Business Law

It transpired that the development was unprofitable and ASL went into liquidation. ASL was incorporated for the purpose of carrying out the development and had no assets of its own. The funds to carry out the development were provided by:

§ A bank loan to ASL; and

§ A loan from a loan facility granted by the claimant under the terms of a facility letter from the claimant to ASL. This letter was annexed to the JVA.

According to clause 10.3 of the JVA, the defendant guaranteed that ASL would perform its obligations under the agreement. In addition to this, clause 2.12 of the JVA obliged ASL to repay to the claimant all monies that the claimant had advanced in pursuance of its loan facility.

Furthermore, clause 4.3 of the facility letter entitled the claimant to debit to ASL's loan account 'any management charge'. The claimant alleged that a sum of £97,762, which included interest, was due to be paid by the defendant in accordance with the guarantee. Although the claim included only a small part of the outstanding loan, it was substantially made for 'management charges' more at reasons that may increase personal bankruptcy. Those charges were divided into:

§ Charges relating to the facility letter; and

§ Charges provided for in the cash flow appraisal.

The claimant applied for a summary judgement under CPR 24. As the management charges were due pursuant to the facility letter, the issue before the judge was whether the JVA and the facility letter constituted one agreement or two separate agreements.