Pursued for funds I didn't personally guarantee

Discussion in 'Legal' started by DavidG92, Feb 11, 2019.

  1. parkingandsecurity

    parkingandsecurity UKBF Regular Full Member

    187 25
    Surely this is your golden goose? They agreed to make only 2nd defendant liable. Surely this would come under some iteration of acceptance by conduct?

    They further confirmed their position in a follow up email and presumably never sent you the paperwork they said they would. This would come down to frustration of contract. You wanted to comply but for reasons beyond your control were unable to do so?
     
    Posted: Feb 12, 2019 By: parkingandsecurity Member since: Sep 7, 2018
    #21
  2. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,298 3,187
    I can't see anything there that would remove liabiloty from someone if they were jointly and seevrally liable. The OP is being informed that the 2nd Defendant has accepted liability, meaning that he accepted that he should pay. That does not mean that the Claimant has accepted that ONLY the 2nd Defendant is liable. as the 2nd defendant didn't pay, the Claimant can pursue each and any party who is liable.
     
    Posted: Feb 12, 2019 By: Newchodge Member since: Nov 8, 2012
    #22
  3. parkingandsecurity

    parkingandsecurity UKBF Regular Full Member

    187 25
    I would argue that the doctrine of Contra Preferentum would apply as to me it reads that they agree - following his request to be removed from the contract - that the 2nd defendant accepts and they are happy with that.

    It would therefore to me as the layman suggest that the proposer in response to the request for removal has agreed to removal by confirming the other party is liable. Indeed contra-preferentum would go against the company as they were the persons drafting the response.
     
    Posted: Feb 12, 2019 By: parkingandsecurity Member since: Sep 7, 2018
    #23
  4. Mr D

    Mr D UKBF Legend Free Member

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    So it appears worth the OP sitting down with a specialist solicitor and going over all the paperwork emails etc.
     
    Posted: Feb 12, 2019 By: Mr D Member since: Feb 12, 2017
    #24
  5. Newchodge

    Newchodge UKBF Big Shot Free Member

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    You are making a huge number of assumptions there. Without seeing the entire email correspondence you cannot make any valid assessment.
     
    Posted: Feb 12, 2019 By: Newchodge Member since: Nov 8, 2012
    #25
  6. parkingandsecurity

    parkingandsecurity UKBF Regular Full Member

    187 25
    @Newchodge We can only ever make assessments based on the information provided to us in this public domain. That is all my surmising is based upon.

    @Mr D Indeed, especially for the value of £40k which will also no doubt be subject to costs and court fees by this stage.
     
    Posted: Feb 12, 2019 By: parkingandsecurity Member since: Sep 7, 2018
    #26
  7. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

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    I agree with the others that have stated that you need to take legal advice as none of us here are experts in promissory note law.

    I would however make the point (as a layman) that you didn't actually receive the sum of £40,000 as stated as it was received by a third party being the limited company
     
    Posted: Feb 12, 2019 By: Ian J Member since: Nov 6, 2004
    #27
  8. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    2,999 357
    If promissory note was signed on behalf of Company in capacity as a Director I don't see how you can personally owe the debt.
     
    Posted: Feb 12, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #28
  9. The Byre

    The Byre UKBF Ace Free Member

    8,764 3,427
    That is one very big IF. It sure don't sound like it!

    Contra Preferentum? Hmmm . . . as stated above, lawyer time and with all the doc, emails and anything and everything else you can think of!

    But at the root of all this is that damn promissory note. The OP is the co-issuer of that promissory note and it is important that you understand what exactly a PN really is -

    Promissory notes are how paper money began. "I promise to pay the bearer the sum of . . ." remember? When you signed that PN, you created a £40,000 bank note. This makes PNs very dangerous and why their issuance in many countries is strictly controlled and must be registered with either a bank or a notary public. Sadly that is not the case in English law.

    For a poor man to issue a £40,000 bank note is lunacy. But PNs are dangerous for BOTH parties. I once accepted such a beast and it was registered with the bank (Germany). The issuer blew-up on the course and the bank came to me for the money.

    To cut a very long and involved story short, we were able to sequestrate the funds and the issuer and his family lost everything including their home. That's when I learnt that PNs are for two types of people - the very rich and complete fools.

    EDIT - my advice to the brewery would be "You can't pick the pocket of a naked man!" But then legal departments in large companies just want to keep going to the logical end, regardless.
     
    Posted: Feb 12, 2019 By: The Byre Member since: Aug 13, 2013
    #29
  10. deniser

    deniser UKBF Legend Free Member

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    Some questions:
    1. did you sign the promissory note in your own name eg. John Smith or in some other way such as John Smith Director or John Smith on behalf of X Ltd?
    2. was your signature witnessed?
    3. were you advised at any time to seek independent legal advice on either the promissory note or the PG?
    4. why did you agree to become a director of the company?
    5. why did you agree to sign the promissory note?
    6. what terms does the promissory note contain as to repayments and interest?

    There are some basic legal principles which may help you here - hence the questions above:

    1. For a contract to be legally binding, there needs to be "consideration" meaning that you need to get something in exchange.

    2. Even if the promissory note were regarded as a guarantee, there are several loopholes to their enforcement on the basis of inequality, you not understanding the liability etc.

    3. A promissory note needs to be very clear and precise as to its terms to be enforceable

    You need to file your defence on legal grounds so you will need some help with this.
     
    Last edited: Feb 12, 2019
    Posted: Feb 12, 2019 By: deniser Member since: Jun 3, 2008
    #30
  11. Blaby Loyal

    Blaby Loyal UKBF Ace Full Member

    1,016 193
    I think we would need to see the Particulars of Claim to see precisely how the claim (or claims) against each Defendant has been derived.

    Mistakes can be made in these matters but breweries have been in the game for a long time and it would be unusual for them not to have everything sewn up.

    It's likely to be very much a case of deckchairs on the Titanic if the OP is a man of straw. These solicitors who press on regardless irritate me enormously.
     
    Posted: Feb 12, 2019 By: Blaby Loyal Member since: Jun 12, 2018
    #31
  12. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

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    The consideration would probably have been the advancing of funds to a company that he was a director of
     
    Posted: Feb 12, 2019 By: Ian J Member since: Nov 6, 2004
    #32
  13. deniser

    deniser UKBF Legend Free Member

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    But he didn't personally benefit from this.
     
    Posted: Feb 12, 2019 By: deniser Member since: Jun 3, 2008
    #33
  14. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,274 1,511
    That doesn't matter as it's exactly the same as when a company director is asked to personally guarantee his company's bank facilities
     
    Posted: Feb 12, 2019 By: Ian J Member since: Nov 6, 2004
    #34
  15. DavidG92

    DavidG92 UKBF Newcomer Free Member

    12 0
    Hi,
    Thanks for taking the time to respond.

    1. Yes, I signed with my own name without reference to the company
    2. The signature was not witnessed by an impartial individual, the only two signatures on the document are that of the Second and Third Defendants.
    3. No I was not
    4. I set up the company initially in a bid to use it for some of my own consultancy work. In the end, I decided not to consult impartially. Then, when the bar started, the Second Defendant needed a company and used this one. I always intended to resign and replace myself with him. Then, once the discussions around funding began I agreed to remain as Director to facilitate the business establishment. The Second Defendant did not have the required credit to acquire the funds in question.
    5. I was told that the Director was required to sign the Promissory Note and, while they could overlook the absence of my signature on the Personal Guarantee, I could not avoid signing the Promissory. If I had known at the time that it assigned the same responsibility, then I would not have signed.
    6. There are no terms or definitions attached to the Promissory Note whatsoever. It simply says
    "On demand, we (the Third Defendant) and (the Second Defendant), jointly and severally promise to pay (the Claimant) the sum of £40,000 for value received."
     
    Posted: Feb 12, 2019 By: DavidG92 Member since: Feb 11, 2019
    #35
  16. DavidG92

    DavidG92 UKBF Newcomer Free Member

    12 0
    But I was asked to Personally Guarantee and declined to do so. Surely that shows my intention and gives some colour in establishing what I thought I was agreeing to
     
    Posted: Feb 12, 2019 By: DavidG92 Member since: Feb 11, 2019
    #36
  17. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,298 3,187
    But why, did you think, that they insisted on you signing the Promissory Note? If you thought it did not bind you to anything, did you not think it strange that they demanded it?
     
    Posted: Feb 12, 2019 By: Newchodge Member since: Nov 8, 2012
    #37
  18. DavidG92

    DavidG92 UKBF Newcomer Free Member

    12 0
    Not at all, I thought it made perfect sense that a Director should make a promise to pay on the company's behalf
     
    Posted: Feb 12, 2019 By: DavidG92 Member since: Feb 11, 2019
    #38
  19. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    2,999 357
    Bingo - you effectively did sign a PG...
     
    Posted: Feb 12, 2019 By: Lisa Thomas Member since: Apr 20, 2015
    #39
  20. The Byre

    The Byre UKBF Ace Free Member

    8,764 3,427
    Google?
     
    Posted: Feb 12, 2019 By: The Byre Member since: Aug 13, 2013
    #40