Hope Capital 2 Limited vs Stephen Michael Jones

This case involved an appeal against a summary judgment in favor of Hope Capital 2 Limited, concerning a loan agreement and a subsequent new agreement that allegedly varied the original terms.

TLDR:

• Hope Capital 2 Limited granted a loan to Sphere Property 2 Limited, guaranteed by Stephen Michael Jones.
• Sphere Property 2 Limited defaulted on the loan repayment.
• Hope Capital 2 Limited sought summary judgment for the outstanding loan amount.
• Jones appealed, arguing a new agreement varied the original loan terms.
• The High Court dismissed the appeal, upholding the summary judgment.

The claimant, Hope Capital 2 Limited, is a specialist provider of business loans. The defendant, Stephen Michael Jones, was a director of Sphere Property 2 Limited, which defaulted on a £2.1 million loan provided by the claimant.

In October 2018, Hope Capital 2 Limited entered into a loan agreement with Sphere Property 2 Limited, secured on properties owned by the company. Jones and another director, Alexander Collier, provided a Deed of Guarantee and Indemnity for the loan.

When the loan fell due on 29 April 2019, Sphere Property 2 Limited failed to repay it. Despite the sale of the secured properties, substantial sums remained outstanding. Hope Capital 2 Limited demanded payment from Jones under the guarantee, which he failed to pay.

In January 2020, Sphere Property 3 Limited, another company directed by Collier, provided additional security to Hope Capital 2 Limited by granting a second charge over another property. This led to the appointment of LPA Receivers and subsequent sale of the property, which did not cover the debt owed.

Jones raised several defenses, including the existence of a new agreement that allegedly varied the original loan terms. However, the court found no evidence supporting this claim and granted summary judgment in favor of Hope Capital 2 Limited.

On appeal, Jones argued that the new agreement, which involved additional security and deferred enforcement, varied or discharged his obligations under the original loan agreement and guarantee. The High Court examined the evidence, including the documentation provided by Hope Capital 2 Limited.

The court found that the new agreement did not vary or discharge the original loan terms or Jones's obligations under the guarantee. The terms of the guarantee explicitly stated that variations or extensions would not affect the guarantor's liability.

Consequently, the High Court dismissed the appeal, upholding the summary judgment in favor of Hope Capital 2 Limited for the outstanding loan amount.

Legal representatives: Damian Falkowski and Dr. Anton van Dellen (instructed on Direct Access) for the Defendant, Andrew Vinson (instructed by Prosperity Law LLP) for the Claimant.

Judicial Panel: Richard Spearman K.C. (Sitting as a Deputy Judge of the Chancery Division)

Case Citation Reference: [2024] EWHC 1308 (Ch)