This case concerns two applications to set aside statutory demands related to personal guarantees on a facility agreement. The applicants, having guaranteed the debt, disputed liability for default interest, arguing that the lender waived its right to such payments through email correspondence or conduct (waiver by estoppel). While the court dismissed the claim of contractual waiver, it accepted there was a triable issue regarding waiver by estoppel.

 

• Contractual waivers must comply with written requirements in agreements. Emails qualify as ‘writing’ and can be signed electronically through name inclusion in footers and sign-offs like “Kind regards.”
• Consideration is not always required to support a contractual waiver unless it constitutes a variation.
• A clear and unequivocal promise in an email may establish waiver by estoppel if there is reliance and inequity in revoking the promise.

Background

 

Tribeca Property Ltd, a company linked to Mr. Ciaran Little, borrowed £170,000 from Olympian Homes under a facility agreement dated December 2020. Mr. Little and Mr. James O’Shea provided personal guarantees for this loan.

The agreement stipulated a 2% monthly interest rate, increasing to 3% if payments were late. Although the principal debt was eventually repaid, interest remained unpaid. Nearly a year later, Olympian Homes served statutory demands for the unpaid interest. Mr. Little and Mr. O’Shea sought to set aside these demands, arguing that Olympian Homes had waived its right to interest either contractually (through emails) or by estoppel.

 

Court’s Decision

 

Contractual Waiver: The court rejected the claim that Olympian Homes had contractually waived interest, as the facility agreement required written waivers, and the emails cited did not constitute a clear waiver of interest payments.

Waiver by Estoppel: The court found a genuine triable issue. An email from an agent of Olympian Homes contained a clear promise that the applicants were released from their obligations, accompanied by a draft Deed of Release. The court held that:   – The email indicated an intent to induce reliance.
– The applicants had relied on the representation by not arranging to pay interest or seeking advice.
– It was a triable issue whether it would be inequitable for Olympian Homes to now insist on payment after significant time had passed.

Outcome: The court ruled that the debt was disputed on substantial grounds and ordered the statutory demands be set aside.

 

Practical Implications

 

This case highlights the importance of verifying waiver provisions in contracts and understanding how electronic communications can impact legal obligations. Practitioners should ensure waivers are properly documented and be aware that email communications may establish waiver by estoppel.

 

How Muldoon Britton Can Help

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