Bank Leumi (UK) Plc v Akrill

This is an appeal against the decision of HHJ Jarman QC dated 29 October 2013 and his consequential order granting the respondent (“the Bank”) summary judgment against the appellant (“Mr Akrill”) on two personal guarantee claims in the total sum of £3,840,493.83 including interest together with costs to be assessed if not agreed. The judge refused Mr Akrill permission to appeal.

On 19 November 2013 Mr Akrill applied to this court for permission to appeal and for a stay of execution. The application was supported by Mr Akrill’s fourth witness statement dated 21 November 2013. By order 30 December 2013 Lewison LJ granted permission to appeal on the basis that it was arguable that the judge had fallen into error in conducting what was, in effect, a mini trial. He also granted a stay of execution.

Mr Akrill’s evidence was not served on the Bank until 8 January 2014. Having reviewed that evidence, the Bank formed the view that it was misleading, opaque and incomplete and so issued an application for an order that the appeal be struck out or conditions imposed on its continuation, or that the stay of execution be set aside. Unfortunately but through no fault on the part of the Bank, it proved impossible for that application to be heard before the substantive appeal. In these circumstances the Bank accepts that its application cannot achieve its objectives and does not invite this court to grant it any of the relief that it sought. Nonetheless it submits that this court may properly take into account Mr Akrill’s misrepresentations to Lewison LJ in deciding what order to make on this appeal.

Mr Akrill is a property developer and carries on business through a group of companies known as the Manor Group. At all times material to these proceedings, he was the sole beneficial owner of each of the companies within the group.

Mr Akrill first made contact with the Bank in the summer of 2009 in connection with a development site in Salford (the “Salford site”). Mr Akrill had heard that this site was being developed with the benefit of loans from the Bank but that the borrower was in financial difficulty. Believing this presented him with a business opportunity, Mr Akrill travelled to the Bank’s London offices where he met Mr Alastair Houghton and Mr David Griffiths who were, respectively, the Bank’s deputy head and head of property finance. Mr Akrill maintains that at this meeting these individuals made to him a significant representation about the Bank’s policy in relation to the enforcement of personal guarantees. He puts it this way in paragraph 38 of his first witness statement dated 27 June 2013:

In the course of the ensuing discussions Mr Akrill raised the possibility of the Bank providing a loan to the Manor Group to fund the purchase and development of another property in Hull then known as Clarence Flour Mill (“Manor Mill”). Mr Akrill was told that a personal guarantee would be necessary and he maintains that he said that he would be prepared to offer such a guarantee but limited to £250,000. At about this time Mr Akrill was put in touch with a Mr Stephen Cooper, a regional manager with responsibility for the north east of the country and thereafter he became Mr Akrill’s principal contact. Mr Akrill knew that Mr Cooper was not a member of the Bank’s credit committee and that any lending proposal would require the approval of that committee.

In November 2009 Mr Cooper prepared a written request to the credit committee for authorisation to lend £3,370,000 to Manor Asset Limited (“Manor Asset”), a new single purpose vehicle formed for the purpose of acquiring and developing Manor Mill. Important aspects of this proposal were that the Bank would take a charge over the assets of Manor Asset and that Mr Akrill would provide a personal guarantee in respect of the whole facility. Mr Akrill claims that Mr Cooper told him that he was in “no danger” because the loan would be no more than 60% of the value of the property and that the Bank would seek to recover any monies owing in the first instance from the borrower and by enforcing its security over the assets of Manor Asset, and would only look to enforce the personal guarantee in the event of a shortfall. Mr Akrill explains the position in these terms in paragraph 54 of his first witness statement:

Mr Akrill continues that this assurance was important to him, and that without it he would not have been prepared to offer a guarantee for the full amount of the loan. He also says that, with hindsight, he should have ensured that the documents were drafted to reflect the assurance and further, that he should have been sceptical about Mr Cooper’s motives because he knew that Mr Cooper was “incentivised” by the Bank and received a bonus reflecting “the transactions he concluded”. For his part, Mr Cooper denies having any such conversation with Mr Akrill and denies that he made the representation which Mr Akrill attributes to him.

In early December 2009 the credit committee approved the proposal and the Bank issued a facility letter to Manor Asset permitting it to draw down by way of a loan the sum of £3,370,000. The facility letter provided that the Bank would take a legal charge over the assets of Manor Asset and required Mr Akrill to provide a personal guarantee limited to £3,370,000 on the Bank’s standard terms. Shortly afterwards and before any monies had been drawn down, the Bank reviewed this facility in the light of various matters which had come to its attention and in January 2010 a revised proposal was put to the credit committee. Following approval, a new facility letter was issued to Manor Asset on 29 January 2010 permitting it to draw down a slightly reduced maximum sum of £3,162,500 in three tranches, the first to assist Manor Asset to purchase Manor Mill; the second to assist it with development costs; and the third to assist it to service its interest obligations under the facility. As before, the facility letter provided that the Bank would take a legal charge over the assets of Manor Asset and required Mr Akrill to provide a personal guarantee on the Bank’s standard terms.

The Bank duly took that legal charge and on 29 January 2010 Mr Akrill signed the personal guarantee. He says that he did so because Mr Cooper had given him the assurance to which I have referred. In the event the Bank advanced funding to Manor Asset under a series of facility letters, the last of which was dated 15 July 2011 and provided that the total sum, then amounting to £3,662,500, was repayable on demand but in any event by 30 November 2011.

Mr Akrill maintains that during the course of 2010 and 2011 he met Mr Cooper on various occasions and at a meeting in late 2010 they considered the possibility of the Manor Group of companies transferring all of their banking arrangements to the Bank. These companies had overdrafts amounting to a total of around £325,000 and so Mr Akrill and Mr Cooper discussed the possibility of Manor Property Limited (“Manor Property”), the company serving as the administrative hub of the group, being provided with an overdraft facility in the sum of £400,000 to replace the existing arrangements. Once again, it was envisaged that the Bank would be provided with a personal guarantee from Mr Akrill to cover the facility together with a debenture and a charge over the residual credit balances across the Manor Group.

On 18 January 2011 the Bank issued a facility letter to Manor Property on terms that the overdraft would be repayable on demand and that the security for it would include a personal guarantee from Mr Akrill on the Bank’s standard terms and limited to £400,000.

Mr Akrill signed this further guarantee on 28 January 2011 and, once again, he says that he did so in reliance upon another assurance given to him by Mr Cooper. He claims that Mr Cooper telephoned him while he was travelling home with his wife, Susan, in his motor car and persuaded him to provide the guarantee because the Bank would not call it in. He says that he took the call on a hands free telephone and so his wife was able to hear it and continues, at paragraph 74 of his first witness statement:

On 27 June 2013 Mrs Akrill made a witness statement confirming that she was present in the car with Mr Akrill, that she could hear the conversation and that her recollection of the conversation was the same as that of Mr Akrill.

The two guarantees are in the same form, save for the amounts guaranteed. Each provides that Mr Akrill guarantees payment on demand of all liabilities of the debtor to the Bank limited to the total principal amount together with interest from the date of demand and any legal costs incurred by the Bank in connection with the liabilities of the debtor. It is expressed to be a continuing security which applies to whatever sum from to time constitutes the balance owing by the debtor to the Bank.

Clause 9 provides that Mr Akrill’s liability under the guarantee is unaffected by the Bank varying, modifying, releasing or abstaining from perfecting any credit or banking facilities afforded to the debtor or any security or guarantee held or proposed to be held in support of the liabilities of the debtor.

Clause 16 makes clear the guarantee is provided in addition to any other guarantee or security held in respect of the liabilities of the debtor.

Clause 18 is of particular importance and provides:

Finally, the signature page of the guarantee contains warnings to Mr Akrill in the following terms:

Each of the guarantees was purportedly executed by Mr Akrill as a deed in the presence of his solicitor, Mr Waterhouse of Lupton Fawcett. In signing each of them, Mr Waterhouse confirmed, in the Bank’s standard template wording, that it had been executed by Mr Akrill in his presence and after he had explained its contents to Mr Akrill. Notwithstanding this wording, Mr Akrill maintains in his second witness statement dated 23 August 2013 that in each case he signed the personal guarantee at his home and then sent it to Mr Waterhouse at Lupton Fawcett. He also maintains that Mr Waterhouse did not advise him on the contents of either document. There is no evidence before the court from Mr Waterhouse confirming or denying this account.

The Manor Asset facility was not repaid on 30 November 2011 and remains outstanding. Over the course of the next twelve months, the parties discussed various possible ways to revamp and restructure the borrowing of both Manor Asset and Manor Property. Over this period, the Bank demanded and was paid interest. In August 2012 a surveyor was instructed to value Manor Mill and, in December 2012, reported that it was worth only £1.2 million. The Bank therefore decided that its relationship with the Manor Group must be brought to an end.

By letters 21 January 2013, the Bank made demands on Manor Asset and Manor Property for immediate payment of all sums outstanding on their accounts together with accrued interest. Payment was not forthcoming and by two letters to Mr Akrill dated 29 January 2013, the Bank demanded immediate payment of all sums due under each of the guarantees. Once again, payment was not forthcoming.

On 2 April 2013 the Bank issued this claim against Mr Akrill and on 10 May 2013 it issued the application for summary judgment supported by a witness statement of Mr Mark Gill, a solicitor and partner in Addleshaw Goddard LLP, the firm of solicitors acting for it in these proceedings.

Mr Akrill has deployed a number of defences to the claim and application. First, he relies upon the representations which he claims Mr Cooper made to him as creating collateral warranties which prevented the Bank from calling upon the guarantees before seeking redress from Manor Asset and Manor Property and realising its security over their assets. Mr Akrill maintains that since the Bank has done neither, it cannot pursue him under the guarantees.

The Bank has responded to this defence by arguing that it is bound to fail in the light of the terms of the guarantees including, in particular, clause 18, and the principles to be applied in considering such terms as established by a line of recent cases including the decisions of this court in Peekay Intermark Ltd v Australia and New Zealand Banking Group [2006] EWCA Civ 386, [2006] 2 Lloyds’ Rep 511 and J P Morgan Chase Bank v Springwell Navigation Corporation [2010] EWCA Civ 1221, [2010] 2 CLC 705.

Shortly before the hearing of the summary judgment application and in the light of the approach taken by the Bank both in its evidence and written argument, Mr Akrill drew the conclusion that the Bank had been disingenuous in its dealings with him and so amended and developed his defence based upon Mr Cooper’s representations to assert that they not only gave rise to collateral warranties but also constituted fraudulent misrepresentations of the Bank’s approach to the enforcement of personal guarantees.

In light of this development, the Bank did not pursue its application for summary judgment on the basis of clause 18 and the decisions to which I have referred. However, it maintained that it was nevertheless entitled to judgment because Mr Akrill’s factual case fell short of the minimum level of credibility required to defeat its application, and did so by a considerable margin. It contended that precisely how Mr Akrill characterised the alleged misrepresentations did not matter because it was implausible that they had been made as he alleged, or indeed at all.

The judge accepted this submission for the following reasons. He considered that the way in which Mr Akrill’s case had developed showed that it was, in effect, a recent fabrication. He also thought it telling that Mr Akrill was not able to identify any contemporaneous documents which recorded or provided any support for it. His only evidence was contained in his own witness statements and that of his wife. Finally, he considered the contemporaneous documents, taken as a whole, were in fact inconsistent with it.

Mr Akrill has also deployed two defences based upon the relationship which he claims had developed between the Bank and Manor Asset and which, he says, was such that the Bank could not require repayment of the loans made to Manor Asset other than on reasonable notice. First, he contends that the final facility letter provided that the loan to Manor Asset was repayable on demand but in any event by 30 November 2011. That date came and went but the Bank did not call the loan in until January 2013, over one year later. In these circumstances, the loan that was in place must have been the subject of a new and implied agreement, and under the terms of that new agreement the loan was only repayable on reasonable notice.

The judge rejected this argument in short order. He considered that there had clearly been an attempt to negotiate further facilities but, in the event, this was not successful and there was no real prospect of a court implying a new agreement or a term in such an agreement that the Bank would have to wait a reasonable time before demanding repayment.

Mr Akrill’s other way of putting this aspect of his case is to say that the Bank was estopped by convention from requiring repayment on demand and was for this reason obliged to give reasonable notice. The judge thought this argument had no merit either. He considered that the Bank had neither shared nor acquiesced in any assumption by Mr Akrill that repayment could only be demanded upon reasonable notice. Moreover, no communications had passed across the line between the parties about any such assumption.

For all of these reasons the judge concluded that the Bank was indeed entitled to summary judgment and made an order accordingly.

The approach to be adopted by a court in considering an application for summary judgment in a case of this kind is well established. As this court explained in ED & F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472, the court should not conduct a mini trial to resolve significant factual disputes between the parties. But that does not mean to say that the court has to accept without analysis everything said by a party in his evidence. For example, it may be clear that there is no real substance in the factual assertions which have been made and that may be particularly so if those assertions are contradicted by contemporary documents. If so, issues which are dependent upon those factual assertions may be susceptible of disposal at the summary stage and so save the cost and delay of trying an issue the outcome of which is inevitable. Similarly, it may be appropriate to take into account the stage at which a defence has been advanced and whether a defendant has previously admitted or acknowledged his liability.

Mr Pipe, who has appeared on behalf of Mr Akrill, submits that the judge fell into error because he did indeed conduct a mini trial to resolve what is, in substance, a factual dispute and because the judge’s reasons for rejecting Mr Akrill’s evidence at the summary stage do not survive analysis. Mr Casey on behalf of the Bank has supported the judge’s conclusions and submits that his reasons for arriving at them are unimpeachable. I turn therefore to consider each of the issues addressed by the judge and begin, as did the judge, with the representations allegedly made to Mr Akrill by Mr Cooper.

As I have mentioned, the judge was particularly taken by the fact that the allegation of deceit was made only shortly before the summary judgment hearing. He put it this way at [40]:

I should say straight away that this reasoning seems to me to elide two different questions, namely whether the representations were made and whether, if they were made, they were made fraudulently. Mr Akrill had of course set out details of the representations in his first witness statement. But he maintains that at that stage he had no basis for doubting that they fairly reflected the Bank’s attitude to personal guarantees. It was only when he reflected on the way the Bank had developed its case in its evidence and skeleton argument that he came to the conclusion that the Bank had been disingenuous in its dealings with him. He therefore set his position out in his third witness statement dated 17 October 2013 which was served on the Bank about one week before the hearing. This invited the Bank to explain whether it had the policy which Mr Akrill says it espoused to him. No response was, however, forthcoming.

In these circumstances it is perhaps not surprising that the Bank did not argue (and has not sought to argue before this court) that Mr Akrill has never had a real prospect of establishing that if the representations were made then they were made fraudulently. Its case on this application has been that Mr Akrill has no real prospect of establishing that the representations were made at all. That is the issue to which the judge should have directed his mind and that is the issue to which I now turn.

Mr Casey submits that there are four matters which show that Mr Akrill has no real prospect of making good this aspect of his case. First, he argues that it is a conspicuous feature of the history that these representations only evolved into anything like their current form when Mr Akrill made his first witness statement. In my judgment that is a fair observation but I do not believe that it takes the Bank very far. In order to explain why I must set out a little more of the history.

On 8 February 2013 Addleshaw Goddard sent to Mr Akrill a letter of claim requiring payment under both the Manor Asset and Manor Property guarantees. This letter crossed with a letter of the same date from Clarion, the firm of solicitors then acting on behalf of Manor Asset, Manor Property and Mr Akrill, to the Bank. Clarion’s letter explained in some detail that, over the course of 2012, various meetings had taken place between Mr Akrill and representatives of the Bank with a view to securing an increase in the facility provided to the Manor Group by the Bank. Mr Akrill and one of his colleagues, Mr Lane, understood that, provided satisfactory valuations of Manor Mill and various other assets of the Manor Group were obtained then the Bank would indeed be prepared to make available a substantially increased facility. As it was, however, the Bank had failed to carry out appropriate valuations with reasonable expedition or, indeed, at all. The letter also complained that at a meeting in December 2012 the Bank had informed Mr Akrill that, notwithstanding the foregoing, it was proposing to terminate the Manor Group’s facilities, but even then had represented those facilities would continue until 28 March 2013. The Bank had now reneged on that promise too by issuing demands in January 2013. Clarion therefore sought the Bank’s proposals to compensate the Manor Group for the losses suffered as a result of the Bank’s failure to honour its promise to increase the Manor Group’s facilities, subject to appropriate valuations, and for confirmation that the facilities would continue until 28 March 2013 in any event.

On 20 February 2013 Addleshaw Goddard replied to Clarion’s letter, refuting both of these assertions. They maintained that the alleged representations about the provision of increased banking facilities were neither clear nor actionable and further, that the Bank had made no binding promise that the facilities would continue until the end of March.

On 8 March 2013 Clarion wrote to Addleshaw Goddard requesting copies of all relevant documents including loan agreements, charges and guarantees in relation to the facilities the Bank had provided. Those documents were duly provided by Addleshaw Goddard under cover of a letter dated 18 March 2013.

Clarion wrote to Addleshaw Goddard again on 28 March 2013, asserting that the Bank had failed to honour its obligation to carry out a proper valuation of the Manor Group property assets and claimant that, in any event, the Bank ought to have provided to the Manor Group a reasonable period of time in which to arrange alternative funding.

It seems that at this point the Bank’s patience ran out, for under cover of a letter dated 3 April 2013, Addleshaw Goddard served the claim form and particulars of claim. Shortly afterwards, Addleshaw Goddard indicated that the Bank intended to apply for summary judgment. This prompted Mr Akrill to focus upon his own defence to these proceedings and, by letter 16 May 2013, Clarion provided the first hint of Mr Akrill’s intention to rely upon the representations which lie at the heart of his defence to the claim. They stated, in paragraph 2 of the letter:

Then, in a further letter dated 28 May 2013, Clarion elaborated the nature of the representations as follows:

I recognise and accept, therefore, that it was not until mid May 2013 that Mr Akrill even began to articulate this aspect of his case, and it was not until he made his first witness statement that he condescended to any real detail. However, the correspondence to which I have referred seems to me to provide some support for Mr Akrill’s contention that his attention was initially focused on retaining the Manor Group’s facilities for as long as possible. It is his case that the end of 2012 had witnessed a sharp and unjustified change in the Bank’s attitude towards him and that until the issue of proceedings he and his solicitors were directing their attention to what they had understood to be the commitment of the Bank to an ongoing relationship with the Manor Group, or at worst, the withdrawal of facilities only on reasonable notice. In these circumstances I do not consider it axiomatic that Mr Akrill’s case is fatally undermined by the fact that it was only developed in May 2013.

That brings me to the second matter upon which Mr Casey relies, namely the absence of any contemporaneous document which supports Mr Akrill’s case. I can deal with this point shortly. I accept that there is no such document. However, this does not seem to me to be altogether surprising bearing in mind the nature of the oral representations upon which it depends.

The Bank’s case does not, however, stop there for Mr Casey submits, and the judge accepted, that at least some of the contemporaneous documents which have a bearing on the nature of the deal between Mr Akrill and the Bank are in conflict with Mr Akrill’s account. In this regard, Mr Casey refers to the guarantees and facility letters themselves and submits these are emphatic that the Bank’s right to enforce the security was not circumscribed by any promise to enforce the guarantees as a last resort. In this regard, Mr Casey points with particular force to clauses 9 and 18 of the guarantees and the express warning on the signature pages. I recognise that these are indeed powerful points. However, it seems to me that we must also have regard to the fact that Mr Akrill has said in evidence that, contrary to the confirmation contained on the last page of each of the guarantees, they were not executed in the presence of Mr Waterhouse and further, that Mr Waterhouse never explained their contents to him. There is, at this stage, no evidence before the court from Mr Waterhouse himself. It seems to me, therefore, that, improbable though this aspect of Mr Akrill’s case may be, we cannot say that it is fanciful.

Mr Casey has also drawn our attention to the fact that, prior to executing the Manor Asset guarantee, Mr Akrill gave the Bank legally certified confirmation of his financial standing and the absence of any other surety obligations assumed by him. Mr Casey submits that these documents served no purpose other than to satisfy the Bank that Mr Akrill would have sufficient assets to discharge his liabilities under the guarantees. I think this is an entirely fair point. However, it does not seem to me that it wholly undermines Mr Akrill’s case that payment under the guarantees would only be demanded from him as a last resort. Much the same point can, I think, be made about the next matter upon which Mr Casey relies, namely that, on 19 July 2011, Mr Akrill countersigned a reminder letter from the Bank that the Manor Asset guarantee “covers all the liabilities (actual & contingent) of the Borrower.” Mr Akrill did indeed countersign this letter without protest or qualification but, he says, on precisely the same basis upon which he had given the guarantee in the first place. So also, on 29 August 2012, Mr Lane, one of Mr Akrill’s associates, sent an e-mail to Mr Jonathan Watson of the Bank in which he referred to the ongoing discussions to extend the lending facilities to Manor Asset and the delays in obtaining valuations of the proposed securities before observing “you do hold Phil’s Personal Guarantee against the borrowings therefore I hope there is a compromised position we can both agree”. Of course the Bank did hold Mr Akrill’s personal guarantees but I do not believe that this is necessarily inconsistent with Mr Akrill’s case that the Bank had promised they would not be enforced save in the event of a shortfall.

The Bank relies on one other matter which the judge also found persuasive. This concerns a dispute between Mr Akrill and another one of his single purpose vehicles, on the one hand, and the owner of a development in Kingston upon Hull, on the other. The owner of the site commenced proceedings against Mr Akrill and his company in which it sought the cancellation of notices registered by that company against the registered titles to the site. The company sought to defend its notices on the basis of an alleged oral agreement to purchase the site from the owner, which agreement was said to have been reached in the course of a visit by that owner’s sole director, a Mr Anderson, to Mr Akrill’s home, and the subsequent detrimental reliance on that agreement by the company sufficient to give rise to a proprietary estoppel or constructive trust. Briggs J (as he then was) gave summary judgment against Mr Akrill and his company (Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd and Philip Robert Akrill [2007] EWHC 2086 (Ch)) on the basis that Mr Akrill had procured the company to register the notices against the property without reasonable cause. Briggs J doubted that the defence of proprietary estoppel or constructive trust was maintainable but granted summary judgment on the basis that Mr Akrill’s evidence that he had concluded an oral sale and purchase agreement with the owner of the property and that his company had spent significant sums in reliance upon that agreement was wholly implausible. In reaching that conclusion Briggs J reasoned that Mr Akrill’s evidence was wholly incompatible both with the contemporaneous documents, with the company’s conduct thereafter and, indeed, with the overwhelming probabilities of the matter.

Mr Casey submits that Mr Akrill is plainly a seasoned business man. Further, on his own evidence he is a reluctant guarantor and only agreed to enter into the guarantees on the basis of Mr Cooper’s oral assurance about the Bank’s approach to enforcement. But, continues Mr Casey, given his experience before Briggs J only two years before, it is inconceivable that he would not have sought to document the fundamental oral basis of the transactions had it been as he now describes in his evidence.

I recognise that this is another powerful point. The judge plainly thought so too. Nevertheless, I must also have regard to all the circumstances of this particular course of dealing. In that regard it seems to me that the following points are also of some importance. First, the particular representations which Mr Akrill maintains were made to him by Mr Cooper and on which he relied, were entirely consistent with the earlier representation which he maintains was made to him by Mr Houghton and Mr Griffiths in connection with the Salford site. The Bank has not, as yet, adduced any evidence disputing that this earlier representation was made, perhaps because it was not until relatively late in the day that Mr Akrill ever suggested that he relied upon it. Second, I do not consider that Mr Akrill’s evidence of his dealings with Mr Cooper is inherently wholly implausible. In that regard Mr Akrill has given an account which condescends to some detail about his discussions with Mr Cooper and maintains that, in the course of those discussions, Mr Cooper was open with him and told him that his annual bonus was discretionary, that he had to justify it each year and that the proposed deal in respect of Manor Mill would be reflected in it. He says that it was in this context that Mr Cooper gave him the first assurance about his own personal liability upon which he relied. Third, I consider account must also be taken of the evidence of Mr Akrill’s wife that she overheard the conversation between Mr Akrill and Mr Cooper concerning the personal guarantee sought by the Bank in connection with the extension of the facility to Manor Property. Mr Cooper has of course denied making the representations which Mr Akrill attributes to him. But this sharp conflict in the evidence cannot, it seems to me, be resolved without cross examination. In all these circumstances I have come to the conclusion that Mr Akrill’s case, though improbable, is not wholly implausible.

The second and third issues each relate to arguments by Mr Akrill that the Bank’s right to require repayment from Manor Asset had not accrued at the time it made demands on the Manor Asset guarantee.

The first of these arguments runs as follows. The final Manor Asset facility provided that the loan was repayable on demand, but in any event by 30 November 2011. 30 November 2011 came and went without the Bank making any demand. Indeed, for over a year thereafter, the Bank continued to provide loan facilities to Manor Asset and charged interest for so doing. It is clear from the correspondence and other matters that both parties conducted themselves as if a loan were in place. However, this loan was not advanced under the contractual terms and conditions in place until 30 November 2011 but rather under the terms and conditions of a new implied loan agreement. Further, it is to be inferred that this new loan agreement provided that Manor Asset’s facilities were repayable on reasonable notice, said by Mr Akrill to be one year, because both parties would have appreciated in late 2011 when the facility was extended and the new agreement was formed that repayment on demand was a “non-starter”.

As I have indicated, the judge rejected this argument on the basis that all that happened on 30 November 2011 was that repayment became due. However, he did not address Mr Akrill’s contention that, thereafter, the parties conducted themselves in such a way that it may properly be inferred that there was a new implied loan agreement, including a term that the loan was only repayable on reasonable notice. Once again it seems to me to be improbable, to say the least, that Mr Akrill will prevail on this argument at the end of the day but again I have been persuaded that his case is not fanciful in the particular and unusual circumstances which I have outlined.

I come then to Mr Akrill’s final argument, that the Bank was estopped by convention from requiring repayment of the Manor Asset facility on demand and was obliged to give reasonable notice. I agree with the judge that this argument has no real prospect of success. As Mr Casey submits, and I accept, it is a necessary ingredient of such an estoppel that the shared assumption of the parties (here, at the least, that the Bank would only require repayment on reasonable notice) should be expressly communicated between them. There is no evidence in this case that any such communication took place and so this argument is not tenable as a matter of law.

For all the reasons I have given I have reached the conclusion that the judge fell into error in finding that Mr Akrill had no real prospect of establishing that, as a matter of fact, Mr Cooper made to him the particular representations upon which he claims he relied. I also believe the judge fell into error in concluding that Mr Akrill had no real prospect of establishing that, after 30 November 2011, the Bank extended a loan facility to Manor Asset on the basis that repayment could only be enforced on reasonable notice. Nevertheless, I am also satisfied that it is improbable that Mr Akrill’s case on either issue will succeed. In these circumstances I believe that this is an appropriate case in which to give conditional leave to defend. It is well established that any condition must be one which is capable of being complied with. This is not a matter which was explored before the judge and, this being so, the parties were in agreement before this court that, were we to reach the conclusion that conditional leave to defend should be given, the matter should be remitted to the High Court.

Accordingly I would allow the appeal to the extent I have indicated and direct that the application be remitted to the High Court for consideration of the appropriate conditions to impose. The judge hearing the matter will no doubt consider, so far as he or she considers it appropriate, the sufficiency of the disclosure which Mr Akrill has made in his evidence in support of the stay application of the assets available to him and the various Manor Group companies.

I agree.

I also agree.