RAEL HODES v JACK FRANKEL
[2023] EWHC 442 (Ch)
Mark Shaw v The Estate of Martin Wood
27 April 2023
[2023] EWHC 975 (KB)
High Court
A man lent money to another man who ran a helicopter business. The business went bankrupt. The lender said the loans were to the man, not the business. The judge agreed, based on the documents they both signed, and the man's estate now owes the money.
Key Facts
- •Claimant, a hotelier, made various loans to Mr. Martin Wood (deceased) between 2011 and 2019.
- •Loans were allegedly made to Mr. Wood personally, but the Defendant (Mr. Wood's estate) claims they were to MWH (Mr. Wood's company).
- •Most loans were documented in written agreements signed by both Claimant and Mr. Wood, but discussions were solely between the Claimant and Mr. Wood.
- •The key issue was whether the loans were to Mr. Wood personally or to MWH.
- •The Superseding Agreement (April 2019) aimed to consolidate previous loan agreements.
- •MWH went into administration after Mr. Wood's death.
Legal Principles
When parties deal face-to-face, there's a strong presumption they intend to contract with the person present.
Chitty on Contracts 34th Ed 5-040
In determining the identity of the contracting party, the court's approach is objective, not subjective. The question is what a reasonable person would conclude based on the information.
Hamid v Francis Bradshaw Partnership [2013] EWCA Civ 470
Prima facie, a person signing a document intends to be bound by it. To avoid personal liability, they must qualify their signature or make it plain the contract doesn't bind them personally.
Internaut Shipping GmbH v Fercometal Sarl [2003] EWCA Civ 812
Where parties agree terms and then record them formally in a signed document, discrepancies are addressed through rectification, but a contract still exists.
Chitty para 4-40
The parol evidence rule generally prevents oral evidence from adding to, subtracting from, or varying written terms, except in exceptional circumstances.
Hamid v Francis Bradshaw Partnership [2013] EWCA Civ 470
Outcomes
Judgment for the Claimant.
The court found the loans were made to Mr. Wood personally, not MWH, based on the evidence, particularly the written agreements and the Defendant's lack of credibility.
Claimant awarded £1.13m plus interest at 4% p.a. from October 1, 2019.
This reflects the total outstanding loans after accounting for repayments and corrections to the Superseding Agreement.
Defendant's arguments regarding oral agreements and lack of consideration in the Superseding Agreement were dismissed.
These arguments were deemed to be new points not properly pleaded and therefore inadmissible.