JBR Capital Limited v JM Investments/Trading Ltd & Anor

Repeated acceptance of late contractual payments does not, without a clear and unequivocal representation and reliance, prevent a party from enforcing future payment obligations or terminating for breach. Contractual negotiations to restructure arrears do not ordinarily amount to forbearance.

Under the Statute of Frauds, a guarantee must evidence its material terms in writing, but an omitted identifying detail is not necessarily material. Extrinsic evidence may explain an ambiguity, although it cannot supply missing material terms or rewrite an incomplete guarantee.

Where a contract requires a vehicle’s trade value to be established after 28 days, credit is due when an appropriate valuation is practicably obtained, not automatically on day 28.

The claimant financed the acquisition of high-value vehicles under hire purchase agreements with the first defendant. The second defendant gave personal guarantees. Following substantial arrears, the claimant terminated the agreements, repossessed and sold the vehicles, and claimed the outstanding balances from both defendants.

The defendants argued that the claimant had waived or was estopped from terminating, that termination notices sent by email were invalid, that two guarantees were unenforceable because agreement numbers had been left blank, and that credits for the vehicles and interest had been calculated incorrectly.

The central issues were the effectiveness of termination, enforceability of the guarantees, the proper credit for the Bentley, and the dates on which credits for the vehicles fell to be allowed.

1. Termination. The claimant lawfully terminated the agreements. Earlier acceptance of late payments did not amount to a clear and unequivocal promise to refrain from enforcing future breaches. The restructuring negotiations occurred against express warnings that the arrears were unacceptable and did not establish reliance making it inequitable to enforce the agreements.

2. Termination notices sent by email were effective. Clause 10.13 did not require every communication to be sent by post or delivered to the registered address. In any event, the later notices sent by post were effective from their date.

3. Guarantees. Section 4 of the Statute of Frauds requires the material terms of a guarantee to be evidenced in writing, but not every detail. The agreement subject to the guarantees was identified by its date, parties and terms. The missing agreement numbers were non-material omissions and did not make the guarantees incomplete. Alternatively, the surrounding objective evidence sufficiently identified the agreements without circumventing the statutory purpose.

4. The court qualified the broad formulation in Fairstate concerning extrinsic evidence. Such evidence may explain written terms, but cannot ordinarily supply material terms absent from the instrument or cure a document so deficient that doing so would circumvent the statute. The guarantees were distinguishable from the materially deficient instruments in Holmes, Kaur and Fairstate. The indemnity provisions also imposed separate and wider liability.

5. Credits and interest. Clause 8.2 did not impose an absolute 28-day deadline requiring credit at day 28. Credit was properly given when an appropriate trade value could practicably be established, having regard to market conditions, vehicle condition, specialist valuation requirements and the defendants’ requests to retain the vehicles. The Bentley credit of £51,000 fairly reflected its trade value.

6. The claims were allowed against both defendants in the sums claimed.