Mark Shaw v The Estate of Martin Wood

Whether a person contracts personally or as an agent for a company is determined objectively from the parties’ words and conduct. A payment into a company account does not by itself establish that the company was the borrower. Where a signed agreement names an individual as the contracting party and does not state that he signs for a company, the document strongly supports personal liability. The court may consider extrinsic evidence to identify the contracting party, but private intentions are irrelevant. A later signed agreement which expressly supersedes earlier agreements may consolidate and replace the earlier contractual arrangements. Interest under section 35A of the Senior Courts Act 1981 runs from the first written demand where that is the appropriate date.

The claimant sought repayment from the estate of Martin Wood of loans made between 2011 and 2019. The principal issue was whether the loans were made to Mr Wood personally or to M.W. Helicopters Limited, notwithstanding that most payments were made into the company’s bank account and some agreements referred to company purposes.

The defendant also disputed the effect of a written agreement signed on 15 or 16 April 2019 which stated that it superseded previous agreements. Issues concerning the Consumer Credit Act 1974, the Financial Services and Markets Act 2000 and related regulations had been abandoned.

1. Contracting capacity. The question whether Mr Wood contracted personally or as agent for MWH was objective. The presumption concerning face-to-face dealings in mistaken-identity cases did not resolve a question of capacity. The court had to determine the parties’ intention from their words and conduct.
2. Written agreements. The signed documents were formal agreements, not merely informal records. They named Mr Wood as Party (1), named the claimant as Party (2), and did not state that Mr Wood signed as director or on behalf of MWH. The wording was clear and unambiguous. Payment into MWH’s account and the provision of company-owned helicopters as security were not determinative and were consistent with personal borrowing followed by the injection of funds into the company.
3. The principles stated in Hamid v Francis Bradshaw Partnership [2013] EWCA Civ 470 supported an objective approach. A person signing a document is ordinarily the contracting party unless the document identifies an agent or principal, or extrinsic evidence establishes that both parties knew he was signing as agent. The approach in Internaut Shipping GmbH v Fercometal Sarl [2003] EWCA Civ 812 also supported the significance of an unqualified signature. Shogun Finance Ltd v Hudson [2004] 1 AC 919 was distinguished because the presumption discussed there arose in a mistaken-identity context.
4. The April 2019 agreement expressly superseded the earlier agreements and was a consolidation of the loans. The defendant’s proposed consideration objection had not been pleaded, but there was in any event consideration because the agreed security for continuing the loan was altered.
5. The loans were personal loans to Mr Wood. After correcting the admitted overstatement and allowing for the £30,000 repayment, the estate was liable for £1.13 million. Interest was awarded under section 35A of the Senior Courts Act 1981 at 4% per annum from 1 October 2019, the date of the first written demand. Judgment was entered for the claimant, with a further hearing for the final order and costs.

First-instance decision. The court gave judgment for the claimant in the sum of £1.13 million plus interest, with final order and costs to be dealt with at a further hearing.