National Westminster Bank Plc v Waite & Anor

In this action the claimant bank (“NatWest”) claims from the defendants sums alleged to be due under two joint personal guarantees which they gave in 1997 to secure the debts of a company called South Lakeland Care Limited. The first guarantee, dated 6th February 1997 was for £25,000. The second guarantee, dated 25th July 1997, was for £100,000. The defendants say that the guarantees were procured by undue influence and that neither is enforceable.

The first defendant, Mr Waite, was a senior police officer until he retired sometime in 1992. His wife, the second defendant (they are now divorced) was a nurse. She had experience of working in nursing homes. When Mr Waite retired, a friend who was a neighbour suggested that they should go into the business of running a care home for the elderly. He assisted them to produce a business plan. At the beginning of March 1993, the defendants purchased a residential care home in Bath called Kingsley House.

The defendants were sent two guarantees, each in a sum of £25,000. Mr Waite wrote to the bank on 26th April querying whether this was right. He said that his understanding was that he and his wife would be giving a joint guarantee for £25,000. Someone from the bank telephoned Mr Waite a few days later to say that the Borrowing Terms had required a joint and several guarantee of £25,000 from himself and his wife. However it had been a mistake to send two separate guarantee documents, a single guarantee signed by the two of them acknowledging joint and several liability would suffice.

On 17th September 1996, Mr Edwards had a meeting with Mr Waite, which was primarily to discuss a new venture of Mr Waite’s in the fine art business. But progress at Redlands was also discussed, and the subject of the guarantee. Mr Edwards made the following note of that meeting on the question of the guarantee:

This is what eventually happened. On 9th December Mr Edwards attended the re-opening of Redlands. He mentioned to the defendants on that occasion the need for the guarantee to be signed. There was a delay over Christmas and New Year, and then in January one of the defendants was unwell. The Sanctioning Department of the bank began to press Mr Edwards to bring the matter to a head. At the end of January 1997, he arranged with the defendants that they would be interviewed on 6th February.