Close Brothers Limited v Rooster Trucking Company Limited & Ors.

“[Mr Taylor] does not admit that he executed the [guarantee] exhibited, to guarantee the debts of [Rooster]. [Mr Taylor] has no recollection that he contracted with [Close] to be guarantor for [Rooster] under [the guarantee] for finance under [the hire purchase agreements]. [Close] is put to strict proof of the document claiming to be [the guarantee].”

On 29 June 2017 I attended Woodstock Distribution Centre in Oldham for Rooster to execute the finance agreements … and for David to execute his personal guarantee. Woodstock Distribution Centre was David’s business premises at that time. I have been there many times before. The signing meeting took place in the boardroom. Both David and Luke attended the meeting. Luke executed the finance agreement on behalf of Rooster and David executed his personal guarantee.

As David wasn’t a director of Rooster he was signing what I call a non-connecting personal guarantee. … By signing [a ‘confirmation letter’], David confirmed to Close that he was fully aware of the guarantee’s implications. The letter was signed by David at the meeting on 29 June 2017 at the same time he signed his personal guarantee.”

“I understand that Close Brothers T/a Close Brothers Asset Finance have asked for the personal guarantee of myself and Close Brothers Limited T/a Close Brothers Asset Finance have also indicated that I should seek independent legal advice concerning the implications of such a guarantee.

I am fully aware of the implications of this guarantee and I am happy to enter into this Agreement without taking independent legal advice.”

“Essentially Mr Taylor’s position is: ‘I’m happy to pay any money I owe, but for 8 months now, Close Brothers, I’ve been asking you for the account documents from which I can work out how much I owe. The reason I, Mr Taylor, don’t have any account documents is because they were taken away by bailiffs who seized my computers’.”

“The final point I have under the heading of ‘bad points’ (if I can put it that way) is the question of whether the guarantee was signed or not. Really I have nothing more than a bald assertion that Mr Taylor is not very sure whether he signed it. It is an unevidenced point. It is not fleshed out in the statements, it is hardly fleshed out in the skeleton arguments, and it is not something really that gets me very far in deciding whether there is a real prospect of successfully defending the claim in the face of the perfectly logical submission that Mr Finlay [who was appearing for Close] made, which was that when one looks at the background to this who on earth would have provided finance for this company given what had happened to its predecessor without seeking personal guarantees in return.”

“24 I can accept that [Mr Taylor] would have preferred not to … offer further guarantees, but it is clear to me that if the claimant was not going to default TTX and Mr Taylor on the original agreements, he really had no choice. As DJ Richmond correctly found, it makes absolutely no sense at all that in the context of default by an existing lessee that had gone into insolvency, the liability would be transferred over to another company that may or may not have been worth anything in substance and the previous guarantee and rights that Close Brothers had against Mr Taylor under the existing guarantee would have been given up, together with an existing claim against him worth £291,000 that had already accrued.

25 I am afraid, therefore, that the belated attempt to argue that the guarantee was a forgery, which is inherently unlikely in the circumstances, does not have any real prospect of success at trial. Despite Mr Taylor’s able presentation of the arguments about inconsistencies and oddities in some of the documentation, the substance of the matter appears very clear to me. There was a refinancing in relation to the assets leased to TTX, when it became insolvent and unable to continue to pay the hire, and the terms of the refinancing, which let Mr Taylor off the hook under his original guarantee, were agreement on the sums in the new hire purchase agreements to be further guaranteed by Mr Taylor.

26 In those circumstances, I am afraid that I am not persuaded that there is any real prospect of the new defences of Rooster and Mr Taylor succeeding at a trial and, therefore, I refuse permission to appeal against DJ Richmond’s refusal to set aside the default judgment.”

“D2 [i.e. Mr Taylor] has always maintained that he did not sign the personal guarantee. The judgment in default against D2 has always been regrettable and was a result of D2 acting as a litigant in person at the time of the judgment and predominantly thereafter and lacking sufficient knowledge of necessary CPR and Court procedures …. D2 fervently maintains that he and D3 [i.e. Mr Luke Taylor] did not sign personal guarantees in respect of the liabilities of D1 [i.e. Rooster] ….”

Mr David Derbyshire requested that Mr David Taylor sign a personal guarantee.

Mr David Taylor was extremely robust in his response. Mr David Taylor refused point blank to sign any further personal guarantees on the grounds that Mr Taylor was ‘on the hook’ with the Bank (Yorkshire Bank) and was not prepared to extend his exposure further.

Mr Derbyshire accepted Mr David Taylor’s response, they shook hands. Mr Derbyshire offered his sympathies with the dilemma facing the Taylor’s transport company and depot. Mr Derbyshire left the premises.”

Next, Mr Doru Vlad Costache, who was employed by TTX as general manager, said in a witness statement dated 22 January 2022 that, while he had not been in the board room where the meeting of 29 June 2017 had taken place, his office had been next door and, “[a]s [he] was going about [his] own business, [he] was listening to the conversations going on in the board room”. Mr Costache went on:

Mr Derbyshire had come to Oldham to have Mr Luke Taylor sign for the Tiger Trailer ….

Mr Derbyshire asked Mr Luke Taylor to sign a personal guarantee. At which point Mrs. Taylor stopped proceedings. Mrs. Taylor informed Mr Derbyshire that her son would not sign any guarantees.

I can confirm that Mr Luke Taylor did sign the hire purchase agreement ….

I can also confirm that Mr Luke Taylor did not sign a personal guarantee.

Mr Derbyshire accepted Mrs Taylor’s comments. Mr Derbyshire and his assistant left the Taylors home.”

“So in ’22, after that hearing, I had to go and embarrass myself by going to see two of my ex-employees, because I knew that they were all privy to what had gone on upstairs, and they were all privy to what was going on upstairs because … TTX went, in inverted commas, ‘bust’. And, at that point, I had a face full of bankers, insolvency practitioners, Uncle Tom Cobley and all, and so that I didn’t forget anything I had people witnessing everything I were doing.”

… I do remember that Vlad’s [i.e. Mr Costache’s] office was next to the boardroom at Woodstock. This is the only part of his statement that is correct …. Vlad would sometimes come in and say hello to me when I visited David but he was never present at any meetings where David or Luke signed documents …. Dave didn’t tell me to ‘f*ck off’. He signed his guarantee without raising any concerns or questions about it.

I don’t remember Mr Fox or Mrs Bradsell-Alty in a business setting at all. I don’t know who Mr Fox is and I don’t know why an ‘office administrator/wages clerk’ like Mrs Bradsell-Alty would be at a signing meeting. If Mrs Bradsell-Alty was Luke’s girlfriend, I may have met her at a race meeting but I can’t remember that.

David’s wife was at home when we signed up HPA ATEB011845 [i.e. the hire purchase agreement which Mr Luke Taylor signed on behalf of Rooster on 13 July 2018] but she wasn’t involved and didn’t stop anything. She was floating around in the kitchen and in the background. My memory is that it was a very normal sign up, very ordinary. I remember the union jack memorabilia and the fine china being out and that it was still all friendly hugs and kisses as I left.

The statements admit that I requested guarantees from the Taylors at each signing meeting but allege I was told guarantees wouldn’t be given. Had that happened, the deals would not have gone ahead.

I’ve worked for Close for more than 20 years and if a deal was approved with a guarantee it wouldn’t just go through if the guarantee wasn’t given. There’s credit managers, there’s a team in pay-outs, it goes through levels of checks to make sure that whatever Close is paying out on matches the proposal. What is returned by me has to marry up to the acceptances and to the figures that were accepted and then its authorised.

If there’s something wrong when the deal gets handed in for processing and pay out, then it’s checked and I am told to go back and do it correctly. I’ve done that before when an issue has been spotted. I had to re-arrange the meeting and go back. But if the Taylors refused to sign their guarantees, all the paperwork would have been taken away – the documents and everything – and the deal wouldn’t have happened.”

“The principles are, briefly: first, there has to be a ‘conscious and deliberate dishonesty’ in relation to the relevant evidence given, or action taken, statement made or matter concealed, which is relevant to the judgment now sought to be impugned. Secondly, the relevant evidence, action, statement or concealment (performed with conscious and deliberate dishonesty) must be ‘material’. ‘Material’ means that the fresh evidence that is adduced after the first judgment has been given is such that it demonstrates that the previous relevant evidence, action, statement or concealment was an operative cause of the court's decision to give judgment in the way it did. Put another way, it must be shown that the fresh evidence would have entirely changed the way in which the first court approached and came to its decision. Thus the relevant conscious and deliberate dishonesty must be causative of the impugned judgment being obtained in the terms it was. Thirdly, the question of materiality of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence.”

“48 … I observe that the draft Defence, settled with the benefit of legal advice, as considered by DJ Richmond on 15 July 2020, simply put the Claimant to strict proof regarding the execution of the guarantee. There was no allegation or assertion at that point that Mr Taylor’s signature had been forged, and Mr Taylor did not go so far as to deny that the relevant guarantee had been signed by him. This was the basis on which DJ Richmond, on 15 June 2020, was asked to and did deal with the matter.

49 The matter was then further ventilated on the applications for permission to appeal, in particular at the hearing before Fancourt J on 13 October 2021. Mr Taylor then went further, as I have said, by denying, in his witness statement dated 10 October 2021, having executed the guarantee, but the case was not advanced with the particularity that Mr Taylor now introduces with the evidence subsequently produced. I note, for example, the graphic evidence that Mr Taylor now seeks to give to the effect that he recalls having told Mr Derbyshire to “f*** off”. If true, one might have expected him to have mentioned this detail in his witness statement dated 18 October 2019 when he said that he told Mr Derbyshire ‘robustly’ that he would not sign any more guarantees. More fundamentally, this is inconsistent with the position that had been adopted in front of DJ Richmond, where it was being suggested he could not recollect having signed the guarantee at all. As Fancourt J held, this new case as to forgery lacked any credibility. Surely, if true, Mr Taylor would have recalled his robust response to Mr Derbyshire and referred to it, particularly after Mr Derbyshire made his witness statement evidencing execution of the guarantees.

50 So far as the expert evidence is concerned, what is said by Mr Taylor in relation to that is that the expert evidence was obtained only after he had read a judgment of Chief Insolvency and Companies Court Judge Briggs in the case of Lynch v Cadwallader & Aldermore Bank Plc. [2021] EWHC 328 (Ch), a decision dated 23 February 2021 (not 2022), in which he read of the requirement of a bank to prove execution of a guarantee and where, on the facts of that case, the judge did not find the case to have been proved where expert evidence had been advanced.

51 So far as the expert’s evidence itself is concerned, I have already noted what it says, but I do note that in relation to Luke, it is the expert’s evidence that it is not his signature not only on the guarantees that he signed, but also certain hire purchase documentation, whereas it is Luke’s own evidence in his witness statements that he did actually sign the HP agreements, albeit that he now denies having signed the personal guarantees.

52 I also remind myself of the commercial realities of the position, as identified by Mr Finlay in the course of his submissions and as commented upon by Fancourt J in the course of his judgment refusing permission to appeal. If Mr Taylor had robustly informed Mr Derbyshire that no further guarantees would be given, it is difficult to see why the Claimant would have been prepared to proceed with the re-financing.

53 It is conceivable that Mr Taylor might have persuaded himself now that he did not, in fact sign his guarantee, having heard that it might be necessary to show that a judgment was obtained by fraud, or at least that the advancement of a positive case in relation to the non-execution of the guarantees is a requirement of his case. However, having regard to the evidence as a whole, I do not consider that the position has moved on significantly, so far as the credibility of the evidence before the Court as to forgery of Mr Taylor’s signature on his guarantee is concerned, from that as considered by Fancourt J when he gave judgment refusing permission to appeal.”

“58 There are, in my judgment, a number of real difficulties in any case that Mr Taylor might seek to advance in seeking to persuade the Court that there is some real prospect of the 25 November 2019 judgment, the judgment of DJ Richmond declining to set aside that judgment, or the judgment of Fancourt J refusing permission to appeal being successfully challenged on the basis of having been obtained by fraud.

59 Firstly, the alleged fraud, i.e. the alleged forgery of the guarantees and the alleged false evidence of Mr Derbyshire regarding the execution of the guarantees, was not based upon, and nor was it revealed by evidence as to any fraud on the part of the Claimant in obtaining any judgment, and in particular any evidence discovered since when the 2019 Default Judgment was obtained, or the merits thereof were reviewed by DJ Richmond on 15 June 2020 and then by Fancourt J on 13 October 2021. Rather, Mr Taylor changed his position. Having said prior to 10 October 2021 that he could not recollect signing his guarantee, he then said in his witness statement that he could recall informing the Claimant’s David Derbyshire in robust terms that he would not make any further guarantee, and alleged that his signature on his guarantee was forged. That was the position before Fancourt J, when Fancourt J determined the matter against Mr Taylor. Mr Taylor has simply now come up with further evidence in support of his position to that then deployed, but that does not provide, as I see it, any basis for re-opening the matter on the grounds of any judgment having been obtained by fraud.

60 Secondly, as I have indicated by reference to the commentary in [Halsbury’s Laws of England, volume 11 (2020 edition)] at paragraph 1213, apart from showing that the fraud was discovered since the judgment, a strong case of fraud must exist, and any new claim alleging fraud is liable to be stayed or dismissed unless the fraud alleged has a reasonable prospect of success. In light of the considerations that I have identified, I do not consider that a strong case, or one demonstrating a reasonable prospect of success has been demonstrated on the evidence before the Court.

61 The third consideration is a final discretionary consideration so far as the application to grant a stay today is concerned. Although the application is prefaced on the basis that there will be a new claim to challenge the judgment, there is no such new claim and therefore no properly particularised and pleaded case for the Court to consider. As a matter of discretion, I would not, in any event, have been prepared to grant a stay of enforcement of the charging order without seeing at least a draft pleading.

62 However, the first of the above considerations is the most fundamental and important. The final charging order is based on a regular judgment that has been fully reviewed by the Court, before DJ Richmond on 15 June 2020, and again before Fancourt J on 13 October 2021, when he fully reviewed the defences being advanced and rejected them as having no real prospect of success. The case of fraud being advanced by Mr Taylor is not, on proper analysis, to the effect that any judgment has been obtained by fraud. The case of fraud is not based not upon the discovery of evidence after the event that impugns any decision. Rather the alleged fraud was a matter very much in issue before the Court when it finally determined the matter, it is just that Mr Taylor has come up with what he says is better evidence after the event. That does not in my judgment provide a proper basis for impugning the process that has led to the making of the final charging order.”

“D2 [i.e. Mr Taylor] does now have better evidence that he did not execute the relevant guarantee in the form of witness statements from D3 [i.e. Mr Luke Taylor], and employees of D1 [i.e. Rooster], as well as an expert handwriting report. However, I do not consider that this provides a credible basis for setting aside the Judgment as obtained by fraud, or for staying enforcement of the charging order in that:

It cannot plausibly be suggested that Close was willing to substitute hire purchase agreements with Rooster for those it had with TTX without taking a new guarantee. Close already had the benefit of a guarantee from Mr Taylor in respect of TTX’s liabilities. In circumstances where the Taylors wished to transfer the relevant goods and equipment to a new company, it is unlikely in the extreme that it was prepared to do so on the basis that it would have no redress against anyone but the successor company. In his judgment of 13 October 2021, Fancourt J, endorsing District Judge Richmond, said at paragraph 24 that “it makes absolutely no sense at all that in the context of default by an existing lessee that had gone into insolvency, the liability would be transferred over to another company that may or may not have been worth anything in substance and the previous guarantee and rights that Close Brothers had against Mr Taylor under the existing guarantee would have been given up, together with an existing claim against him worth £291,000 that had already accrued”. I agree;

That Close expected Mr Taylor and, later, Mr Luke Taylor to guarantee Rooster’s obligations is confirmed by the fact that guarantees were evidently prepared and brought to the meetings of 29 June 2017 and 13 July 2018. The idea that Close would have been happy to go ahead after Mr Taylor or his son had refused to sign a guarantee is absurd;

I suppose that does not exclude the possibility that Close was misled into believing that Mr Taylor and his son had signed the requisite guarantees and “confirmation letter” because Mr Derbyshire had forged their signatures. This theory would seem to involve Mr Derbyshire proffering the guarantees for signature by Mr Taylor (on 29 June 2017) and Mr Luke Taylor (on 13 July 2018), accepting their refusal to sign them, forging their signatures on the guarantees and “confirmation letter” and then reporting to those at Close responsible for the “levels of checks” of which Mr Derbyshire spoke in his 20 September 2022 witness statement that the documents had been duly signed. Why, one wonders, would Mr Derbyshire, a regional sales manager who had worked for Close for many years, engage in such outrageous misconduct, involving fraud as against both the Taylors and Close? No possible motive is evident. On top of that, Mrs Bradsell-Alty referred in her witness statement to Mr Derbyshire having left Mr Taylor’s home on 13 July 2018 with “his assistant”. That suggests that an “assistant” would also have had to be aware that Mr Luke Taylor had not signed the guarantee in his name;

Mr Taylor did not originally deny having signed the guarantee. His application to set aside the default judgment against him was put forward on the basis that Close had “substantially failed to disclose … the full extent of payments made to [it]” and that there was a need “to correct a gross error in amount of the Judgment Debt”. Moreover, Mr Taylor explained in the draft defence that he had “no recollection” of contracting to be a guarantor, not that he remembered refusing to execute a guarantee. It is true that, several months later, after Mr Derbyshire had said in a witness statement that he had witnessed Mr Taylor and his son signing the guarantees, Mr Taylor asserted that he “did not sign a personal guarantee”, but the focus of the submissions advanced on his behalf at the hearing before District Judge Richmond on 15 July 2020 was still on quantum, not liability. The District Judge was told at the hearing that Mr Taylor’s position was essentially, “I’m happy to pay any money I owe, but … I’ve been asking you for the account documents from which I can work out how much I owe”. It was not until more than a year later, in a witness statement dated 10 October 2021, that Mr Taylor first referred to having told Mr Derbyshire that he would not sign any more guarantees “robustly”;

Mr Taylor asserted in the application notice of 3 March 2022, in a section verified by a statement of truth, that he had “always maintained” that he had not signed the guarantee in his name. That is plainly incorrect: he had not initially denied signing the guarantee;

Mr Taylor told Fancourt J that in June 2017 that he “would absolutely not sign any more [personal guarantees] because [he] was up to the hilt” and “wouldn’t put anything on the line”. In a similar vein, Mr Fox and Mr Costache said in their witness statements that, at the meeting on 29 June 2017, Mr Taylor “refused point blank to sign any personal guarantees on the grounds that [he] was ‘on the hook’ with the Bank … and was not prepared to extend his exposure further” and that Mr Taylor told Mr Derbyshire to “f*ck off” on the basis that he “would not expose himself further” and “already had significant ‘pg’s’ with Yorkshire Bank”. However, Mr Taylor was already “on the hook” to Close as result of the guarantee he had given for TTX and so was not being asked to increase his exposure. It is therefore hard to imagine that Mr Taylor would have declined to provide a guarantee for Rooster, let alone that he would have done so in such trenchant terms, for the reasons given or that he would have voiced such objections to Mr Derbyshire. Nor is it persuasive that Mr Taylor’s “usual business practice” is said to be “not to sign personal guarantees for any company of which [he is] not a director or major shareholder”. The situation was not a “usual” one. Mr Taylor had existing obligations to Close and the company in respect of which he was being asked to give a guarantee was his son’s;

The idea that Mr Derbyshire would have either “accepted Mr David Taylor’s response” and shaken hands or “accepted Mrs Taylor’s comments”, as Mr Fox and Mrs Bradsell-Alty have said, is also implausible;

By his own account, Mr Taylor remembered that he had not signed the guarantee in his name only when reminded of that by Mr Fox and Mr Costache. That implies that Mr Taylor’s evidence to that effect is not the product of his own independent recollection. It implies, too, that Mr Taylor had spoken to Mr Fox and Mr Costache by 23 June 2020, when he first said in a witness statement that he had not signed a guarantee. Yet Mr Taylor did not refer to having refused to sign “robustly” until 10 October 2021 and, even at that stage, there was really no more than bare assertion. There was no evidence from Mr Fox or Mr Costache until January 2022;

Mr Taylor told the Judge that in 2017 he had had “people witnessing everything that [he was] doing” and that he “knew that [two ex-employees] were all privy to what had gone on upstairs”. Supposing that to be correct, Mr Taylor would have known from the outset that, if he could not recollect whether he signed the guarantee in his name, he should consult the ex-employees. Yet Mr Taylor at first went no further than to not admit that he had signed;

It strains credulity that Mr Taylor and his son should both now deny signing when they had previously said no more than they could not recollect doing so; and

With regard to the handwriting evidence on which Mr Taylor relies, (a) the expert was working from photocopies and from signatures of Mr Taylor which had been supplied by him and, for the most part, generated for the purpose of the report, (b) as the Judge observed, “in relation to Luke, it is the expert’s evidence that it is not his signature not only on the guarantees that he signed, but also certain hire purchase documentation, whereas it is Luke’s own evidence in his witness statements that he did actually sign the HP agreements, albeit that he now denies having signed the personal guarantees” and (c) an expert instructed by Close has evidently arrived at contrary conclusions; and

The additional documents on which Mr Taylor sought permission to rely in his application dated 30 March 2023 do not advance his case that his signature was forged on the guarantee in his name and the “confirmation letter”.