Clydesdale Bank Plc v Gough (t/a JC Gough & Sons), Court of Appeal - Chancery Division, September 05, 2017,  EWHC 2230 (Ch)
|Resolution Date:||September 05, 2017|
|Issuing Organization:||Chancery Division|
|Actores:||Clydesdale Bank Plc v Gough (t/a JC Gough & Sons)|
Claim No. C30BM281
Neutral Citation Number:  EWHC 2230 (Ch)
IN THE HIGH COURT OF JUSTICE
BIRMINGHAM DISTRICT REGISTRY
33 Bull Street
5th September, 2017
DEPUTY HIGH COURT JUDGE LANCE ASHWORTH QC
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CLYDESDALE BANK PLC
(1) R GOUGH T/A JC GOUGH & SONS
(2) ANNE MICHELLE GOUGH
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MR ALEC McCLUSKEY (instructed by Eversheds Sutherland) for the Claimant
MR GUY ADAMS (instructed by Michelmores LLP) for the Defendant
Anne Michelle Gough in person
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This is a claim brought by Clydesdale Bank plc (trading as Yorkshire Bank and Clydesdale Bank) (the ``Bank'') against (1) Roger Gough (trading as J C Gough and Son) and (2) Anne Michelle Gough (known as Michelle Gough) as well as against their sons, William and Edward Gough. The sons, who were joined to ensure that they were bound by the result, have taken no part in the proceedings and I do not need to consider their positions in any detail.
By this claim, the Bank seeks (1) possession of 2 properties, namely Hilltop Farm (title number WR90492) and the Chestnuts (title number WR131413) at Rochford, Tenbury Wells, Worcestershire, and seeks that possession be given up to Mr Simon Thomas and Mr Nicholas O'Reilly (the ``Receivers'), (2) an order that Mr Gough pay the sums advanced by the Bank to him totalling approximately £7 million inclusive of interest, secured by charges over those properties, and (3) an order that Mrs Gough pay the sums of £4,910,000 plus accrued interest, being part of the advances made by the Bank to Mr Gough, repayment of which Mrs Gough guaranteed.
Mr Gough had brought a counterclaim for damages against the Bank, but that was abandoned in his counsel's skeleton argument served the evening before trial and not pursued at trial. No formal notice of discontinuance has been served, so the Counterclaim will formally be dismissed, albeit that I will hear further argument on the precise terms of the order as set out below.
At the pre-trial review in this matter on 4th April, 2017, His Honour Judge McCahill QC extended the listing for this trial to 4 days with ½ day pre-reading and set a trial timetable, which envisaged the evidence being finished by the luncheon adjournment on day 3 with the rest of that day to be set aside for preparation of closing submissions and the parties to deliver their closing submissions on day 4.
The Bank has throughout been represented by Mr Alec McCluskey of Counsel. Mrs Gough has throughout acted in person, although in practice she has adopted those parts of the defence being advanced by Mr Gough as her own where relevant. At trial Mr Gough was represented by Mr Guy Adams of Counsel. Mr Adams had not been instructed until shortly before trial. When he became involved the shape of the case changed dramatically. An agreed list of issues had been filed, but in the event the vast majority of these have fallen away. Mr Adams indicated in his Skeleton Argument served the evening before the trial commenced that many of these would not be pursued. On the morning of day 4 of the trial, before Mrs Gough had been called to give evidence by Mr Gough but after all other witnesses had been called and cross-examined, Mr Adams sought to introduce very substantial amendments to Mr Gough's pleaded case, which included for the first time a claim under the Consumer Credit Act 1974. I declined to grant permission for those amendments, coming as they did so very late in the day. That application is the subject of my earlier judgment in this matter, the contents of which are not repeated here. I understand that permission to appeal that earlier judgment was sought from the Court of Appeal (I having refused permission) and that Mr Gough sought a stay on me handing down this judgment. That application for permission to appeal was refused on 31st August, 2017 by Henderson LJ and therefore the question of the stay did not arise.
The trial bundles prepared for this matter include 12 lever arch files of chronological documents. Relatively few of these have been referred to in the course of the evidence and submissions. It is regrettable that greater thought was not given to what actually needed to be included in the bundles in particular by Mr Gough and his solicitors, whom I understand required (almost) every disclosed document to be included.
Mr Gough is and has been for many years a farmer. In particular, he grows potatoes. He farms at Hilltop Farm, which extends to approximately 530 acres. Hilltop Farm itself includes an 8 bedroom farmhouse and 5 other dwellings, at least 2 of which are run as holiday lets by Mrs Gough. The Chestnuts is registered as a separate title, but sits in the middle of Hilltop Farm, and is let under an assured shorthold tenancy.
Mr Gough banked with Barclays Bank (``Barclays''). In 2007 and 2008, the business suffered from 2 floods, each of which was said at the time to be a 100 year event. This was extremely unfortunate for Mr Gough. Substantial quantities of potatoes which were in the ground were lost. It appears, although Mr Gough chose not to make any substantial disclosure of documentation evidencing his relationship with Barclays, that these losses caused the business considerable financial strain so that in around 2012 Barclays handed the management of Mr Gough's account to its ``Business Support'' department.
In 2011, Mr Emyr Saer, the Agricultural Business Development Manager for the Bank based in the Gloucester branch, began to court Mr Gough's business. He understood from Mr Gough that Mr Gough was not happy with the banking arrangements he had with Barclays. At one point Mr Gough appears to have threatened litigation against Barclays or at least taking them to the Banking Ombudsman.
This courtship by Mr Saer was a lengthy process. The first note of a meeting between Mr Saer and Mr Gough to discuss Mr Gough moving from Barclays to the Bank was in March, 2012, although it appears consideration had been given by the Bank in 2011 to offering banking facilities. However, it was not until late 2012 that the Bank became the bankers to Mr Gough. I will revert below to the details of the discussions which took place and on which Mr Gough founds his Defence in this matter.
The Banking Documentation
In November and December, 2012 the following loans, charges and guarantee were entered into between the Bank and Mr Gough and/or Mrs Gough:
(a) On 9th November, 2012 the Bank and Mr Gough agreed a variable rate loan in the sum of £2,000,000 for a period of 2 years, subject to a number of preconditions;
(b) On 9th November, 2012 the Bank and Mr Gough agreed a part variable rate loan facility, part fixed rate loan facility in the sum of £2,250,000, repayable in instalments over a 15 year period, again subject to a number of preconditions;
(c) On 9th November, 2012 the Bank granted Mr Gough an overdraft facility of £650,000 and a business card in the amount of £10,000 each with an expiry date of 31st July, 2013, again subject to a number of preconditions. As with most overdrafts, all amounts outstanding were repayable on demand;
(d) On 23rd November, 2012 Mrs Gough executed a personal guarantee in favour of the Bank, guaranteeing the indebtedness of Mr Gough to the Bank up to the sum of £4,910,000 plus interest. On the same date, she executed a Certificate of Independent Legal Advice, which was also executed by Justin Parker, a partner at mfg solicitors, confirming that he had given the appropriate advice to Mrs Gough in respect of execution of the personal guarantee;
(e) On 7th December, 2012 Mr Gough executed a legal charge in favour of the Bank over Hilltop Farm. This charge is in standard form, entitling the Bank or Receivers appointed by it to take possession of and sell the property;
(f) On 7th December, 2012 Mr and Mrs Gough executed a legal charge in favour of the Bank over The Chestnuts. This charge is also in standard form, entitling the Bank or Receivers appointed by it to take possession of and sell the property;
(g) On 7th December, 2012 each of Mrs Gough and the 2 sons executed a Consent and Postponement of Interest in respect of Hilltop Farm in favour of the Bank.
The overdraft was never quite enough and there were subsequent formal extensions to the overdraft on 30th November, 2012 in the sum of £800,000, on 6th February, 2013 in the sum of £875,000, on 21st June, 2013 in the sum of £1,000,000 and on 26th June, 2014 in the sum of £1,762,867, expiring on 30th September, 2014. Save as to the amount, each of these overdraft letters was in the same form as the original overdraft of 9th November, 2012. There were also informal increases in the overdraft limit from time to time between the dates of these formal extensions, evidenced by emails between the Bank and Mr and Mrs Gough. By November, 2014 Mr Gough had therefore been granted overdraft facilities of more than £1 million more than the original overdraft had been for.
Each of the documents from the Bank granting loan or overdraft facilities included warnings highlighted in boxes in the documents:
(a) Each had on its front: ``This is an important document. You should take independent advice before signing and sign only if you want to be legally bound.''
(b) Each of the loan documents had on its signature page: ``THIS IS AN IMPORTANT LEGAL DOCUMENT. ONCE YOU HAVE SIGNED IT YOU WILL BECOME LEGALLY BOUND BY ITS TERMS. IN PROVIDING FACILITIES WE DO NOT GIVE ANY INVESTMENT, FINANCIAL, TAXATION, LEGAL OR OTHER ADVICE. YOU MUST SATISFY YOURSELF THAT A FACILITY IS SUITABLE FOR YOUR CIRCUMSTANCES AND PURPOSES. YOU SHOULD NOT ENTER INTO ANY LOAN DOCUMENTS IF YOU DO NOT UNDERSTAND THE RISKS (INCLUDING THE CONDITIONS AND, IN PARTICULAR, CONDITION 8 RELATING TO BREAK...
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