[2025] EWHC 908 (Ch)

HNW carries on business as an FCA authorised peer-to-peer lender arranging loans from lenders to businesses. Ms Lawrence, at the time of the material events in this case, was carrying on business as a property investor with a portfolio of ten residential properties in London and Surrey

The relevant facts concerning the making of the Loan Agreement, as evidenced by the contemporaneous documentary evidence, are as follows.

In or around August 2018 a Mr Harry Eddery (“Mr Eddery”) of Eunisure Limited, who was acting as a broker for Ms Lawrence, approached HNW to enquire about a loan for Ms Lawrence for the purpose of refinancing existing lending from third parties that had been taken for the redevelopment of the Property.

After some initial negotiations, on 20 September 2018 HNW made a loan offer of £800,000 secured by, amongst other things, a first charge on the Property. By 20 November 2018 the proposed loan amount had been increased to £900,000. On that day, Setfords forwarded a loan agreement in that amount which had been signed by Ms Lawrence in anticipation of completion.

On 29 November 2018 Fiona Bee (“Ms Bee”) of Berlad Graham LLP, the solicitors instructed on behalf of HNW, emailed Michael Kwatia (“Mr Kwatia”) on behalf of Setfords, raising enquiries regarding the loan amount. Specifically, Ms Bee noted that Ms Lawrence would have no funds remaining for the development of the Property once the existing charges had been paid off and that HNW would be open to lending further funds in return for first or second charges over other properties.

At 10:20 on 30 November 2018 Benjamin Shaw (“Mr Shaw”) , a director of HNW, emailed Mr Eddery, expressing his concern about the loan in its existing form and the limited security provided, anticipating that further advances in future might be required to enable Ms Lawrence to complete the development of the Property. She would need an additional £300k + to finish the development and he was not comfortable lending another £300k with the existing collateral. He asked whether HNW could get first or second charges on properties where currently HNW was only getting equitable charges behind existing lending or if HNW could otherwise repay the existing borrowing on those properties which would enable HNW to lend Ms Lawrence the extra £300,000 he thought she needed. In response, Mr Eddery emailed Mr Shaw that these issues could be “overcome no problem”. At 13:09 Ms Lawrence emailed Mr Shaw directly in response to the points raised in his earlier email to Mr Eddery. In response to the question about first or second charges on the other properties she wrote “Yes, 1^st or 2^nd charges”, indicating that 1^st or 2^nd charges could be obtained in respect of the other properties. Ms Lawrence also explained that she needed to complete on that same day in order to get away from the “extortion rates” being charged by Seculink, one of her then current lenders.

At 15:00 on the same day Ms Lawrence emailed Mr Shaw informing him that the development of the Property was close to completing and that she had access to approximately £180,000 from two family members who would provide her with any funds needed.

At 15:11 Ms Bee emailed Mr Kwatia stating she understood there was an update to the terms of the loan agreement and the requirement for signed legal charges to be provided in respect of the additional properties. She also requested an undertaking from Mr Kwatia to redeem the charges and notices against ten properties.

At 15:28 Ms Bee emailed Mr Kwatia stating as follows “Please see attached and confirm my amendments are agreed” and attaching the proposed loan agreement now amended by her in manuscript to show a significantly increased loan amount from £900,000 to £1.6 million and showing as collateral a first charge over the Property and amending details of the security to be provided, to include a first charge over four properties instead of two and the purpose of the loan being stated to be “Refinance to enable completion of build of [the Property]” instead of “Purchase of land and development.”

At 15:49 Mr Kwatia forwarded the emails of Ms Bee timed at 15:11 and 15:28 (including the proposed loan agreement with manuscript annotations) to Ms Lawrence and her partner Beresford Greene.

By this time Ms Lawrence was on a flight to Jamaica for her father’s funeral. Her evidence is that during the flight she received the 15:28 email from Fiona Bee which she “scan read” and that she noticed the attachment but did not read it.

At 15:51 Ms Lawrence texted Mr Kwatia “I hereby give you consent to sign on my behalf” and at 15:52 “Please send paperwork is email [sic] Beresford can have a look and he also have consent to give the go ahead on my behalf.” Ms Lawrence’s evidence is that in addition she sent an email to Mr Kwatia at 16:04 to proceed to sign the proposed loan agreement.

Mr Kwatia then reported to Ms Bee (at 16:21) by email that his client was not able to sign at the present time. Ms Bee replied confirming that they could not complete until Ms Lawrence had signed. Mr Kwatia responded by email at 16:25 stating, “Your client had spoken to mine about me signing as I have their consent”.

At 16:28 Ms Bee stated that the Land Registry would not accept the additional charges signed by Mr Kwatia on behalf of his client and suggested that Ms Lawrence was able to sign the copies electronically.

At 16:31 Mr Shaw emailed Ms Bee to confirm that Mr Kwatia would be calling her to “sort out a way you will both find acceptable”. Ms Bee then responded to Mr Shaw at 16:57 to confirm that partial completion would take place on that day with the urgent loans being paid off and funds being retained until the outstanding charges had been received.

Mr Kwatia then proceeded to take steps to complete the transaction. At 17:07 he provided an undertaking to Berlad Graham LLP (as requested in Ms Bee’s email at 15:11) that upon receipt of funds in respect of the Loan Agreement Setfords would redeem the charges and notices against the Property and three other properties. Ms Lawrence’s solicitors further undertook to provide HNW’s solicitors with the outstanding legal charges within 5 working days of completion. At 17:15 Ms Bee emailed Mr Kwatia, providing a completion statement confirming that the charge in favour of Seculink had been redeemed and that upon receipt of duly executed legal charges she would release the remaining completion funds in accordance with Setfords’ undertaking.

The completion statement showed the initial drawdown figure as being £1,600,000. This was subsequently reduced to £1,520,000 when HNW decided that it would be happy with a second charge on a property called Belenoyd Court and would not repay the £80,000 loan on that property.

At 17:19 Ms Lawrence sent a text to Mr Kwatia stating “… please can you gonahead [sic] Go ahead”.

At 17:33 Mr Shaw emailed Ms Lawrence confirming they had completed (“Nicole Glad to hear we have completed”) and requesting valuations for the Venus Mews Properties and the Watson Place Properties.Ms Lawrence replied by email to Mr Shaw at 18:26 saying, “Thank you very much, greatly appreciated! I will ask my broker to arrange valuations”.

Ms Lawrence directly and through her solicitors, subsequently provided HNW with the up-to-date redemption figures and signed legal charges to enable the release of the funds held by HNW following completion.

On 11 December 2018 Ms Lawrence emailed Mr Shaw to say that her understanding was that the original loan was for £900,000 and that if she wanted additional lending, first charges could be taken on two properties (Watson Place and Venus Mews) if needed but that she did not need the extra money yet and wanted to keep the repayments affordable.

On 19 December 2018 Mr Kwatia sent Ms Lawrence the updated completion statement for her records showing the £1,520,000 loaned.

Some eight months later, on 16 August 2019 Ms Lawrence emailed Mr Shaw informing him that she had expended her funds, including those from family members. She sought further borrowing of £100,000 for the purpose of completing the development of the Property. In an email dated 9 October 2019 Ms Lawrence referred to the redemption figure of £1,520,000. By an email dated 16 October 2019, she confirmed that she had received legal advice from her solicitor and was in a position to sign a further loan agreement with HNW. Further loan agreements between Ms Lawrence and HNW, signed by Ms Lawrence and witnessed by a solicitor and referring to the Loan Agreement, were made on the following dates and for the following amounts: 15 October 2019 (£67,000); 14 November 2019 (£50,000); 2 December 2019 (£50,000); 3 February 2020 (£60,000).

By July 2020 the development of the Property was still not completed and Ms Lawrence needed further funding. There were some negotiations between Ms Lawrence and HNW for a payment holiday but the relationship broke down. At some point, Ms Lawrence moved into the Property and is still living there.

On 21 October 2021 HNW through its solicitors sent a letter of demand to Ms Lawrence notifying her that the loan amount and interest were due and payable and that the security was now enforceable.