![BL-2022-000438 - [2025] EWHC 2212 (Ch)](https://backend.juristeca.com/files/emisores/logo_O3rEzCI.png){kind=logo}
Conclusions
Conclusion
Notwithstanding that it was common ground between the parties that the project of developing the villas was a joint venture, between Mr Dunn on the one hand and Mr Kazolides and Mr Stylianou on the other hand, which involved profit and loss sharing, both parties argued for starkly different outcomes.
On the Claimant’s case, he contended that, notwithstanding the failure of the project, the entire loss for the project should fall on Mr Kazolides with Mr Dunn receiving a full return with 8% interest compounded from 2008. That, in my view, was an unrealistic case in light of the terms of the JVA and the context in which it arose.
On the Defendant’s side, he claimed that no guarantee had been agreed and that Mr Dunn was to bear the bulk of the economic risk of the project. Again, I found that to be an unrealistic case.
As explained in further detail above, I have concluded:
Mr Kazolides did give a guarantee as set out in clause 18 of the JVA;
By at the latest 30 September 2009, the Company was insolvent and the PD Loan had fallen due for repayment. The Company was unable to repay the loan and was in default. Accordingly the cause of action under the guarantee had accrued by this point.
Irrespective of the question of whether the limitation period for the JVA was 6 or 12 years, the guarantee claim was brought out of time and is statute barred.
At some point after October 2009, Mr Dunn and the Company reached an understanding that the villas would not be sold as soon as practicable but instead at a time and price of Mr Dunn’s choosing. Mr Dunn would fund the Company until that point and would not require repayment of the PD Loan prior to that.
The understanding was binding on the Company and Mr Dunn and had the effect of discharging Mr Kazolides’ guarantee.
In the circumstances, the claim must fail.
- Heading
- I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic Introduction
- The Parties and other relevant persons
- The Land
- The Contractual Arrangements
- General Observations on the Evidence The oral witness evidence
- The recollection of witnesses generally
- The central issues for determination
- The Construction Issues
- The profit sharing arrangements under the JVA
- The payment waterfall under the JVA
- The Guarantee Validity Issues
- Validity Issue 1: Did Mr Kazolides provide a guarantee under the JVA?
- The argument that the joint venture was intended to be a 50/50 arrangement and the guarantee is inconsistent with that arrangement
- The failure to name Mr Kazolides expressly and the Statute of Frauds
- Whether Mr Michael had authority to enter the guarantee
- Validity Issue 2: Should clause 18 be rectified to name Mr Kazolides as the Guarantor?
- The Limitation Issues
- Limitation Issue 1: Is the Limitation Period 6 or 12 years?
- Limitation Issue 2: What is the test for insolvency under clause 5(c)?
- Limitation Issue 3: Was the Company in default more than 6 / 12 years before the issue of the claim?
- The expert evidence on valuation of the Property
- The Liabilities of the Company in March and December 2010
- The solvency of the Company in early March 2010
- Cashflow insolvency
- Legal Principles
- Variation of the contract between creditor and debtor
- Agreement between creditor and debtor to give debtor additional time to pay
- Breach by the creditor
- Grounds for Discharge
- Discharge Ground 1: Material change in the JVA due to the execution of the SJVA
- Discharge Ground 2: Mr Dunn giving an extension of time for payment by the Company
- Discharge Ground 3: Breaches of or a departure from the terms of the JVA in relation to the timing of the sale of the villas and other matters relating to the joint venture
- Discharge Ground 4: An oral agreement between Mr Dunn and Mr Kazolides
- Other matters
- Conclusions