ING Lease (UK) Ltd v Harwood

An “all monies” guarantee does not automatically cover every liability later assigned to the creditor. Its scope depends on the parties’ presumed intention, assessed from the wording, contractual context and commercial purpose. Where the guarantee refers to facilities made available by the creditor and agreements between the creditor and the guaranteed company, that wording may confine the guarantee to liabilities arising from their mutual dealings.

Pre-contractual discussions remain negotiations unless objectively intended to have contractual effect. An implied term requires necessity, rectification requires convincing proof of a common continuing intention, and promissory estoppel requires a clear and unequivocal promise, reliance and detriment.

ING Lease (UK) Ltd claimed £361,759.48 from the former chief executive of Homebuy Group Plc under an all monies guarantee. The claim comprised a debt owed by Homebuy Direct (UK) Ltd in connection with the acquisition of the Coin TV business and debts originally owed by Value Rentals Group Ltd to Shire Leasing Plc under hire agreements, whose benefit was later assigned to ING.

The defendant accepted the underlying debts but disputed liability under the guarantee. In relation to the Coin TV debt, he relied on construction, an implied term, collateral contract, rectification and estoppel. In relation to the Shire debts, the central issue was whether liabilities incurred to third parties and subsequently assigned to ING fell within the guarantee.

1. Coin TV liability. The discussions in May to July 2001 established that the defendant was unwilling to give a personal guarantee for the Coin TV debt and that ING was prepared to continue negotiations on that basis. Objectively, however, they did not amount to a contractual agreement. The subsequent documents and the lapse of time made it unlikely that the discussions were intended to have contractual effect. Applying the principles stated in Inntrepreneur v East Crown [2000] 2 L.R. 611, the collateral-contract argument failed.
2. The 2001 discussions were preliminary negotiations and were not admissible to construe the later guarantee. The guarantee expressly covered liabilities of the named companies, including Homebuy Direct (UK) Ltd. The admissible background did not justify reading out the Coin TV liability. No implied exclusion was necessary, and no common continuing intention to exclude the liability was proved for rectification purposes.
3. The estoppel arguments also failed. There was no clear and unequivocal promise, no relevant reliance on the early discussions, and no sufficient common mistaken assumption arising from the parties’ later conduct. The defendant was therefore liable for the Coin TV debt.
4. Shire liabilities. The wording of the guarantee, read with its surrounding provisions and commercial context, indicated that it covered liabilities arising from the mutual relations of ING and the guaranteed companies. Clause 13.2, permitting termination of liability for agreements made between the company and ING after notice, was particularly significant. Clause 6.1, concerning security taken from the company, also pointed against an intention to capture unrelated third-party debts merely because they were assigned to ING.
5. The authorities concerning “all monies” clauses confirmed that the court must ascertain presumed intention from context and commercial purpose. The composite guarantee’s express reference to assignment was a further, though limited, indication that the omission of similar wording from the personal guarantee was deliberate. On its true construction, the guarantee did not cover the Shire debts.
6. Judgment was entered for ING in respect of the Coin TV liability. The Shire claim failed. The precise amount of the judgment was left for submissions.