Summary

A guarantor was refused permission to appeal from a summary judgment granted four years earlier on a claim on the guarantee because he had no real prospect of success.

Facts

Application by the defendant ('C') for permission to appeal and for an extension of time for appealing from the order of Master Prebble of 22 July 1998 entering judgment for the claimant ('SFH') under RSC O.14. SFH sued on a guarantee allegedly given by C in respect of the obligations of Wellington International Ltd (‘Wellington’) contained in a "client venture agreement" dated 8 April 1997 between Wellington and SFH and another party under which SFH advanced to Wellington the sum of $1.6 million. Wellington failed to make any payment to SFH in breach of the client venture agreement and SFH called on the guarantee citing in their statement of claim a letter from C dated 27 March 1998 that acknowledged C’s liability to repay the guarantee. At the hearing before Master Prebble C contended that his signature on the guarantee had been forged and that he had not given authority whether in his personal capacity or as a director of Wellington to any person to sign in his name. He claimed that his letter was written under the misapprehension that the guarantee related to another business venture. Two issues were raised on this application: (i) whether C could demonstrate a real prospect of successfully defending SFH's claim against him on the guarantee; and (ii) whether even if he did he should be allowed to bring this appeal notwithstanding the passage of almost four years between the entry of the judgment and the filing of his appellant's notice. C relied on three defences: (a) the forgery defence now bolstered by fresh evidence from the alleged forger; (b) SFH was not a party to the client venture agreement and supporting guarantee and that a Swiss company associated with SFH was the true claimant; and (c) the transactions constituted by the client venture agreement and supporting guarantee were illegal transactions in that they involved fraud and/or money laundering.

Held

(1) Whilst on an overall view of the evidence it could not be said that C had no prospect at all of mounting a defence to the claim against him under the guarantee based on the fact that he did not sign the document, it could not be said that this line of defence had a real prospect of success. (2) SFH was clearly stated to be the client with which Wellington was contracting in the client venture agreement. Correspondence between SFH and C bore this out. There was no merit in the proper claimant defence. (3) There was not a shred of hard evidence to indicate either that the $1.6 million came from the proceeds of crime or that the client venture agreement was dishonest or fraudulent. (4) Permission to appeal was therefore refused. (5) Even if there had been any merit the judge would have refused an extension of time within which to bring the appeal. There were no exceptional circumstances in this case that would justify such a delay.

Application dismissed.