![BL-2022-000438 - [2025] EWHC 2212 (Ch)](https://backend.juristeca.com/files/emisores/logo_O3rEzCI.png){kind=logo}
Legal Principles
Legal Principles
There is a significant body of authority on the circumstances where a guarantee is discharged as is evident from a survey of the leading works. The Defendant contends that there are three legal principles which apply:
discharge by alteration to contractual obligations of the debtor / interference with the rights of the surety, per Holme v Brunskill (1878) 3 QBD 495;
discharge by giving time to the principal debtor, again per Holme v Brunskill;
discharge by the creditor’s breach and discharge by injuring the surety, per Andrews & Millett Law of Guarantees, para 9-036.
I address these principles below.
- 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