Richard Slade and Company Limited & Anor v Guinevere Holdings Limited & Anor

Clear contractual language governs. Commercial common sense may assist only where the wording has more than one possible meaning. A court should not construct a contractual longstop or additional condition which the parties did not express.

Terms are implied only where necessary for commercial or practical coherence, or where they are so obvious as to go without saying. Delay does not frustrate a contract merely because performance occurs later than contemplated, particularly where the obligation is to pay money.

On a summary judgment application, difficult issues may be decided where the legal issue is sufficiently clear and no factual investigation requiring a trial is necessary.

The claim concerned a £2,462,586 payment said to be due under a Commitment Letter entered into by Guinevere Holdings Limited and Richard Leighton Hayward in favour of Grenda Investments Limited. Richard Slade and Company Limited sued as equitable assignee of Grenda’s receivable.

The defendants opposed summary judgment and sought permission to amend their Defence. They argued that liability was conditional on release of specified properties before 30 June 2017, that terms should be implied requiring release within a reasonable time, and that the arrangement was frustrated. They also raised issues concerning authority, solicitors’ costs, public policy, suretyship, services, interest and quantum.

The central questions were whether the defendants had a real prospect of defending the claim and whether any compelling reason required trial.

1. Disposition. Permission to amend the Defence was refused. The Defence was struck out under Civil Procedure Rules 1998, rule 3.4, and judgment was entered for the claimants for £2,462,586, with interest to judgment at 1% above base rate.
2. Construction. The Commitment Letter made liability conditional on Completion, defined as release of the Release Properties from the Security Documents. It did not impose an additional condition that Completion occur by the Repayment Date. The wording contained no sufficient basis for that construction, and the Repayment Date was not a contractual longstop.
3. Implied terms. The defendants had no real prospect of showing that terms requiring Completion within a reasonable time were necessary for business efficacy or so obvious as to go without saying. The agreements provided coherently for the possibility that the properties would not be released.
4. Frustration. The payment obligation had not become impossible to perform. Later release of the properties was not a supervening event fundamentally changing the contractual obligation, and delay or increased onerousness was insufficient.
5. Other defences. The evidence established authorisation of the proceedings by Grenda. The Solicitors Act issue did not provide a defence because the claim was for a debt under the Commitment Letter, not an action on the retainers, and the defendants were not the solicitor’s clients. The alleged failure to obtain a debenture did not discharge the surety because the security remained specifically enforceable and no wilful loss or diminution was shown.
6. Public policy and amendments. The proposed public-policy defence concerned an equitable assignment, not an agreement governing the future conduct of proceedings. It disclosed no real prospect of success. The remaining challenges to services, interest and quantum likewise disclosed no real prospect of a successful defence.