United Trust Bank Ltd v Dalmit Singh Dohil
| Jurisdiction | England & Wales |
| Judge | MR SIMON PICKEN QC |
| Judgment Date | 20 December 2011 |
| Neutral Citation | [2011] EWHC 3302 (QB) |
| Docket Number | Case No: HQ10X01406 |
| Court | Queen's Bench Division |
| Date | 20 December 2011 |
[2011] EWHC 3302 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Simon Picken QC
(Sitting as a Deputy Judge of the High Court)
Case No: HQ10X01406
Adam Solomon (instructed by Portner & Jaskel LLP) for the Claimant
The Defendant did not appear and was not represented.
Hearing date: 27 October 2011
APPROVED JUDGMENT
Introduction
This is a claim in respect of a personal guarantee provided by the Defendant ("Mr Dohil") to the Claimant ("United Trust Bank") in the context of, and as security for, a loan ("the Loan") taken out with United Trust Bank by Mayfield House (Moseley) Limited ("Mayfield"). The claim is for £250,000, together with interest.
The Guarantee
The personal guarantee ("the Guarantee") was entitled "Guarantee Given By An Individual" and was dated 2 May 2007. The parties were described as being "The person or persons named in Schedule 1 (the 'Guarantor')", namely Mr Dohil, and United Trust Bank which was described as the "Bank". In Clause 1.1, the "Principal Debtor" was defined as being "the person or persons whose name and address is specified in Schedule 2", namely Mayfield.
Under Clause 2.1, it was agreed as follows:
"2. Guarantee and indemnity
2.1 In consideration of the Bank making or continuing losses or advances to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Principal Debtor for so long as it may think fit, the Guarantor hereby irrevocably and unconditionally guarantees to pay to the Bank on demand all moneys and discharge all obligations and liabilities now or hereafter due, owing or incurred by the Principal Debtor to the Bank when the same become due for payment or discharge whether by acceleration or otherwise, and whether such moneys, obligations or liabilities are express or implied, present, future or contingent, joint or several, incurred as principal or surety, originally owing to the Bank or purchased or otherwise acquired by it, ….
In Clause 1.1, "Guaranteed Liabilities" is defined as meaning "all moneys, obligations and liabilities expressed to be guaranteed by the Guarantor in clause 2.1".
Clause 2 continues, inter alia, as follows:
"2.2 The total amount recoverable from the Guarantor under this Guarantee shall not exceed the amount (if any) specified in Schedule 3 (Total amount recoverable under this Guarantee) or its equivalent (as determined by the Bank) in any currency in which any Guaranteed Liabilities are expressed (and if no amount is so specified this clause 2.2 shall have no effect) together with a further sum for all interest, commission, fees and other charges and all legal and other costs, charges and expenses as stated in clause 2.1 as shall have accrued or shall accrue due to the Bank at any time before or after the date of demand hereunder.
…
2.4 Any statement of account prepared by the Bank in relation to the Principal Debtor, signed as correct by an officer of the Bank, showing the amount of the Guaranteed Liabilities shall, in the absence of manifest error, be binding and conclusive on and against the Guarantor.
2.5 The Guarantor agrees to pay interest on each amount demanded of it under this Guarantee from the date of such demand until payment (as well after as before judgment) at the rate of two per cent. (2%) per annum above the Base Rate of Barclays Bank PLC as published from time to time or at such higher rate as may from time to time be payable by the Principal Debtor or would have been payable but for the incapacity of the Principal Debtor or any arrangement or composition with the creditors of the Principal Debtor upon such days and upon such terms as the Bank may from to time determine. Such interest shall be compounded in the event of it not being actually paid with quarterly rests in accordance with the usual practice of the Bank but without prejudice to the Bank's right to require payment of such interest when due."
The amount specified in Schedule 3 (as referred to in Clause 2.2) is £250,000. Other provisions include the following:
(1) Clause 4.2:
"4.2 The Bank shall not be obliged to make any claim or demand on the Principal Debtor or to resort to any Collateral Instrument or other means of payment now or hereafter held by or available to the Bank before enforcing this Guarantee and no action taken or omitted by the Bank in connection with any such Collateral Instrument or other means of payment shall discharge, reduce, prejudice or affect the liability of the Guarantor under this Guarantee nor shall the Bank be obliged to apply any money or other property received or recovered in consequence of any enforcement or realisation of any such Collateral Instrument or other means of payment in reduction of the Guaranteed Liabilities."
(2) Clause 6:
"6. Expenses
The Guarantor agrees to reimburse the Bank on demand for all legal and other costs, charges and expenses on a full and unqualified basis which may be incurred by the Bank in relation to the enforcement of this Guarantee against the Guarantor."
(3) Clause 8.3 ("Payments; currencies and taxes"):
"8.3 All payments to be made by the Guarantor under this Guarantee shall be made in full, without any set-off, condition or counterclaim whatsoever and, subject as provided below, free and clear of any deductions or withholdings whatsoever. …".
(4) Clause 9.3:
"9.3 No failure or delay on the part of the Bank to exercise any power, right or remedy under this Guarantee or at law shall operate as a waiver thereof nor shall any single or any partial exercise or waiver of any such power, right or remedy preclude its further exercise or the exercise of any other power, right or remedy."
Importantly, as will become apparent, Clause 11 ("Notices") provides as follows:
"11.1 Each party may give any notice, request, demand or other communication under or in connection with this Guarantee by letter, facsimile or other comparable means of communication addressed to the other party at the address identified with its name below. Any such communication will be deemed to be given as follows:
11.1.1 if personally delivered, at the time of delivery;
11.1.2 if by letter, at noon on the Business Day following the day such letter was posted (or in the case of airmail, seven days after the envelope containing the same was delivered into the custody of the postal authorities); and
11.1.3 if by facsimile transmission or comparable means of communication during the business hours of the other party then on the day of transmission, otherwise on the next following Business Day.
11.2 In proving such service it shall be sufficient to prove that personal delivery was made or that such letter was properly stamped first class, addressed and delivered to the postal authorities or in the case of facsimile transmission or other comparable means of communication, that a confirming hard copy was provided promptly after transmission."
The Loan
As to the Loan between United Trust Bank and Mayfield, this was entered into on 3 April 2007, the date when Mr Dohil signed on Mayfield's behalf a Loan Facility letter dated 30 March 2007 (not 2 May 2007, as pleaded in the Particulars of Claim). It was for a maximum amount of £723,000 (in accordance with Clause 1.1 of an earlier Loan Facility letter dated 9 February 2007 which was supplemented by the Loan Facility letter dated 30 March 2007), and was taken out by Mayfield in order, as Mr Dohil explained in his witness statement, to finance the purchase of 49 Mayfield Road, Moseley, Birmingham, a residential dwelling which Mayfield had purchased with the benefit of planning permission authorising its demolition and the construction of a number of apartments. This is reflected by Clause 2.1 ("Purpose of the Loan"), as follows:
"2.1 You may take the Loan in the following stages:
a. £290,000 to assist with the purchase of 49 Mayfield Road, Moseley, Birmingham, B13 9HT (the 'Property');
b. £400,000 to demolish existing house and build a single block of 5 x 3 bedroom flats at the Property (the 'Works'); and
c. £33,000 to pay interest."
Other terms of the Loan included: Clause 5 ("Final repayment of the Loan"), which provided that Mayfield had to repay the loan, interest and any other amounts due in full, by 19 February 2008; and Clause 10 ("Security for the Loan"), which provided that the security for the loan was to include "a guarantee in our standard form for £250,000 from Dalmit Singh Dohil" (see Clause 10.1d). Indeed, both the Loan Facility letter dated 9 February 2007 and the Loan Facility letter dated 30 March 2007 were signed not only by Mr Dohil on behalf of Mayfield but also by him on his own behalf in terms which stated that he agreed to the Loan's terms and conditions. This was Mr Dohil signing as the intended guarantor since, as I have explained previously, the Guarantee was entered into later, on 2 May 2007.
In addition, as made clear in the opening paragraph of the Loan Facility letter dated 9 February 2007, the Loan was not only subject to the terms and conditions contained in the letter itself but also in "the enclosed document headed 'Loan Account Terms and Conditions' dated July 2005". That document contained the following provision:
"7. Payments
7.1 All payments to be made by you under the Letter and/or these Loan Account Terms and Conditions shall be made by you to us without any set-off or counterclaim, deduction or withholding and free and clear of any restrictions or conditions in pounds sterling and in cleared funds not later than 12 Noon (London time) on the due date for payment."
The claim
On United Trust Bank's behalf, Mr Solomon submitted that there is no defence to the claim. His position was that the claim could not be more...
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