Charles Roberts v Kseye Capital No.1 Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Graeme McPherson |
| Judgment Date | 17 November 2023 |
| Neutral Citation | [2023] EWHC 2927 (Ch) |
| Court | Chancery Division |
| Docket Number | Appeal No: CH-2023-000162 |
[2023] EWHC 2927 (Ch)
Graeme McPherson KC
Sitting as a Deputy High Court Judge
Appeal No: CH-2023-000162
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
Case No 42 of 2021
ON APPEAL FROM THE COUNTY COURT AT CROYDON
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Duncan MacPherson (instructed by Treon Law) for the Appellant
Ms Bridget Williamson (instructed by Anthony Gold LLP) for the Respondent
Hearing dates: 7 November 2023
APPROVED JUDGMENT
This judgment was handed down remotely at 10.00am on Friday 17 November 2023 by circulation to the parties or their representatives by email and release to the National Archives.
Mr Graeme McPherson KC:
(A) Introduction
) In September 2017 the Respondents (‘ Kseye’) provided bridging finance in the sum of £2,083,000 (‘ the Loan Facility’) to GBQ Investments Limited (‘ GBQ’). The purpose of the Loan Facility was to assist GBQ with the funding of the purchase of a number of properties. Kseye took various securities from GBQ and certain third parties for the sums drawn down by GBQ under the Loan Facility.
) GBQ did not repay the sum outstanding under the Loan Facility when it fell due on 7 March 2018. Although a substantial repayment was subsequently made in April 2018, a significant balance continued to be due and owing from GBQ.
) GBQ remained in default under the Loan Facility. In August 2019 the Appellant (‘ Mr Roberts’) agreed with Kseye to provide a guarantee to Kseye in respect of GBQ's obligations under the Loan Facility. The guarantee that Mr Roberts provided was contained in
a) A Deed of Guarantee dated 16 August 2019 (‘ the Guarantee’), and
b) A side letter dated 1 August 2019 (‘ the Side Letter’). The Side Letter recorded (amongst other things)
‘ It has been agreed that …
1 [Mr Roberts'] liability under the Guarantee shall be limited to £1,000,000 plus interest from demand and costs of enforcement’.
) The Recitals to the Guarantee recorded
a) That Kseye had agreed to provide the Loan Facility to GBQ, and
b) That Mr Roberts had agreed to enter into the Guarantee ‘ for the purpose of providing credit support to [Kseye] for [GBQ's] obligations under the [Loan Facility]’.
) Clause 2 of the Guarantee (titled ‘ Guarantee and Indemnity’) then recorded
‘ 2.1 In consideration of [Kseye] entering into the [Loan Facility] [Mr Roberts] guarantees to [Kseye], whenever [GBQ] does not pay any of the Guaranteed Obligations when due, to pay on demand the Guaranteed Obligations.
2.2 If the Guaranteed Obligations are not recoverable from [GBQ] by reason of illegality, incapacity, lack or exceeding of powers, ineffectiveness of execution or any other reason, [Mr Roberts] shall remain liable under this guarantee for the Guaranteed Obligations as if [Mr Roberts] were a principal debtor.
2.3 [Mr Roberts] as principal obligor and as a separate and independent obligation and liability from [Mr Robert's] obligations and liabilities under clause 2.1 agrees to indemnify and keep indemnified [Kseye] in full and on demand from and against all and any losses, costs, claims, liabilities, damages, demands and expenses suffered or incurred by [Kseye] arising out of or in connection with any failure of [GBQ] to perform or discharge any of its obligations or liabilities in respect of the Guaranteed Obligations.
2.4 This guarantee shall not be discharged or affected by any failure of or defect or informality in the [Loan Facility] or by any legal limitation, disability or incapacity or lack of any borrowing powers of [GBQ] or lack of any authority of any person appearing to be acting for [GBQ] in connection with the [Loan Facility].’
‘ Guaranteed Obligations’ were defined in the Guarantee as meaning
‘ all present and future payment obligations and liabilities of [GBQ] due, owing or incurred under the [Loan Facility] to [Kseye] (including without limitation under any amendment, supplement or restatement of the [Loan Facility] or in relation to any new or increased advances or utilisations)’.
) Clause 17 of the Guarantee (titled ‘ Notices’) recorded:
‘ 17.1 Each notice, request, demand or other communication given under or in connection with this guarantee shall be in writing, delivered personally or sent by prepaid first class letter, fax or email and sent
17.1.1 to [Mr Roberts] at
17.1.1.1 [The Specified Address]
17.1.1.2 Email: [INTENTIONALLY BLANK]
…
17.2 Any notice or other communication shall be deemed to have been received:
…
17.2.3 if posted, on the second Business Day after the day it was sent by pre-paid first class post.’
) On 6 November 2020 GBQ entered into administration. No further repayments were made to Kseye under the Loan Facility.
) On 19 March 2021 Kseye served (by substituted service) a statutory demand on Mr Roberts and on 9 September 2021 Kseye served (also by substituted service) a bankruptcy petition on Mr Roberts (‘ the Petition’). Mr Roberts responded to the Petition by a Notice of Opposition dated 22 September 2021 supported by a witness statement dated 20 October 2021. Together those documents set out a number of bases which, Mr Roberts contended, demonstrated that the Petition Debt was genuinely disputed by him on substantial grounds.
) Kseye served evidence in response from Nisha Rayvadera (‘ Ms Rayvadera’), a solicitor employed by the Kseye Group. Kseye denied that Mr Roberts had any substantial grounds for disputing the Petition Debt.
) On about 22 July 2022 Mr Roberts served
a) A Further Notice of Opposition, and
b) A second witness statement.
Those documents identified additional bases which Mr Roberts contended demonstrated that the Petition Debt was genuinely disputed on substantial grounds.
) A hearing to determine whether there were in fact any substantial grounds for disputing the Petition Debt was listed to take place on 28 July 2022 before District Judge Coonan in the Croydon County Court. By the time of the hearing it was clear from the witness evidence that one of the bases on which Mr Roberts contended that the Petition was genuinely disputed on substantial grounds was that
a) The Petition Debt was said by Kseye to be based on his liability under the Guarantee
b) Liability under Clause 2.1 of the Guarantee was not triggered unless and until a demand for payment had been validly made of him under the Guarantee
c) Clause 17 of the Guarantee required any such demand to be made in a particular way (for present purposes, to be sent to him by prepaid first-class post at the Specified Address)
d) Kseye had not sent any demand to him under the Guarantee, alternatively had not sent any demand to him under the Guarantee in a manner that complied with Clause 17 of the Guarantee
e) No liability had thus arisen under Clause 2.1 of the Guarantee as at the date of the Petition.
) In this Judgment I refer to the issue that I have summarised in the previous paragraph as ‘ the Demand Case’. In reality the Demand Case at all times comprised two elements:
a) Was a demand under the Guarantee sent at all to Mr Roberts prior to the date of the Petition?
b) If so, was that demand sent in accordance with Clause 17 of the Guarantee i.e. by prepaid first class post to the Specified Address?
) Although the District Judge heard submissions from both parties on 28 July 2022 as to whether there were substantial grounds for genuinely disputing the Petition Debt (including submissions on the Demand Case), the hearing was not completed. Instead, the District Judge adjourned the hearing part-heard so as to permit Kseye to amend the Petition in the light of an objection (irrelevant for present purposes) taken to the content of the Petition by Mr Roberts. An amended petition (‘ the Amended Petition’) was then served by Kseye on 3 August 2022.
) Mr Roberts served a third witness statement dated 2 August 2022 in which (amongst other things) he continued to object to the form of the Amended Petition. On 31 August 2022 Mr Roberts served a Third Notice of Opposition to the Amended Petition. Paragraph 2(a)(ii) of that Third Notice of Opposition expressly pleaded the Demand Case as a ground on which Mr Roberts opposed the Amended Petition in the following terms
‘ Even if the Guarantee provides security for the Loan, my liability thereunder has not been triggered as:
… Even if [Kseye] gave notice to GBQ, which is denied, they failed to serve me with a demand under the Guarantee as required by clause 2.1 of the Guarantee’.
) The parties continued to serve evidence supporting and opposing the Amended Petition. Kseye served two further witness statement from Ms Rayvadera and Mr Roberts served four further witness statements. In those witness statements Mr Roberts
a) Maintained his objections to the Amended Petition
b) Maintained his position that the Petition Debt was genuinely disputed on substantial grounds. The Demand Case remained live in that regard
c) Maintained that Kseye had unreasonably refused offers of security made by him.
) The 28 July 2022 hearing was finally concluded at a further hearing before the District Judge on 30 May 2023. By that time Mr Roberts no longer maintained that Kseye had unreasonably refused offers of security made by him and (it would appear) was also no longer pressing his objections to the content of the Amended Petition. The central question at the restored hearing was thus whether
a) (As Kseye contended) a bankruptcy order should be made against Mr Roberts on the Amended Petition, or
b) (As Mr Roberts contended) the Amended Petition should be dismissed on all or any of the various grounds on which he relied in his Notices of Opposition and witness evidence as demonstrating that the...
To continue reading
Request your trial