Key Facts
- •JBR Capital Limited (Claimant) provided finance to JM Investments/Trading Ltd (First Defendant) under four hire purchase agreements for high-end vehicles.
- •The Claimant terminated the agreements for arrears and claimed the outstanding balance plus interest.
- •Mr. Karan Abbott (Second Defendant) provided personal guarantees for the agreements.
- •The agreements contained clauses regarding late payments, termination, and consequences of termination.
- •The guarantees contained clauses for unconditional guarantee and indemnity.
- •Disputes arose regarding the validity of termination, enforceability of guarantees, credit amounts for vehicle sales, and interest calculations.
- •The vehicles were repossessed and sold.
- •The Defendants argued waiver, estoppel, and the Statute of Frauds.
Legal Principles
Equitable doctrine of forbearance (promissory estoppel)
Hughes v Metropolitan Railway (1877) 2 App. Cas. 439
Waiver of contractual rights
The Scaptrade [1983] QB 529 (CA)
Statute of Frauds
Section 4 of the Statute of Frauds
Construction of contracts (including guarantees)
Actionstrength Limited v International Glass [2003] UKHL 17; Paul James Egan v Static Control Components (Europe) Ltd [2004] EWCA Civ 392; Fairstate Ltd v General Enterprise [2010] EWHC 3072; Perrylease Ltd v Imecar [1988] 1 WLR 463; State Bank of India v Kaur (1995) Times 22 April 1995; Westvilla Properties v Dow Properties [2010] EWHC 30 (Ch); Chartbrook v Persimmon Homes [2009] UKHL 8
Interpretation of contractual clauses
Chitty on Contracts
Outcomes
Claimant's termination of agreements was lawful and effective.
Defendants' arguments of waiver and estoppel failed; notices of termination were validly served.
Third and Fourth Guarantees were enforceable.
Subject matter of guarantees was identified; extrinsic evidence admissible to clarify missing details; separate indemnity clause applicable.
Claimant's credit for Bentley's sale was justified.
Claimant's evidence of Bentley's poor condition was preferred; no breach of clause 8.2.
Claimant's interest calculation was upheld.
Clause 8.2 didn't require credit 28 days after repossession; credit given on sale dates was appropriate due to market conditions and Abbott's actions.
Claims allowed against both defendants in the sums claimed.
Based on the above findings.