Barclays Bank Plc v Price & Ors, Court of Appeal - Commercial Court, October 18, 2018, [2018] EWHC 2719 (Comm)

Resolution Date:October 18, 2018
Issuing Organization:Commercial Court
Actores:Barclays Bank Plc v Price & Ors
 
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Claim No LM-2018-000037

Neutral Citation Number: [2018] EWHC 2719 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

LONDON CIRCUIT COMMERCIAL COURT (QBD)

Date: 18/10/2018

BEFORE:

DANIEL TOLEDANO Q.C.

(SITTING AS A DEPUTY HIGH COURT JUDGE)

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BETWEEN:

BARCLAYS BANK PLC

Claimant

and

(1) MR FRANKLIN RICHARD PRICE

(2) MR SIMON CHRISTOPHER REES-HOWELL

(3) MR JULIAN MORGAN SKEENS

(4) MR PHILIP GRAHAM COHEN

(5) MR CHARLES ERIC GERADA AZZOPARDI

Defendants

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Mark Warwick Q.C. (instructed by Gordon Dadds LLP) for the Applicant/Fourth Defendant

Robert Scrivener (instructed by Dentons UK and Middle East LLP) for the Respondent/Claimant

Hearing date: 12th October 2018

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JUDGMENT

  1. This is an application by the Fourth Defendant (``Mr Cohen'') to strike out the claim of Barclays Bank Plc (``Barclays'') against him, alternatively for summary judgment in his favour.

    Background

  2. Mr Cohen was one of the directors of the law firm Jeffrey Green Russell Limited (``JGR''). JGR went into liquidation owing sums to Barclays. The Bank is therefore seeking to enforce its rights under guarantees that were provided to it by the directors, including by Mr Cohen.

  3. In 2012 Barclays had provided to JGR the 2012 Overdraft Facility and the 2012 Term Loan. These arrangements required security to be provided in the form of guarantees. The required security was described in the 2012 Overdraft Facility and in the 2012 Term Loan as including ``A guarantee from Philip Graham Cohen on the Bank's standard form limited to £55,500.00...''

  4. Mr Cohen and the other Defendants executed guarantees in favour of Barclays on, I am told, nearly identical terms on or around 20 August 2012. The guarantees were entered into by way of deed. Mr Cohen's Guarantee provided as follows:

    a. Clause 1.1 - that Mr Cohen would unconditionally guarantee that all Customer Liabilities [any money and liabilities which JGR now owes or may owe in the future in any way] will be paid or be satisfied. Mr Cohen would immediately pay the amount guaranteed when Barclays made demand.

    b. Clause 2.1 - that the Guarantee was for the full amount of all Customer Liabilities. However, the total amount that Mr Cohen had to pay under the Guarantee would not be more than the Specified Amount, plus interest and certain other amounts.

    c. Clause 6 - that Mr Cohen was liable to Barclays as principal debtor for any Customer Liabilities that cannot be recovered from him as guarantor. This was a separate commitment, extra to the guarantee in clause 1.1. The amounts for which Mr Cohen was liable under this clause had to be paid for as soon as Barclays demanded payment. The total amount Mr Cohen would have to pay would be no more than that mentioned in clause 2.

    d. Clause 11 - this concerned serving demands and notices. It provided in clause 11.1 that a demand or notice ``may'' be made or given by a letter addressed to an Authorised Address. Clause 11.2 provided that a demand or notice would be treated as properly served when it is left at an Authorised Address (if delivered by hand) or at noon on the day after it was posted if it was sent by post to an Authorised Address, even if it is not delivered or returned undelivered.

    e. The Specified Amount calculated in a Schedule to the Guarantee was an amount equal to the Customer Liabilities at the relevant time in respect of the aggregate of the following - (a) one ninth of the balance outstanding on the 2012 Term Loan plus (b) a maximum of £55,000 of the balance outstanding on the 2012 Overdraft Facility or any other account which may be substituted for it.

  5. The 2012 Term Loan was repaid. The 2012 Overdraft Facility was refinanced in August 2013. This was achieved by Barclays entering into a 2013 Facility Agreement with JGR in the amount of £600,000. No new security was required. However, the 2013 Facility Agreement expressly referred to the existing security which was listed in the Schedule to the Commercial Terms. This Schedule set out the existing security and referred, inter alia, to a guarantee from Mr Cohen for £55,500.

  6. Barclays' case is that the 2013 Facility Agreement account was substituted for the 2012 Overdraft Facility account. Mr Cohen denies that this substitution took place. The parties have not suggested that this issue can be resolved on this application. Accordingly, the issue of account substitution will be an issue for trial.

  7. On or around 16 October 2015 Barclays sent the First Demand to Mr Cohen. This was sent to his correct address. It demanded payment forthwith of Mr Cohen's liability pursuant to the guarantee dated 20 August 2012 of the liabilities of JGR as specified below. It then listed the ``principal sum due'' as being £55,500, interest of £0 and therefore the ``total outstanding'' as £55,500.

  8. It will be apparent that the amount...

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