BR-2024-000761 - [2025] EWHC 2900 (Ch)

I do not understand that there is any contest that there was a relationship giving rise to rights and duties between SIA and Mr Leahy. The relationship is governed by the unlimited guarantee.

The main issue is whether there was a promise or a representation by SIA that it would not enforce the personal guarantee unless there was repayment to MCL. To put it another way, SIA would not rely on its strict legal rights to enforce under limb 1 of the Effective Date.

In answer to this question, I am persuaded that a combination of the following events is sufficient to raise a substantial and genuine dispute:

In my judgment the response from Leanne Van Vuuren on 15 September to the query about deleting limb 1 of the Effective Date makes it inherently plausible that she understood that limb 1 was not to be relied upon by SIA. She does not express surprise that Mr Leahy has raised the issue but thinks it is resolved: “This is under the Effective Date definition”.

There is a genuine triable issue that her evidence will support Mr Leahy’s evidence (she provided no evidence on the Application), since she wrote: “will have to come up with a way to implement that …” meaning, to implement the exclusion of limb 1 of the Effective Date.

The response from Mr Schneider on 15 September 2022 to the query made by Mr Leahy provides a springboard for evidence to be given in relation to reliance. He said: “Net net the PG only extends if we don’t pull out and you repay him”.

Mr Leahy says in his written evidence that he relied on the 15 July 2022 phone call that there was an agreement. He says [31]:

“On the represented basis that the personal guarantee would only be relied upon by the Respondent if the Junior Debt was repaid to MCL as confirmed by the written and verbal assurances provided by the Respondent to me (including during the call with Sonny Schneider on 15th July 2022) and on which I reasonably relied upon, I signed the personal guarantee in late September 2022.”

I was not addressed as to how the evidence of Mr Leahy (on the issue of reliance) is inherently implausible. In my judgment it is not appropriate at this hearing to go behind his sworn evidence.

There is a genuine triable issue that the e-mail at 14:21 on 16 September from Mr Schneider can be read as focussing on limb 2 only. This is a matter that requires cross-examination, but for the purposes of the Application it is not inherently implausible that Mr Schneider intended enforcement only if payment was made to MCL: a limb 2 Effective Date event.

In my judgment there is a genuine and substantial dispute as to reliance on the representations made during the phone call and the later statement of Mr Schneider in September 2022. Mr Leahy responded directly after the e-mail sent by Mr Schneider on 16 September. There is no evidence he conceded the issue of limb 1, but following the September exchange Mr Leahy was prepared to execute the unlimited personal guarantee and said so in response.

I find there is a genuine and substantial dispute of whether it would be inequitable to resile from the representations made. If a court were to find that as a fact (on the balance of probabilities) that Mr Leahy did rely on the representations made there is a genuine triable issue that it will find it inequitable to allow SIA to resile.

SIA has not sought to argue the issues of reliance or inequitable behaviour, as it relies on “inherent implausibility” that that there were representations to the effect that limb 1 was not to be relied upon: see paragraphs 40-41 above. This will require SIA demonstrating that the reasons given for the execution of an unlimited guarantee when SIA had the benefit of a limited guarantee did not, given all the circumstances, relate to a risk that MCL would be repaid ahead of SIA only.

For reasons I have given there is sufficient evidence to raise a substantial and genuine dispute on all elements of a promissory estoppel defence.