United Trust Bank Ltd v Konstantinos Diamantopoulos (2020)
Summary judgment was granted on a claim to enforce a personal guarantee in respect of a loan secured on a property where an assurance relied on by the guarantor, that the guarantee would not be enforced unless there was a shortfall after the property was sold, was not a clear promise.
The claimant bank applied for summary judgment on its claim against the defendant for sums due under a personal guarantee.
The defendant's company had taken a loan from the bank for a property development project secured by a first legal charge over the property, a debenture and a personal guarantee from the defendant. The bank agreed to lend further sums in return for a new and amended personal guarantee. The company defaulted and the bank sought to enforce the personal guarantee. The defendant in his defence relied on an alleged verbal exchange at a site meeting in which he said that he had asked an employee of the bank why he needed to sign a new guarantee, and the employee had replied that it was in case the property was sold and there was a shortfall. The property had not yet been sold.
The defendant argued that he had taken the reply as an assurance that his personal guarantee would not be resorted to until after the property was sold and that the bank was prevented from enforcing the guarantee until a shortfall had arisen.
Whether something along the lines of what the defendant had pleaded might have been said at the site meeting could not be resolved without a trial. However, what the defendant claimed to have been said did not, objectively, amount to the assurance he needed for there to be any possible defence to the bank's claim. The question and answer that the defendant says he recalled did not unequivocally indicate that the bank would never sue the defendant to judgment on his personal guarantee until after the sale of the property and there was still a net shortfall. It did not come close to a clear promise. There was no defence with any prospect of success (see paras 21-22, 24 of judgment).
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