Hope Capital 2 Limited v Stephen Michael Jones
[2024] EWHC 1308 (Ch)
Charles Roberts v Kseye Capital No.1 Limited & Anor
17 November 2023
[2023] EWHC 2927 (Ch)
High Court
A man guaranteed a company's loan. The lender tried to make him bankrupt. He said they didn't properly ask for the money. The judge said he *still* owed the money because the contract said he was responsible regardless. The higher court agreed.
Key Facts
- •Kseye Capital provided bridging finance to GBQ Investments Limited, secured by various securities.
- •GBQ defaulted on the loan, and Mr. Roberts provided a guarantee limiting his liability to £1,000,000 plus interest and costs.
- •Kseye served a bankruptcy petition on Mr. Roberts.
- •Mr. Roberts disputed the petition debt, arguing that no valid demand for payment had been made under the guarantee.
- •The District Judge ordered Mr. Roberts bankrupt, finding that the demand issue did not justify dismissing the petition.
- •Mr. Roberts appealed, arguing the District Judge applied the wrong legal test and made erroneous factual findings.
- •Kseye argued that Mr. Roberts' liability was primary, not contingent on a demand.
Legal Principles
A bankruptcy petition can be dismissed if the debtor has a genuine dispute on substantial grounds.
Markham v Karsten [2007] EWHC 1509 (Ch)
Appellate courts should be hesitant to overturn a lower court's decision based on minor errors in judgment writing, focusing on the overall application of the law.
Piglowska v Piglowski [1999] 1 WLR 1360
When assessing findings of fact, appellate courts consider whether primary findings were made correctly and the overall evaluation of facts.
Assicurazioni Generali SpA v Arab Insurance Group (Practice Note) [2003] 1 WLR 577, Re Sprintroom [2019] EWCA Civ 932
In cases of primary obligations payable on demand, the debt arises immediately and is not contingent upon the making of a demand.
MS Fashions Ltd v BCCI [1993] Ch 425, Levin v Tannenbaum [2013] EWHC 4457 (Ch)
The Ejusdem Generis principle limits general words to things of the same genus as preceding specific words. However, its application depends on whether the preceding words form a genuine genus.
Lambourn v McLellan [1903] 2 Ch 268, Lewison on The Interpretation of Contracts (7th ed) at 7.130-7.142
Outcomes
Appeal dismissed.
The Court of Appeal found that the District Judge, despite some errors in wording, correctly applied the 'genuine dispute on substantial grounds' test. Even if the District Judge had erred, the Court of Appeal found Mr. Roberts liable as a principal debtor under Clause 2.2 of the Guarantee, regardless of whether a demand was served.
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