Wittmann (UK) Ltd v Willdav Engineering SA [2007] EWCA Civ 824 (31 July 2007)

Wittmann (UK) Ltd v Willdav Engineering SA [2007] EWCA Civ 824 (31 July 2007)

The guarantee executed by Willdav Engineering S.A. was not discharged by the financing arrangements because Automold's original obligation to pay for the goods was only reduced, not extinguished, by the payments from the finance companies. The guarantee continued to apply to Automold's residual liability, and Willdav remained liable as a primary obligor under the guarantee. The restructuring of the contractual arrangements did not substitute entirely new contracts outside the guarantee's scope, and the guarantee was not rendered meaningless by the financing arrangements, given the parties' contemplation of external financing.

Citation
[2007] EWCA Civ 824
Parties
Claimant/respondent: Wittmann (UK) Limited; Defendant/appellant: Willdav Engineering S.A.
Jurisdiction
England and Wales
Judgment Date
31 July 2007
Procedural Posture
Civil Appeal / Appeal From High Court (mercantile List) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Guarantee Liability, Variation and Substitution of Contracts, Suretyship, Financing Arrangements, Statute of Frauds
Contract Law Commercial Law Guarantee Liability Variation and Substitution of Contracts Suretyship Financing Arrangements Statute of Frauds

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Parties

Wittmann (UK) Limited

Claimant/respondent

Willdav Engineering S.A.

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (mercantile List) to Court of Appeal

Legal Issues

  1. 1 Does the guarantee executed by Willdav Engineering S.A. extend to Automold's residual liability after financing arrangements with third-party finance companies?
  2. 2 Did the restructuring of the contractual arrangements discharge the original contract and thus the guarantee?
  3. 3 Is Willdav discharged from liability as guarantor due to changes in the principal contract or the substitution of new contracts?

Ratio Decidendi

The guarantee executed by Willdav Engineering S.A. was not discharged by the financing arrangements because Automold's original obligation to pay for the goods was only reduced, not extinguished, by the payments from the finance companies. The guarantee continued to apply to Automold's residual liability, and Willdav remained liable as a primary obligor under the guarantee. The restructuring of the contractual arrangements did not substitute entirely new contracts outside the guarantee's scope, and the guarantee was not rendered meaningless by the financing arrangements, given the parties' contemplation of external financing.

Court Disposition

Appeal dismissed

Orders

  • Judgment for Wittmann (UK) Limited for the sum of £405,255 and interest under the guarantee.