Griffin v Awoderu & Anor

A contractual entitlement depends on the agreement actually made, assessed from the contemporaneous documents, surrounding circumstances and the witnesses’ evidence. A lender who advances money on agreed repayment and return terms is entitled to contractual damages when those sums are unpaid. Where two persons are liable for the same damage, contribution is assessed under the Civil Liability Contributions Act 1978 by reference to what is just and equitable, including comparative responsibility and blameworthiness. Equal contribution is the starting point where both parties entered the same agreement, but relevant conduct may justify a different allocation.

The claimant advanced money in connection with two speculative property transactions involving the defendants. He alleged that the advances were short-term loans carrying specified returns. One defendant contended that the claimant was instead an equity investor or sleeping partner. The court had to determine the terms of both agreements, the resulting damages, whether both defendants were parties to the agreements, and the appropriate contribution between them.

1. The court found that the October 2002 agreement was a loan agreement. The claimant advanced £170,000 in return for repayment of capital and a £100,000 return by 30 September 2003, with the arrangement secured in the manner agreed. The defendants’ contrary case was rejected.
2. The May 2003 agreement was likewise a short-term loan. The claimant advanced £120,000 in return for £150,000 by 30 September 2003 and, if unpaid, sums equivalent to the market rent of the property until payment. The claimant’s evidence, the contemporaneous diary entries and commercial circumstances supported that conclusion.
3. Failure to pay the sums due constituted breaches of contract. Damages under the first agreement were £270,000, subject to interest. Under the second agreement, the claimant was entitled to £150,000, the relevant rental value from 1 October 2003, and interest on unpaid sums.
4. Both defendants were parties to both agreements and were liable for the same damage. Under the Civil Liability Contributions Act 1978, the court had a wide discretion to order such contribution as was just and equitable, having regard to comparative responsibility and blameworthiness. Equal contribution was the proper starting point. No sufficient reason existed to reduce the second defendant’s contribution because he had knowingly agreed to charges securing the first defendant’s personal debts or because payment had been delayed.
5. The second defendant was therefore ordered to contribute £178,111 towards liability under the first agreement and to contribute one half of the liability under the second agreement. Execution concerning the Fursecroft liability was proposed to be stayed pending the determination of proceedings under section 423 of the Insolvency Act 1986.
6. The claimant’s later discussion about possibly sharing recovered sums did not waive or alter his contractual rights.