Mccrae vs The LorEau Group FZ LLC and Taylor

This case involved a dispute over the repayment of a corporate debt and the personal liability of the company's general manager.

TLDR:

• Ms Julie Mccrae lent AED 500,000 to The LorEau Group FZ LLC.
• Repayment was due by 31 July 2022 but did not occur.
• The court ruled in favor of Ms Mccrae against LorEau but dismissed the case against Mr Taylor.
• Interest on the judgment sum was set at 5% per annum from 1 August 2022.
• The court made a costs order nisi with no order as to costs unless varied by 2 November 2023.

The claimant, Ms Julie Mccrae, lent AED 500,000 to The LorEau Group FZ LLC (LorEau) under a Bridging Loan Term Sheet dated 17 January 2022. The loan was to be repaid by 31 July 2022 with an agreed interest of AED 100,000, totaling AED 600,000.

When the repayment did not occur, Ms Mccrae sought to recover the outstanding amount from LorEau and its general manager, Mr Christopher Taylor. Mr Taylor signed the agreement on behalf of LorEau but disputed any personal liability.

Mr Taylor argued that he had no personal liability under the Original Agreement, acting merely as an agent for LorEau. The court found no evidence to suggest that Mr Taylor warranted repayment or assumed personal liability for the loan.

Mr Taylor also contended that the Original Agreement was restructured into three separate personal loans among the company's representatives. However, the court found that the Original Agreement remained extant and had not been novated.

The court examined evidence including emails, WhatsApp messages, and minutes of a meeting held on 8 August 2022, which discussed the restructuring plan. Despite these discussions, no formal agreements were drawn up, and one of the partners, Mr Victor Krrashi, declined to participate.

The court concluded that the Original Agreement was not replaced by the Restructured Agreement. Consequently, the corporate repayment obligation remained, and the cumulative debt was reduced to AED 545,000 after accounting for partial payments received.

Regarding the status of LorEau, the court found that the company had entered into shareholders' voluntary liquidation but had not been officially liquidated. Therefore, judgment was entered against LorEau, with the case against Mr Taylor dismissed.

Legal representatives: Mr Shakeel Ahmed, Mohamed Eid Al Suwaidi Advocates & Legal Consultants, for the Claimant; Mr Ne'l Drahmoune, Fotis International Law Firm, for the Defendants.

Judicial Panel: Justice William Stone SBS KC

Case Citation Reference: [2023] ADGMCFI 0018