National Merchant Buying Society Ltd v Bellamy & Anor

National Merchant Buying Society Ltd v Bellamy & Anor

The guarantee in question was a freestanding 'all moneys' guarantee, not limited by the credit limit in place at the time it was given. Its language and the surrounding circumstances did not support any implied limitation. Therefore, increases in the credit limit or liabilities incurred for supplies to an associated company did not discharge Mr Mallett from liability under the guarantee.

Parties
Claimant/respondent: National Merchant Buying Society Limited; First Defendant: Andrew Bellamy; Second Defendant/appellant: Stephen Mallett
Jurisdiction
England and Wales
Judgment Date
02 May 2013
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Guarantees, Suretyship, Variation of Contract, Interpretation of Contracts
Contract Law Commercial Law Guarantees Suretyship Variation of Contract Interpretation of Contracts

Case Brief

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Parties

National Merchant Buying Society Limited

Claimant/respondent

Andrew Bellamy

First Defendant

Stephen Mallett

Second Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether an increase in the principal debtor's credit limit without the guarantor's consent discharged the guarantor from liability under an 'all moneys' guarantee.
  2. 2 Whether the guarantee covered liabilities incurred by the principal debtor for supplies delivered to an associated company (CTF Midlands Limited).

Ratio Decidendi

The guarantee in question was a freestanding 'all moneys' guarantee, not limited by the credit limit in place at the time it was given. Its language and the surrounding circumstances did not support any implied limitation. Therefore, increases in the credit limit or liabilities incurred for supplies to an associated company did not discharge Mr Mallett from liability under the guarantee.

Court Disposition

Appeal dismissed

Orders

  • Mr Mallett remains liable under the guarantee for the sums claimed by the Society.
  • Judgment against Mr Mallett for £331,627.26 plus interest and costs.