Wiggin Osborne Fullerlove (a firm) v Bond

Where an oral loan is negotiated by an individual who does not identify a specific corporate borrower, the court determines the contracting party objectively from what was said and done. A later email may be evidence of the agreement without itself being the contractual document. An individual who sought the loan may be liable as principal where no company was identified. Alternatively, personal liability may arise where the individual acted for a disclosed but unidentified principal and the circumstances show that he did not negative personal liability. The court will not pierce the corporate veil merely because the individual controls the companies or uses them for personal business. A contractual promise to repay does not ordinarily imply a representation that the promisor believes repayment will occur.

Wiggin Osborne Fullerlove, a firm of solicitors, advanced £626,000 from its client account following discussions between its partner, Mark Payne, and David Bond. The advance was intended as a short-term loan for the urgent acquisition or release of tank containers. The money was paid to an account held by Milio International Limited, with Bond International Group Limited stated as a reference.

The claimant sought repayment from Mr Bond personally. It argued that he was the borrower, alternatively that he was personally liable as agent, and further alternatively that the corporate veil should be pierced. Mr Bond contended that the borrower was one of the Bond companies and disputed the agreed repayment terms and the claimant’s entitlement to sue. The central issues were the identity of the borrower, the terms of the Loan, and Mr Bond’s personal liability.

1. Claim allowed. There was judgment for WOF for repayment of the Loan.
2. The Loan was for a fixed term of 30 days at 10% APR. The email of 21 January 2015 was unequivocal on those matters and contained no condition postponing repayment until GLL obtained finance. The later agreement to reduce interest to 5% did not alter the original term. The Loan was subsequently extended in practice, but WOF did not contractually bind itself to any further extension.
3. The agreement was made orally. The email was immediate confirmation of the agreement and evidence of its terms, but was not itself the contractual document. The relevant question was objective. No specific company was identified during the discussions. The court rejected Mr Bond’s evidence that Hawk or BIGL had been identified as borrower. Mr Bond therefore borrowed the money as principal and was personally liable.
4. Alternatively, if Mr Bond had acted for a disclosed but unidentified corporate principal, he was jointly liable. The relevant circumstances included that he sought the Loan, controlled the Bond companies, the likely principal was a foreign company, the contract was one of credit, the funds were advanced for a client, no enquiry or due diligence identified the company, and no security was taken. The court relied on The Santa Carina [1977] 1 Lloyd’s Rep 478, Kai Yung v Hong Kong Banking Corporation [1981] AC 787 (PC) and Teheran-Europe Co Ltd v S. T. Belton (Tractors) Ltd [1968] 2 QB 545.
5. The alternative case based on piercing the corporate veil was rejected. The facts fell far short of the circumstances identified in Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415.
6. The alleged implied representation that Mr Bond believed the Loan would be repaid within 30 days would also have failed. A contracting party ordinarily relies on the contractual undertaking and its own judgment, not on an implied representation about the promisor’s prospects of performance.