Sir William Shelton, Tory MP for Clapham for over 20 years and member for Streatham until 1992, and his wife, Lady Anne Shelton, have been ordered by Deputy High Court Judge Geddes to pay over £1m to Lloyds TSB Bank plc.
The banks claim arose under the terms of a business guarantee dated 11 January 1991, limited to £300,000, that was amended by a deed dated 5 August 1991 increasing the limit to £700,000.
The guarantees were in relation to the 1989 purchase of “the Firs”, a disused maternity hospital in Bournemouth, which the couple intended to convert into a nursing home. The project ran into difficulties and was sold uncompleted in 1994 for £258,235.
The couple claimed, among other things, that the August deed could not take effect as a guarantee, or as a variation of the January guarantee, because it was too uncertain in its terms.
They also maintained that in November 1991 a bank representative agreed not to enforce the guarantee beyond the sale of their £298,000 home in Ponsonby Terrace, Chelsea. The couple said that there was an agreement not to pursue them for the balance of their liabilities to the point where it would also affect their Georgian manor house at Long Crendon, Buckinghamshire.
But the judge ruled that the bank was entitled to recover the guaranteed sum of £700,000 plus interest; a total of £1,153,303. He said that the August deed was effective in amending the January guarantee, and was not void for uncertainty, and ruled that the bank had not agreed to refrain from enforcing the guarantee in full.
The court was told that Long Crendon manor house was now on the market for £1.1m.
Leave to appeal was refused.
Lloyds Bank plc v Shelton and another Queens Bench Division (Judge Geddes, sitting as a judge of the High Court) 20 June 2000.
PLS News 22/6/00
