The Applicant granted two guarantees to a bank in 2006 and 2007 in respect of two facility letters. The bank assigned the Second Facility and the benefit of the First Guarantee to the Respondent. The amounts due under the Second Facility fell due for payment on 31 March 2008 and were only demanded for payment in 2015.
The Respondent served a statutory demand on the Applicant. The Applicant applied to set aside the statutory demand on a number of grounds, including lack of evidence around assignment, the Second Facility liability not being within the “purview” of the First Guarantee, limitation and that the amounts due only constituted damages under the indemnity provisions of the guarantees, which were not liquidated amounts.
The Registrar agreed, on the evidence, that the Respondent had not properly evidenced that it had taken an assignment of the amounts claimed against the Applicant. Whilst the First Guarantee appeared to be “all monies” including future liabilities, the assignor conceded that the Second Facility was a standalone facility, for which the bank had taken the Second Guarantee. The Registrar also therefore agreed that it was strongly arguable that the liability of the Second Facility was not within the purview of the First Guarantee, the First Facility having not been assigned.
As the Second Facility was a term loan, the Registrar confirmed that the cause of action arose on the repayment date. Whilst the guarantees were deeds, the Second Facility was not and so the relevant limitation period was six years from the repayment date and the primary debt was therefore statute barred.
Lastly, the Registrar found that any indemnity arising under the First Guarantee was for an unliquidated sum in damages on which a bankruptcy petition could not be based. For this and the above reasons, the statutory demand was set aside.