue amount will be compounded with the overdue amount on the last Interest Payment Date but will remain immediately due and payable.”
Schedule 1 of the Facility Agreement states the Facility Interest Rate to be 7.5% and the Default Interest Rate to be 4% above the Facility Interest Rate. The Facility Interest Rate was increased to 8.5% by virtue of the amendment letter of 30 November 2017.
THE PERSONAL GUARANTEE
The introductory sections of the Personal Guarantee identify the parties as the Claimant and the Defendant. The Defendant, as guarantor, is referred to in the first person within the document. The “Client” is defined as Castle Business Finance Limited and the “Limit” as the “ Lessor (sic – clearly this means “lesser”) of 10% of outstanding Utilisations or US$600,000.”
The term “ Utilisations” is not defined within the Personal Guarantee. However the Claimant points to the terms of the Facility Agreement itself which include the definition referred to above.
Clause 1.1 of the Personal Guarantee deals with the Defendant's obligations as follows:
“1.1 On the basis that the maximum amount that may be recovered by you from me under clauses 1.1 to 1.1.4 inclusive is the Limit referred to above (unless clause 2.1 is applicable) together with all costs and expenses of enforcement on an indemnity basis in accordance with clause 1.2 below and interest in accordance with clause 7 below now I hereby:
1.1.1 guarantee the due performance of all the obligations to you of the Client under the Agreement or any other agreement with you or any other form of obligation to you; and
1.1.2 undertake to pay you on demand any debit balance on the Current Account between you and the Company; and
1.1.3 undertake immediately upon demand to pay to you all amounts now payable or which may at any time hereafter become payable to you by the Client, whether they arise under the Agreement or otherwise so that my obligations to you under this provision may be enforced against me at any time, without any prior demand on the Client; and
1.1.4 indemnify you and hold you harmless against all Losses you may suffer or incur by reason of any failure of the Client to comply with any term or condition of the Agreement or of any other agreement with you or any other form of obligation or security given to you.
1.2 On the basis of a complete indemnity I undertake to pay you all costs and expenses (including legal costs) incurred in enforcing or attempting to enforce either the terms hereof against me or the terms of any other guarantee and indemnity given by any other party in respect of any obligations of the Client to you.”
Clause 3 provides:
“ The guarantees and indemnities given herein shall be continuing obligations which shall apply to the ultimate amount payable by the [Company]”
Clause 7 states:
“ I shall be liable to pay you interest on all sums demanded by you hereunder from me. Such interest shall accrue from day to day and be calculated at the same rate as the Facility Interest Rate referred to in the [Facility Agreement]. It shall run from the date of your demand to the date when payment is received by you…, both before and after any judgment. Interest will be compounded on the last day of each month.”
Clause 10 provides:
“ For the purpose of determining my liability under this guarantee and indemnity (which shall be additional to and not in substitution for any other security taken or to be taken by you in respect of the Client's obligations to you) I shall be bound by any acknowledgement or admission by the Client and by any judgment in your favour against the Client. For such purpose and for determining either the amount payable to you by the Client or the amount of any Losses I shall accept and be bound by a certificate signed by any of your directors. In any proceedings such certificate shall be treated as conclusive evidence (except for manifest error) of the amounts so payable or of any Losses. In arriving at the amount payable to you by the Client or of any Losses you shall be entitled to take into account all liabilities (whether actual or contingent) and to make a reasonable estimate of any liability where its amount cannot immediately be ascertained.”
Clause 17 provides:
“ This guarantee and indemnity is governed by English law. I accept the nonexclusive jurisdiction of the English Courts. If any provision hereof shall be invalid or unenforceable no other provisions hereof shall be affected. All such other provisions shall remain in full force and effect. This document contains all terms agreed as to my liability to you as a guarantor and indemnifier of the Client's obligations to you. All prior negotiations, warranties,...
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