Dean McGuiness & Anor v Goldentree Financial Services Plc & Anor

On reverse summary judgment, the court should decide a short point of law or construction where the evidence is sufficient, while avoiding a mini-trial. A claim has no realistic prospect of success where the available evidence does not put a legally essential issue genuinely in dispute.

For an investment property loan, the relevant conditions under Article 61A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 are assessed when the agreement is made. A defective borrower declaration does not prevent the court from relying on contemporaneous evidence to determine those conditions. A facility made to a company is not a regulated mortgage contract requiring credit to an individual, and a person who was not party to the facility lacks standing to challenge it on that basis.

The proceedings concerned loans advanced by Goldentree Financial Services plc to Dean McGuinness and Hitcham Homes Ltd for property development. They comprised possession proceedings concerning 17A Mayfield Road, composite proceedings challenging the enforceability of the 2019 loan, the 2021 facility, the personal guarantee and the security, and an insolvency application concerning the Company’s administration and the proposed sale of its Hungerford property.

Goldentree applied for reverse summary judgment and strike-out. Mr McGuinness sought summary judgment, strike-out and disclosure. The court determined whether the loan transactions were regulated mortgage contracts, whether Mr McGuinness could challenge the 2021 facility, whether duplicative claims should remain in the composite proceedings, and whether the insolvency application and disclosure application were sustainable.

1. Summary judgment and investment property loan. Applying Easyair Ltd v Opal Telecom Ltd, the court may determine a short point of law or construction summarily where it has the evidence necessary for proper determination, but must avoid a mini-trial. The 2019 loan was an investment property loan under Article 61A(6) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. The statutory declaration was arguably ineffective under Article 61A(3), consistently with Kumar v LSC Finance Limited and its Court of Appeal decision, but the declaration and other contemporaneous documents showed that the statutory conditions were satisfied. The 2019 Loan Claim therefore had no realistic prospect of success.
2. 2021 facility. A regulated mortgage contract requires credit to be provided to an individual or trustees. The 2021 facility was made to the Company, not Mr McGuinness, and he was not a party to it. He therefore had no realistic prospect of establishing that it was an unenforceable regulated mortgage contract or of challenging it as though he were a contracting party.
3. Remaining composite claims. After summary judgment on the loan claims, the guarantee and security claims duplicated issues in the earlier Possession Proceedings. Keeping them alive in parallel would undermine the overriding objective and was an abuse of process under CPR 3.4(2)(b). The residue was struck out.
4. Possession and guarantee. The registered charge was wide enough on its face to secure liabilities under the later personal guarantee. Appointment of receivers did not prevent Goldentree, as mortgagee, from bringing possession proceedings. The guarantee’s variation clause gave Goldentree at least an arguable answer to the contention that later variations discharged the guarantee.
5. Insolvency and disclosure applications. The insolvency application was procedurally misconceived because it was issued for the Company without the administrators’ authority and used statutory provisions concerning regulated lending to challenge the administrators’ functions. It disclosed no reasonable grounds and was struck out. The disclosure application was dismissed: it did not identify documents or searches with sufficient precision, and no particularly good reason justified disclosure in support of a possible committal application.
6. The 14 March 2024 Application succeeded in part. The 17 July 2024 Application was dismissed, and the 10 October 2024 Application was granted. The Possession Proceedings remained extant for directions and trial.

First-instance judgment. The judgment records an earlier unappealed decision dated 20 October 2023 concerning the validity of the administrators’ appointment and Mr McGuinness’s authority, but that decision was not the judgment under appeal.