BL-2022-000438 - [2025] EWHC 2212 (Ch)

Fecha: 22-Ago-2025

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

H.2.3.

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;

164.

The Defendant contends that the guarantee is also discharged on the grounds that there has been a “not unsubstantial” breach by a creditor of a term of the principal contract which has been itself “embodied” into the guarantee (relying on Millett & Andrews §6-029).

165.

These points do not arise for consideration in light of my findings that (a) the Claimant’s claims are statute barred and (b) the guarantee was discharged pursuant to Discharge Ground 2, as set out in Section H.2.2 above.

166.

However, for completeness, I reach the following conclusions on this part of the case. In summary, the Defendant alleges the following breaches of the JVA:

(1)

Clause 9 –the parties failed to act in utmost good faith towards one another in all aspects and in particular in connection with leases and sales of the villas.

(2)

Clauses 1, 3, 8, 11, 12 and 14 – the joint venture ceased to be joint. The Defendant alleges that (a) Mr Dunn ran the venture for himself without regard for Mr Kazolides or Mr Stylianou; (b) Mr Dunn insisted that Mr Stylianou resign as a director and banned him from entering the property; and (c) Mr Dunn insisted on taking all or nearly all relevant decisions himself.

(3)

Clause 3(a)(ii) – the decision to replace the Company secretary in 2011.

(4)

Clause 3(c) – Mr Dunn’s failure to act in the best interests of the Company and on sound commercial profit-making principles.

(5)

Clause 15(1) – failure to keep full accounts sufficient to calculate the Net Profit or Net Loss.

(6)

Clause 6(d) and 15(2) – failure to prepare completion accounts forthwith after the sale of all of the villas.

(7)

Clause 8 – failure to keep Mr Kazolides informed of all aspects concerning the villas.

(8)

Clause 5(a)(iii) – causing the Company to accept loans in amounts which were not reasonable and which it did not reasonably require to complete the development.

(9)

Clause 14(2) - failure to obtain approval from Mr Kazolides in respect of any sales that took place or any leases.

167.

Putting aside the arguments over breach which were fact sensitive, I do not consider that the Defendant has established that these were the duties of the creditor in its principal contract with the Company. Further, I do not see that these were terms which were then embodied into the guarantee as an obligation of the creditor. In the circumstances, I do not consider that any of these matters could give rise to a discharge.