Blacklion Law LLP v Amira Nature Foods Ltd & Anor
[2023] EWCA Civ 663
Holman Fenwick Willan LLP v Wahid Samady
6 February 2023
[2023] EWHC 125 (KB)
High Court
Mr. Samady owed a lot of money to his lawyers. He signed a letter promising to pay, but then didn't pay on time and tried to argue he didn't have to because of some technicalities. The judge said the letter meant he had to pay, and he didn't have a valid excuse.
Key Facts
- •Mr. Samady instructed Holman Fenwick Willan LLP (HFW) and an associated entity, MEA LLP, for legal matters between 2018 and 2020.
- •A significant debt for legal fees (£415,967.91 initially) was owed to HFW.
- •A payment plan was agreed in a July 2020 letter, where Mr. Samady guaranteed the debts of his companies and personally guaranteed the total amount (£442,000 with a discount for prompt payment).
- •Mr. Samady failed to make timely payments as per the payment plan, leading to HFW seeking summary judgment.
- •Mr. Samady argued that the July 2020 letter was a contract of guarantee, allowing him to raise defences available to guarantors, including non-compliance with the Solicitors Act 1974, and set-off due to alleged negligence in disclosure by HFW.
- •HFW argued that the July 2020 letter constituted a contract of indemnity and guarantee, rendering Mr. Samady primarily liable and barring the use of guarantor-specific defences.
- •A significant part of the argument revolved around whether the invoices underlying the debt complied with the requirements of the Solicitors Act 1974 and whether the July 2020 letter superseded the need for compliant invoices.
Legal Principles
Construction of contracts: The court interprets contracts based on the words used in their context.
Case Law
Contracts of guarantee vs. indemnity: A guarantor is only liable if the primary obligor is liable, while an indemnifier has a primary liability.
Case Law
Solicitors Act 1974: Sections 69 and 70 dictate procedures for recovering solicitor's costs, including the requirement for a valid bill and the right to assessment.
Solicitors Act 1974
Implied terms: Terms can be implied into a contract if necessary to give business efficacy but only if they are so obvious that they go without saying.
Case Law
Repudiatory breach: A repudiatory breach allows the innocent party to terminate the contract, but pre-existing obligations remain.
Case Law
Outcomes
Appeal dismissed.
The July 2020 letter was construed as a contract of indemnity and guarantee, making Mr. Samady primarily liable. The Solicitors Act 1974 did not apply as the claim was based on the contract, not the underlying invoices. There was no implied term requiring HFW to exercise reasonable skill and care beyond its existing duty to its client, and even if there were, Mr. Samady failed to demonstrate loss. The acceleration clause in the July 2020 letter rendered the entire debt due immediately upon Mr. Samady's missed payment.