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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Harvey v Dunbar Assets Plc [2017] EWCA Civ 60 (13 February 2017)
Cite as: [2017] WLR(D) 99, [2017] EWCA Civ 60

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Neutral Citation Number: [2017] EWCA Civ 60
Case No: A3/2015/4267

His Honour Judge Kaye QC (sitting as a Deputy High Court Judge)

[2015] EWHC 3355 (Ch)

Royal Courts of Justice
Strand, London, WC2A 2LL

B e f o r e :



- and -



Mr David Schmitz (instructed by Hindle Campbell Law) for the Appellant
Mr Michael Todd QC and Mr Joseph Curl (instructed by DLA Piper UK LLP) for the Respondent

Hearing date: 15 December 2016



Crown Copyright ©

    Lord Justice Henderson:

    Introduction and background

  1. This appeal raises an issue of principle in the law of bankruptcy on which there is no previous authority directly in point. If:
  2. (a) a debtor's application to set aside a statutory demand ("SD1") is dismissed on the merits, by application of the familiar test that the debtor has no reasonable prospect of establishing a defence or cross claim which would either extinguish the debt or reduce it below the minimum bankruptcy level of £750; but

    (b) SD1 is subsequently set aside on appeal, on an unrelated ground;

    (c) the unrelated ground is then disposed of in the creditor's favour, in other proceedings to which the debtor is not a party; and

    (d) the creditor then serves a second statutory demand ("SD2") on the debtor, relying on precisely the same debt as he did when he served SD1:

    is it open to the debtor to apply to set aside SD2 on the same grounds which he unsuccessfully raised in opposition to SD1, and which he never sought to uphold on the appeal from SD1?

  3. That, in essence, is the position in the present case. The debtor is the appellant, John Spencer Harvey ("Mr Harvey"). The creditor is Dunbar Assets Plc (formerly Dunbar Bank Plc) ("Dunbar"). The debt arises under a deed of guarantee ("the Guarantee") dated 10 March 2008, and made between Mr Harvey and three others (together defined as "the Guarantor") and the Bank, whereby the Guarantor guaranteed the liabilities of a company called Vision Development Ashbrooke Limited ("Vision") to the Bank, subject to a proviso that the amount recoverable under the Guarantee should not exceed £720,000 together with specified interest, charges, costs and expenses.
  4. The business of the principal debtor, Vision, collapsed in the wake of the financial crisis of 2008/9, and on 22 March 2011 the Bank called in its loan to Vision in the sum of approximately £4.8 million. None of this was paid, and on 4 April 2011 the Bank made a formal demand on Mr Harvey for £720,000 under the Guarantee. No payment was received from Mr Harvey, and the Bank then served SD1 (which was dated 16 June 2011) on Mr Harvey claiming payment of £720,000 plus accrued interest.
  5. Mr Harvey's application to set aside SD1 was heard on 27 January 2012 by District Judge Pescod, sitting in the Newcastle upon Tyne County Court. The main case advanced by Mr Harvey, who was represented by solicitors and counsel (Mr Simon Goldberg), was that he had been induced to enter into the Guarantee by an oral assurance given by Anthony Cullen, the regional manager of the Bank, to the effect that the Bank had never enforced a personal guarantee, and that it would not do so in the future. This was said to create a promissory estoppel which prevented the Bank from enforcing the Guarantee.
  6. For the reasons given in a reserved judgment which he handed down on 20 March 2012, the district judge held that this defence disclosed no triable issue which had a real prospect of succeeding. He summarised his conclusions in paragraph 33 of his judgment, as follows:
  7. "Of course, I am not trying the case and I must decide only whether or not the applicant has satisfied me that he has a triable defence with a prospect of success which is more than fanciful. I am not persuaded that he has done so. First I am not satisfied that the applicant has a real prospect of establishing that Mr Cullen made an irrevocable and binding promise. Second I am not satisfied without more that the applicant has more than a fanciful prospect of succeeding in an argument that he treated Mr Cullen's comments as being a binding irrevocable promise on which he relied."
  8. Between the conclusion of the hearing on 27 January 2012 and the handing down of judgment some two months later, it came to the attention of Mr Harvey and his advisers that one of the other guarantors, Darren John Lenney ("Mr Lenney"), had succeeded in setting aside a statutory demand against him on the ground that his signature on the Guarantee was allegedly a forgery. Mr Lenney had indeed given evidence to this effect in his witness statement in support of Mr Harvey's application to set aside SD1, but no legal argument based on this evidence had been advanced to District Judge Pescod at the hearing on 27 January. With the benefit of representation by new solicitors, it now occurred to Mr Harvey that he might have a good defence in law to SD1 on the basis that his obligation to the Bank under the Guarantee was dependent on the valid signature of the Guarantee by each of his three co-guarantors, and that there was no binding contract at all between Mr Harvey and the Bank unless and until all the intended parties to the contract in fact became bound: see James Graham and Co (Timber) Ltd v Southgate-Sands [1986] QB 80 (CA). Accordingly, at the hearing on 20 March 2012, where Mr Harvey was represented by his newly-instructed solicitor, Mr Brown of Hindle Campbell, permission was sought to reopen the hearing so that this new point could be argued. The district judge refused this application, but indicated that it might be possible to take the point on an appeal from his order. Mr Brown then made an application for permission to appeal, which the district judge granted.
  9. It is clear from the transcript of this hearing, which we were shown by counsel for the Bank (Mr Michael Todd QC, leading Mr Joseph Curl), that the only ground on which permission to appeal was sought by Mr Brown was what he termed "the point of law in Southgate-Sands". Permission was neither sought, nor granted, in relation to the grounds on which the district judge had dismissed Mr Harvey's application. It follows that, although paragraph 3 of the district judge's order of 20 March 2012 merely said "The Defendant [sic] has permission to appeal if so advised", the grant of permission extended only to the Southgate-Sands question of law. I emphasise this point, because the wording of paragraph 3 of the order may understandably have caused some confusion when counsel now appearing for Mr Harvey, Mr David Schmitz, was first instructed shortly after the hearing on 20 March 2012, and he in fact prepared grounds of appeal on the promissory estoppel point as well. Permission to appeal on that further ground, however, was not sought from the High Court, and the appeal proceeded on the Southgate-Sands point alone.
  10. In due course, Mr Harvey's appeal on the Southgate-Sands point was heard, and dismissed, by His Honour Judge Roger Kaye QC, sitting as a judge of the High Court, on 7 September 2012: see Harvey v Dunbar Assets Plc [2012] EWHC 2890 (Ch), [2013] BPIR 66. Permission for a further appeal to this court was granted at an oral hearing by Kitchin LJ on 1 March 2013, and Mr Harvey's appeal was then allowed by the full court (Longmore, Black and Gloster LJJ) on 30 July 2013: see Harvey v Dunbar Assets Plc [2013] EWCA Civ 952, [2013] BPIR 722. By its order sealed on 2 August 2013, this court allowed the appeal and set aside SD1.
  11. The position had therefore been reached that Mr Harvey could not be held liable under the Guarantee unless and until it were determined that Mr Lenney's signature had not in fact been forged, and he had himself duly executed the deed. As Gloster LJ, delivering the leading judgment in this court, said at [10]:
  12. "The factual issue as to whether Mr Lenney's signature is genuine or is a forgery has yet to be determined in an action between the Bank and Mr Lenney …"
  13. The next stage in the history is that this issue was determined in the Bank's favour, in a Part 7 claim which it brought against Mr Lenney seeking judgment against him on the Guarantee. The trial of the action took place before Norris J, sitting in Newcastle upon Tyne. The trial took place in the absence of Mr Lenney, but he had been represented by solicitors and counsel until a few days before the trial, and the forensic handwriting experts instructed on each side agreed in their evidence that Mr Lenney had indeed signed the Guarantee. Norris J nevertheless required the Bank to prove its case, which it did to his satisfaction, and he gave a reasoned judgment: see [2014] EWHC 2733 (Ch). By his order dated 14 July 2014, Norris J made a declaration that Mr Lenney had signed the Guarantee, was liable under it, and that the Bank might enforce it. There was no appeal from this order.
  14. Accordingly, the way was now open for the Bank to renew its attempt to enforce the Guarantee against Mr Harvey. This it did by the service upon him of SD2, dated 3 September 2014, following service of a further written demand on 29 August 2014. The debt, as before, was the £720,000 due under the Guarantee, with accrued interest from the date of the further demand on 29 August.
  15. Mr Harvey then applied to set aside SD2, by an application dated 13 October 2014. In his witness statement in support of the application, Mr Harvey said that he disputed the alleged debt on the same promissory estoppel ground as before, and he referred to the evidence which he had previously filed in 2011 (consisting of an affidavit and two witness statements). He also referred to, and exhibited, a number of further statements by other persons who claimed to have had similar experiences with the Bank and had formed, or were associated with, a body called the Dunbar Action Group. Mr Harvey therefore suggested that District Judge Pescod might have been mistaken in the judgment which he gave in 2012 regarding the promissory estoppel defence.
  16. Mr Harvey then said:
  17. "It is clear to me, given the common place practice and marketing strategy of Mr Cullen and his colleagues in similar positions of authority that the representations made by him now were intended to stand as unequivocal promises or assurances which were intended to affect the legal relations between them and their clients and were reasonably understood by myself to have that effect, and, that I was reasonably to understand that I was intended to act on such assurances.
    Lest there be any doubt about it, I confirm that I would never have given a personal guarantee if I had not received Mr Cullen's assurance. I was at that point neither a director nor a shareholder in the debtor company, I had no liability whether as a principal debtor or as a guarantor, for any of the liabilities of the company and had no indirect interest in its success and had no family ties or ties of particular friendship with any of the directors or shareholders."
  18. The application came on for hearing, as it happens again before District Judge Pescod, on 17 April 2015. Mr Schmitz appeared for Mr Harvey, and Mr Curl for the Bank. In a reserved judgment, handed down on 6 July 2015, the district judge dismissed the application, and by his order dated 20 July 2015 he refused Mr Harvey permission to appeal.
  19. As the district judge recorded in paragraph 2 of his judgment, the circumstances surrounding the application were "very unusual" in that he had heard an identical application, involving the same debt and the same parties, in January 2012, and had given judgment on 20 March 2012. After setting out the background, and the rival submissions before him, the district judge concluded that there was an issue estoppel which prevented Mr Harvey from re-litigating the promissory estoppel point. In paragraph 42 of his judgment, he said:
  20. "As far as I can see the circumstances of this case are precisely those which are sought to be covered by the doctrine of res judicata, i.e. an attempt to re-litigate the same point which has already been decided between the two parties involved."
  21. The district judge was not deflected from reaching this conclusion by the new evidence adduced by Mr Harvey, which in his view was "merely more evidence of the type which was before the court at the first hearing" (paragraph 41 of the judgment). He also noted (ibid) that Mr Harvey's own further evidence added nothing factually to his evidence before the court at the first hearing, which for the purposes of his application to set aside SD1 the court had accepted. The district judge therefore confirmed (at paragraphs 45 and 47) that, if he was wrong about res judicata, he would in any event have dismissed the application for the same reasons as he had given in his earlier judgment in March 2012.
  22. Permission to appeal from the order of 20 July 2015 was refused on paper by His Honour Judge Behrens on 9 September 2015. An oral renewal hearing, with the appeal to follow if permission were granted, then took place before (again, as it happens) Judge Kaye QC on 5 November 2015. In his reserved judgment, handed down on 26 November 2015, the judge granted permission to appeal but dismissed the appeal: see Harvey v Dunbar Assets Plc [2015] EWHC (Ch), [2015] Bus LR 1383.
  23. This decision was embodied in an order dated 11 January 2016, from which Mr Harvey now appeals to this court with permission granted by Lewison LJ on 29 January 2016. The first ground of appeal raises the question of principle which I identified at the beginning of this judgment. As Lewison LJ said, it "raises an important point of principle sufficient to satisfy the second appeals test".
  24. The second ground of appeal relates to the promissory estoppel defence, and raises the question whether the courts below were justified in rejecting it in summary proceedings without a hearing. Lewison LJ commented that this ground would not, on its own, satisfy the second appeals test, but since it had real prospects of success, Mr Harvey should not be shut out from arguing it.
  25. In addition, Mr Harvey through his counsel applied at the hearing before us for permission to raise a further ground of appeal based on Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, and the decision of the Court of Justice of the European Union (the "ECJ") in Case C-74/15, Tarcau v Banca Comerciala Intesa Sanpaolo România SA (19 November 2015) ("Tarcau").
  26. With this introduction, I will now fill in a little more of the factual background and then deal with the grounds of appeal in the above order.
  27. Further facts

  28. Mr Harvey was in 2007 an established and successful businessman. He was the chairman and majority shareholder of a company called The Protector Group Limited ("TPGL") which he had founded in 1994. TPGL provided a wide range of security services with offices throughout the United Kingdom and had an annual turnover of around £7 to £8 million. In May 2008, Mr Harvey entered into a service agreement with TPGL under which he agreed to serve the company as group chairman. The company had the right to terminate his employment summarily without compensation on the happening of various events, including if he became bankrupt or entered into any arrangement or composition with his creditors. Apart from his involvement with TPGL, Mr Harvey also had other business interests, including property dealing and development in the north east of England. Earlier in his career, he had served for five years with the Royal Marines as a professional soldier.
  29. In his 2012 judgment, the district judge described Mr Harvey as "an experienced and hard-headed man of business", commenting that he was described in these terms in various witness statements and in the documentation from the Bank.
  30. In the spring of 2007, Mr Harvey was having an extension built on his house. The design work was carried out by Neil Trueman, who was the director and sole shareholder of Vision. During a visit to inspect the works, Mr Trueman told Mr Harvey that Vision was looking to acquire a site in Sunderland on which he was going to build 24 flats, with potential to increase that number to 36. Mr Trueman was seeking finance for the project, and Mr Harvey provided him with a cheque for £40,000 which he used as a deposit to secure the site. In return for his investment, Mr Harvey was to get a return from the profits of the development. Soon afterwards, however, Mr Harvey decided that he wanted no further involvement in the project, and in July 2007 Mr Trueman repaid him his £40,000. In his covering letter, Mr Trueman said:
  31. "This letter is also to confirm that you shall receive no further monies from this development by way of profits or any other returns. The £40,000 refund is a full and final payment to yourself."
  32. Having obtained planning permission to increase the development to 36 flats, Mr Trueman wished to replace his existing bridging finance with alternative funding arrangements of a more permanent nature. He first made contact with Mr Cullen of the Bank in or around September 2007, and entered into negotiations with the Bank for a loan facility agreement. Vision's initial application was refused by the Bank's credit committee in December 2007, on the grounds that the Bank would not enter into an agreement with Vision unless there was another, more creditworthy person "on board". After further negotiations, Mr Trueman reached agreement in principle with the Bank for a loan facility agreement between Vision and the Bank on the basis that Mr Lenney (a fellow director of Vision), John Bradley (the proposed builder of the works on site), Mr Harvey and Mr Trueman himself entered into a personal guarantee with the Bank. While Mr Lenney and Mr Bradley were willing to do this, Mr Harvey initially refused. He was, however, persuaded to change his mind by Mr Trueman, who had apparently been told by Mr Cullen that the Bank had never enforced a guarantee before and would never enforce one in the future. Mr Trueman relayed this information to Mr Harvey at a meeting between them, and told him that the Bank would not enter into the loan unless Mr Harvey signed a personal guarantee.
  33. While these discussions were in progress, Mr Harvey's father died on 29 December 2007. Mr Harvey had been very close to his father, and he was deeply affected by his death.
  34. Mr Harvey describes the circumstances in which his crucial conversation with Mr Cullen then took place as follows:
  35. "Although I can no longer recollect exactly, I believe that it was in the period after my father's death that Tony Cullen and I spoke by telephone regarding the Personal Guarantee. I believe that Tony Cullen called me. Tony told me that the Personal Guarantee was just an exercise which needed to be carried out before Dunbar's credit committee would approve the loan facility agreement for Vision. He also assured me during the phone call that Dunbar had never enforced a personal guarantee in the past and would never do so in the future. Finally, Tony Cullen told me that unless I signed the Personal Guarantee, Dunbar would not approve the loan facility agreement for Vision."

    Mr Cullen in his evidence strongly denies that he ever gave such an assurance to Mr Harvey, but the district judge rightly dealt with the matter on the footing that, for the purposes of deciding whether there was a triable issue, Mr Harvey's evidence had to be assumed to be correct.

  36. In early January 2008, Mr Harvey provided the Bank with a signed statement of his personal assets and liabilities, together with management accounts and annual accounts relating to TPGL.
  37. By an email dated 22 January 2008, Mr Trueman informed Mr Cullen that the likely shareholdings in Vision would be split as follows: 27% to Mr Trueman, 26% to Mr Lenney, 26% to Mr Harvey and 21% to Mr Bradley.
  38. On 29 January 2008, the Bank's credit committee agreed to provide Vision with a loan facility, subject to various conditions including execution of the Guarantee. Mr Trueman asked Mr Harvey to sign the Guarantee, and it was agreed that he would bring it to Mr Harvey's house so that he could sign it. Mr Harvey describes how Mr Trueman then brought only the signature page, which he put through the letter box. Mr Harvey signed it, and had his signature witnessed by his neighbour Alan Oates, who was the vicar who had conducted the service at his father's funeral.
  39. In his affidavit, Mr Harvey describes his state of mind at this time as follows:
  40. "21. As I was neither a director nor a shareholder of Vision, I did not believe that Dunbar would ever seek to enforce the Personal Guarantee against me. I believed that the only purpose of the Personal Guarantee was to obtain internal Dunbar credit approval.
    22. Knowing what I know now, and with the benefit of legal advice, I accept that I was naïve in accepting what I was told by Tony Cullen. However, it was my genuine belief at the time. By way of explanation, my decision to sign the Personal Guarantee was influenced by my father's death. Put strongly, I was not thinking straight."
  41. Mr Harvey was never issued any shares in Vision, and he says he never had any intention of becoming a shareholder, whatever Mr Cullen may have been told by Mr Trueman. In his second statement, he says:
  42. "As my involvement was strictly peripheral, I saw no need to become involved in the ongoing arrangements between Dunbar and Vision. They were none of my business."

    The first ground of appeal: abuse of process

  43. As Judge Kaye QC rightly recognised, this issue needs to be considered in the context of the statutory provisions contained in the Insolvency Act 1986 (as amended, "the 1986 Act") and the Insolvency Rules 1986 (as amended, "the Rules") which regulate the procedure for obtaining a bankruptcy order against an individual debtor. As the judge said, at [25]:
  44. "The broad scheme of the Act is to permit a bankruptcy order to be made on a creditor's petition in respect of a debt exceeding £750 which the debtor appears to be unable to pay or to have no reasonable prospect of being able to pay and there is no outstanding application to set aside a statutory demand in respect of the debt (s.267). A debtor is to be taken as unable to pay the debt if the creditor has served a statutory demand in the prescribed form and manner on the debtor and at least three weeks have elapsed since service and the demand has been neither complied with nor set aside in accordance with the Rules (see s.268 and Rules 6.1-6.3). Before a bankruptcy order can be made on the petition the court must still be satisfied the debt has not been paid nor secured or compounded for, or the creditor has unreasonably refused an offer to secure or compound for the debt (see s.271 and Rule 6.25)."
  45. The judge continued:
  46. "26. Any application to set aside a statutory demand must also be made in the prescribed manner and time and supported by evidence (Rule 6.4). Unless satisfied there is no sufficient cause for the statutory demand, the court must hear the application and consider the evidence available to it and may grant the application if (amongst other grounds) the debt is disputed [on grounds which appear to the court to be substantial] or if the court is satisfied on other grounds the demand ought to be set aside (Rule 6.5). There is a residual discretion in the court to decide at the hearing of the petition whether or not to make a bankruptcy order: Turner v Royal Bank of Scotland [2000] BPIR 683 CA at p. 694 per Chadwick LJ.
    27. Thus, even if the demand is not set aside the court still has to consider the evidence and decide whether or not a bankruptcy order ought to be made on the material before it: see, for example, Commissioners of Inland Revenue v Lee-Phipps [2003] BPIR 803. Where, however, the debtor raises the same arguments on the hearing of the petition that have already been run and failed or where the debtor has failed to raise previous arguments the court will enquire (in the latter case) as to the reasons. The court must still be satisfied the relevant conditions for making the bankruptcy order are satisfied: see, e.g. Commissioners of Inland Revenue v Lee-Phipps (above); Coulter v Chief Constable of Dorset Police (No. 2) [2006] BPIR 10 CA; Vaidya v Wijayawardhana [2010] BPIR 1016.
    28. Finally, it is also appropriate to refer to s.375(1) of the Act which empowers the court to "review, rescind or vary any order made by it in the exercise" of its jurisdiction under the Act."
  47. It will be apparent from this summary of the relevant legislation that there are a number of different stages in the procedure governing personal bankruptcy at which the debtor may in principle be entitled to raise a dispute about his alleged indebtedness to the creditor. The first opportunity is on an application to set aside the statutory demand, when the debtor needs to demonstrate "grounds which appear to the court to be substantial". It is common ground that the test which the court applies on such an application is in substance the same as the test applied on an application for summary judgment or to strike out a defence, namely whether the debtor has a defence to the claim (or has a cross-claim) which has at least a real (as opposed to fanciful) prospect of success. The second opportunity, if the statutory demand is not set aside and a petition is presented, is on the hearing of the petition itself, when the court must still be satisfied as to the existence of the debt, and retains a residual discretion whether or not to make a bankruptcy order. A third opportunity may arise if the debtor asks the court under section 375 of the 1986 Act to review, rescind or vary any order which it has made, including an order refusing to set aside a statutory demand or a bankruptcy order. Finally, the question could arise on an application to annul the bankruptcy order under section 282. It is therefore unsurprising that a considerable body of authority has developed in which the courts have considered how far it is open to a debtor to rely, at one of the later stages in the bankruptcy process, on an argument relating to his liability for the debt which he either ran unsuccessfully at the initial stage (i.e. on an application to set aside the statutory demand), or which he failed to run on such an application but upon which he later wishes to rely.
  48. The judge conducted a valuable review of this body of authority at [32] to [36] of his judgment. As he said in [34], "the arguments have been well trod in these previous decisions". He then set out the principles relevant to the present case which he derived from the authorities. The judge expressed the first and second of those principles as follows:
  49. "First, the court, on the hearing of a bankruptcy petition at least, has a duty to consider, on the material before it, whether the conditions for the making of a bankruptcy order are satisfied …
    Second, on such a hearing where there has been a previous hearing on the merits, whilst the court ought always to ask itself whether the arguments have been previously run and failed, and, why arguments now advanced have not been run before, absent a change of circumstances or some other special or good reasons or circumstances, the debtor can not go back on the hearing of the petition (or for that matter on an application to annul or review under s.375(1)) to re-argue or reiterate arguments presented earlier, or which he had an opportunity to present. The basis of this principle (which has been referred to in the recent cases as the Turner principle) is that to hold otherwise would be to encourage a waste of court time, a waste of the parties' money and defeat the obvious purpose of the statutory scheme which was that arguments on whether or not there was a genuine debt ought to be raised at the earliest stage i.e. on the application to set aside the statutory demand …"
  50. In my judgment these two principles are firmly based on the authorities, and helpfully summarise the approach which the court should adopt when on the hearing of a petition the debtor seeks to rely on arguments which he presented, or had an opportunity to present, at a previous hearing on the merits (usually on an application to set aside the statutory demand). The leading authority is the decision of this court in Turner v Royal Bank of Scotland, loc.cit. This was a case with a rather complex procedural history, in which the respondent bank sought to make the appellant debtor bankrupt on the basis of a summary judgment which it had obtained against him in 1992 for £8,277.78 plus interest. The proceedings based on the statutory demand included a re-hearing following a first appeal, and culminated in the dismissal of the debtor's application to set it aside. This refusal was upheld by the High Court on appeal, and the Court of Appeal subsequently refused the debtor permission for a second appeal. The bank then served a bankruptcy petition, upon which a bankruptcy order was made in the debtor's absence in June 1997. The petition proceedings then generated two further judgments, on an appeal from the bankruptcy order and a subsequent application for a stay, from which the debtor appealed to the Court of Appeal on the grounds that he had a cross-claim against the bank which equalled or exceeded the petition debt. The debtor's appeal was finally dismissed on 30 June 2000, nine and a half years after the bank had originally obtained summary judgment. The leading judgment was delivered by Chadwick LJ. Buxton LJ delivered a short concurring judgment, and the third member of the court, Aldous LJ, agreed with both judgments without adding to them.
  51. In his review of the authorities, Chadwick LJ at 688C endorsed as "a correct statement of position" the following observations of Vinelott J in Brillouett v Hachette Magazines Ltd, Re a Debtor (No. 27 of 1990) [1996] BPIR 518 at 520:
  52. "There may be rare cases in which it can be said that a debt claimed in a statutory demand against which there has been an unsuccessful attempt to set it aside and which has not been paid or secured or compounded for is not payable at the date of the petition, for instance, if as a result of legislation it were to be become unenforceable between those two dates. But unless there is some change of circumstance of that kind it seems to me that all that the petitioning creditor is required to do is to show that he has made a statutory demand, that either no attempt has been made to set it aside or an unsuccessful attempt has been made, and that the amount of the debt has neither been paid nor secured nor compounded for. The debtor cannot go back and reargue the very grounds on which he unsuccessfully sought to have the statutory demand set aside."
  53. Later in his judgment, Chadwick LJ set out the relevant provisions of the bankruptcy legislation and stated the following conclusions at 694A-D:
  54. "Rule 6.25 of the 1986 Rules provides that on the hearing of the petition, the court may make a bankruptcy order if satisfied that the statements in the petition are true and that the debt on which it is founded has not been paid or secured or compounded for. So the court is not bound to make a bankruptcy order; there is a residual discretion in the court to decide on the hearing of the petition whether or not to make the bankruptcy order. But it cannot have been intended, as it seems to me, that when exercising the discretion (which it undoubtedly has under r. 6.25), whether or not to make a bankruptcy order at the hearing of the petition, the court is required to revisit the arguments which have already been advanced on the hearing of the application to set aside the statutory demand; and which have already been rejected at that hearing. As Vinelott J pointed out in the Brillouett case, the debtor cannot go back and reargue the very grounds on which he unsuccessfully sought to have the statutory demand set aside. It will require some change of circumstance between the unsuccessful attempt to set aside the statutory demand and the hearing of the petition before the court (on the hearing of the petition) can be asked to go into the question which has already been determined at the hearing of the statutory demand. To hold otherwise would be to encourage a waste of court time, and a waste of the parties' money; and would defeat the obvious purpose of the statutory scheme."
  55. In the subsequent decision of this court in Coulter v Chief Constable of Dorset Police (No. 2) [2005] EWCA Civ 1113, [2006] BPIR 10, Chadwick LJ took the opportunity, at [19], to point out that estoppel and res judicata had not been canvassed before the court in Turner. Rather, the basis of his observations in Turner had been:
  56. "… that it would be a waste of court time and the parties' money to allow a debtor, who had already failed on his application to set aside a statutory demand, to advance the same arguments by way of challenge to the petition debt on the hearing of the petition."
  57. Chadwick LJ then said that the same point had been made by Neuberger J in Atherton v Ogunlende [2003] BPIR 21 at 27, where he said:
  58. "However, in general, it seems to me right in principle and in the public interest that, if a party has raised an argument in a proper forum, where it has been considered in connection with a particular process, in this case a bankruptcy or a prospective bankruptcy, and from which forum he had a right of appeal if he wished to exercise it, if that argument is rejected and he does not appeal, it requires exceptional circumstances before he can raise the same argument at a later stage during the same process. "

    Neuberger J went on to say (ibid.), that "the principle should not be abrogated simply because the party has found a better way of putting the same point, or wants to put in more evidence to support the same point".

  59. Returning to the present case, Judge Kaye QC expressed his agreement with the district judge that Mr Harvey's application to set aside SD2 was "simply an attempt to re-litigate the same point already decided between the parties", and should therefore not be permitted: see [38].
  60. The judge continued:
  61. "39. … I would add as Chadwick LJ has made clear in Turner and Coulter, and Neuberger J made clear in Atherton, whether the result is based strictly on res judicata, issue estoppel, or the Turner principle on a second hearing on the same point in the bankruptcy process, apart from the special circumstances attending the hearing of the bankruptcy petition itself referred to above, and absent good reason, special, new, changed or exceptional circumstances (or however it might be described) the result is the same: the public interest was to avoid repeat litigation on the same point and same or similar material. Even allowing for the potentially serious consequences of bankruptcy, it would be a waste of time and money and, I would also add, the court's resources and be inclined to delay access to the courts of other litigants … who had not even had a first opportunity to present their case. This cannot be in the public interest.
    40. Accordingly, even if the point is not governed by issue estoppel or res judicata in the true sense, in my judgment the Turner principle at least applies to the instant case. Absent a change of, or special circumstances the debtor ought not to be permitted to raise the point again."
  62. The judge then said at [41] that there were no special or exceptional circumstances to justify re-opening or re-arguing the promissory estoppel point. The so-called new evidence added nothing material to the case previously advanced; Mr Harvey had chosen on previous occasions, in seeking permission to appeal and on the appeals themselves, not to pursue the promissory estoppel point; and he was now seeking to re-argue it on substantially the same material and arguments as before.
  63. The judge recognised, however, at [43] that nothing he said could affect the powers of the court on the hearing of any subsequent bankruptcy petition against Mr Harvey. Whether the court would then permit him to raise the point again would be for the judge hearing the petition to decide, having regard to the principles set out in the authorities.
  64. On behalf of Mr Harvey, Mr Schmitz attacks the reasoning and conclusion of the judge on this issue on several grounds. His first argument is that the present case falls within none of the three categories of case mentioned by the judge in [39], quoted above. It is not a case of res judicata, because there is no extant previous judgment against Mr Harvey on the merits of the promissory estoppel point. SD1 was set aside by the Court of Appeal, and the judgment of the district judge on the application to set it aside cannot ground an estoppel between the parties once the statutory demand itself has gone. Nor is the case one of issue estoppel, because an adverse finding on one issue against a party who is ultimately successful on appeal will not found an estoppel. Reliance is placed on Spencer Bower and Handley, Res Judicata, 4th edition, paragraph 8.25, where the authors say:
  65. "The ultimate test is whether the determination is such that without it the judgment cannot stand. A decision of fact or law against the party who succeeded or one which was not necessary to the decision will not found an estoppel because it cannot be fundamental to the decision. It would be unjust for such a decision to create an estoppel because the person who failed on that issue cannot effectively appeal against it."

    Finally, the case is not covered by Turner because Mr Harvey is not seeking, on the hearing of a petition, to raise an issue on which he was unsuccessful on an application to set aside an extant statutory demand.

  66. In relation to this argument, I agree that the present case cannot be characterised as one of res judicata or issue estoppel, and I respectfully consider that the judges below were wrong to the extent that they held or suggested otherwise. The reason for this appears most clearly from a decision of this court to which Mr Schmitz drew our attention in a note supplied to us after the hearing, P & O Nedlloyd BD v Arab Metals Co (No. 2) [2006] EWCA Civ 1717, [2007] 1 WLR 2288. The leading judgment was delivered by Moore-Bick LJ, with whom Jonathan Parker and Buxton LJJ agreed. The relevant issue was whether a decision of the trial judge, Colman J, on a question of limitation on an application for summary judgment could give rise to an issue estoppel between the same parties in circumstances where the order of the court below had been set aside by the Court of Appeal on an unrelated ground. The answer given by this court was that it could not. As Moore-Bick LJ explained, at [29]:
  67. "As a matter of principle, when an appellate court sets aside the order of a lower court that order ceases to have any effect and the decision of the appellate court alone is determinative of the issue between the parties. That is sufficient to determine the present case. Although the decision of Colman J was originally capable of giving rise to an issue estoppel, it could no longer do so once it had been set aside on appeal, regardless of the grounds on which this court made its order. Issue estoppel is a form of estoppel by record and depends, as the cases mentioned earlier demonstrate, on a decision of the court disposing of a substantive dispute between the parties. On a purely formal level it may be said that the setting aside of the order below expunges the only record from which an estoppel was capable of deriving its source. At a substantive level the setting aside of the order means that there is no longer any disposal to which the decision on the issue in question can be regarded as fundamental."
  68. It does not follow from this, however, that the setting aside of SD1 had the consequence that the judgment of the district judge on the promissory estoppel point disappeared into some kind of legal black hole and thereafter had to be disregarded for all purposes. True, the judgment could no longer give rise to an issue estoppel, but I can see no reason in principle why the judgment should no longer be capable of being taken into account when deciding whether it is an abuse of process for Mr Harvey to re-litigate the same question in the context of the bankruptcy proceedings against him founded on the same debt. As Chadwick LJ was at pains to point out in Coulter, the principle in Turner's case is not based on any form of estoppel, but rather on the principles that (i) "it is indeed a waste of the court's time and the parties' money to rehearse arguments which have already been run and have failed", and (ii) in circumstances where the debtor wishes to run new arguments, "the court will enquire why those arguments were not run at the time when they could, and should, have been run": see Coulter at [22], in addition to the passages from the judgment quoted above.
  69. Contrary to the argument advanced by Mr Schmitz, I would not confine the operation of these salutary principles to cases where a debtor seeks on the hearing of a petition to resurrect, or add to, arguments which he ran on a previous application to set aside the statutory demand. It seems to me that the principles are capable of general application throughout the various stages of the bankruptcy process which I have described, because the considerations of public policy on which the principles are founded are likely to apply with equal force at whatever later stage in the process the question arises. In particular, there is in my judgment every reason why the Turner principle should apply in the circumstances of the present case, where Mr Harvey is not only seeking to rely on the same arguments as before, but he chose on three separate occasions not to pursue a possible appeal against the original decision of the district judge.
  70. The first of those occasions, as I have already noted, was when the district judge handed down his first judgment and no permission to appeal was sought from him on the promissory estoppel point: see [7] above. The second occasion was when counsel instructed on the first appeal to Judge Kaye QC (not Mr Schmitz) confined the appeal to the only issue on which the district judge had granted permission, namely the Southgate-Sands issue, and did not attempt to obtain permission from the High Court to pursue the further grounds of appeal which Mr Schmitz had settled. The third occasion came after Mr Schmitz had attempted to resurrect the promissory estoppel point when seeking permission for a second appeal from this court, albeit recognising that the promissory estoppel point could only hope to succeed if the court were minded to grant permission in respect of the Southgate-Sands point which alone raised an important of principle or practice. In refusing permission to appeal on paper on 12 December 2012, Lloyd LJ said that:
  71. "The estoppel point would not, in my view, even justify a first appeal."

    At the renewed oral hearing for permission to appeal before Kitchin LJ on 1 March 2013, Mr Harvey was again represented by Mr Schmitz, and the estoppel argument was expressly abandoned, both on paper and in counsel's oral submissions.

  72. Mr Schmitz advanced further submissions to us based on the well-known statements of principle by Lord Bingham of Cornhill concerning Henderson v Henderson abuse of process in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31, and on the further principle that it will often be difficult or impossible to ground an estoppel on a ruling made by the court on an interlocutory matter: see Mullen v Conoco Ltd [1998] QB 382 (CA) at 390-391 per Evans LJ. I find it unnecessary to deal with these submissions, however, because the Turner principle is peculiar to the law of bankruptcy, and as Chadwick LJ said in Coulter at [22] "the principle is not based on estoppel whether of a Henderson v Henderson (1843) 3 Hare 100 nature or res judicata". Further, even if it were relevant to have regard, by way of analogy, to the learning on Henderson v Henderson abuse of process, I would certainly not agree with Mr Schmitz that the doctrine is confined to cases of "unjust harassment of a party". Although Lord Bingham used these words, and said that there will "rarely be a finding of abuse" in the absence of such harassment, he went on to state explicitly that application of the doctrine requires "a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case" (Johnson v Gore Wood at 31 C-D). I also find the supposed analogy with interlocutory proceedings unhelpful; when the clear and consistent thrust of the bankruptcy authorities is that the appropriate occasion for a debtor to put forward his case that a debt is disputed is on the application to set aside the statutory demand.
  73. Mr Schmitz had a further argument, at first sight more promising, based on the passage from Spencer Bower which I have already quoted. The argument runs as follows. If Mr Harvey had fought the promissory estoppel issue in the Court of Appeal in 2013 and lost, he would be under no disability in the current proceedings because, having won the earlier appeal on other grounds, he could not have appealed further in that case on the promissory estoppel issue. For that reason, the decision on promissory estoppel would not have been final, either for the purposes of issue estoppel or for the purposes of abuse of process. That being so, it would be anomalous if Mr Harvey should be in a worse position, not having fought the issue on appeal in 2013, than he would be in if he had fought the issue and lost.
  74. The fundamental problem with this argument, in my judgment, is that Mr Harvey deliberately decided not to pursue the promissory estoppel point in the Court of Appeal. There may have been a number of possible reasons for this decision. He, or his advisers, may have thought that the point lacked merit; or that it risked detracting attention from the appeal on the Southgate-Sands point; or simply that it could not properly be pursued when the district judge had never granted permission for an appeal on it. Whatever the reason may have been, I do not find it helpful to compare the position which Mr Harvey, by his own choice, brought about with a hypothetical position based on the assumption that he had been granted permission to appeal on the promissory estoppel point and then lost.
  75. Furthermore, I also agree with the submission for the Bank that, even in those hypothetical circumstances, there would be no anomaly. The reason why no issue estoppel normally arises against a party who has succeeded on appeal in respect of an issue argued on the appeal on which he lost is the possibility that injustice could arise if he were bound by an issue estoppel in respect of a determination against which he could not appeal because of his overall success. As the authors of Spencer Bower and Handley say, "It would be unjust for such a decision to create an estoppel because the person who failed on that issue cannot effectively appeal against it", citing observations in Concha v Concha (1886) 11 App. Cas. 541 at 552 and 567 per Lord Herschell LC and Lord Bramwell respectively. But that is the very opposite of Mr Harvey's case, because he deliberately decided not to pursue an appeal on the promissory estoppel point beyond its determination at first instance.
  76. Finally, Mr Schmitz argued that, even if the Turner principle were engaged, there was a material change of circumstances when Mr Harvey applied to set aside SD2 because of the new evidence which he adduced in support of the application. Mr Schmitz took issue with the views of the district judge, and Judge Kaye QC, that the new evidence was merely more evidence of the same type as had been before the court on the first hearing, and added nothing material. Mr Schmitz submitted that the courts below should have taken account of the fact that the new evidence showed the existence of a widespread practice within the Bank whereby relationship managers encouraged potential guarantors to believe, contrary to the wording of the guarantees, that no liabilities were actually to be imposed on them. He says that the new material was of probative value because it tended to prove that the Bank, or at least the marketing arm of the Bank, intended Mr Harvey to interpret the words spoken to him by Mr Cullen in the manner for which he contends, and that he was entitled to treat the words as having that meaning if they were in any respect ambiguous. He further submits that the court will be unable properly to evaluate the force or credibility of the new evidence before disclosure has taken place in the context of an action between Mr Harvey and the Bank.
  77. In my view there is nothing in this argument. All of the new evidence relates to transactions between the Bank and third parties. None of it relates to the conversation which actually took place between Mr Cullen and Mr Harvey. The alleged existence of a settled practice involving other people cannot help the court in interpreting the words which were actually spoken by Mr Cullen to Mr Harvey during their telephone conversation. At most, the existence of a settled practice, if established at trial, might damage Mr Cullen's credibility and support Mr Harvey's version of what was said to him. But this possibility does not assist in the present context, because the courts below have rightly assumed in Mr Harvey's favour that his evidence of what happened is to be accepted at face value. For the same reason, the argument based on possible future disclosure of relevant documents by the Bank cannot advance Mr Harvey's case.
  78. I therefore think the judge was clearly right to hold, at [41], that there were no special or exceptional circumstances to justify re-opening or re-arguing the promissory estoppel point. It follows that there is nothing to displace the prima facie application of the Turner principle, and it would be an abuse of the bankruptcy court's practice if Mr Harvey were to be permitted to re-argue the promissory estoppel point on the same grounds as before.
  79. I would accordingly dismiss the first ground of appeal.
  80. The second ground of appeal: the promissory estoppel point

  81. If the other members of the court agree with my conclusion on the first ground of appeal, it is not strictly necessary to deal with the merits of the promissory estoppel point. Since it was fully argued before us, however, I will express my views on it, although more briefly than I would if it were necessary to my decision to do so.
  82. At the outset, the argument seems to me to face a formidable difficulty of law. The doctrine of promissory estoppel, normally at any rate, presupposes the existence of a legal relationship between the parties, in the context of which the promise or assurance which gives rise to the estoppel is made. Thus, for example, the following general formulation of the requirements of promissory estoppel appears in Snell's Equity, 33rd edition, at paragraph 12-018:
  83. "Where, by his words or conduct one party to a transaction, (A) freely makes to the other (B) a clear and unequivocal promise or assurance that he or she will not enforce his or her strict legal rights, and that promise or assurance is intended to affect the legal relations between them (whether contractual or otherwise) or was reasonably understood by B to have that effect, and, before it is withdrawn, B acts upon it, altering his or her position so that it would be inequitable to permit the first party to withdraw the promise, the party making the promise or assurance will not be permitted to act inconsistently with it. B must also show that the promise was intended to be binding in the sense that (judged on an objective basis) it was intended to affect the legal relationships between the parties and A either knew or could have reasonably foreseen that B would act on it. Yet B's conduct need not derive its origins solely from A's encouragement or representation. The principal issue is whether A's representation had a sufficiently material influence on B's conduct to make it inequitable for A to depart from it."
  84. The above formulation clearly envisages the prior existence of a legal relationship between the parties, the terms of which are then modified by the making of a clear and unequivocal promise or assurance by one party upon which the other party then acts by altering his position in some material respect. In paragraph 12-026, the point is then made explicitly:
  85. "In Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776, at [5], Lord Walker stated that promissory estoppel "must be based on an existing legal relationship (usually a contract, but not necessarily a contract relating to land)". As promissory estoppel governs rights that A might otherwise be able to assert against B, it can operate only where the parties are in a position such that A has, or would but for the imposition of promissory estoppel have acquired, a right against B."
  86. It is true that the editors go on to submit, later in the same paragraph, that the "better view … is that there is no independent requirement of a legal relationship as such; there is simply the inherent limit that promissory estoppel may only affect a right that A would otherwise have against B". Nevertheless, it seems clear to me that the weight of existing authority supports the view that a promissory estoppel can only arise in the context of an existing legal relationship, as Lord Walker said in Thorner v Major. If that is correct, it follows that there could be no scope for operation of the doctrine in the present case, because there was no existing legal relationship between Mr Harvey and the Bank when his conversation with Mr Cullen took place. On the contrary, the purpose of the conversation, on Mr Harvey's case, was to induce him to enter into a legal relationship with the Bank in the form of the Guarantee. In those circumstances, Mr Harvey might have had a remedy in misrepresentation, or might have succeeded in an action to have the Guarantee set aside, but it is difficult to see consistently with legal principle how he could argue that the express terms of the Guarantee never applied to him at all once he had signed it. Further support for this view may be found in the generally accepted principles (albeit subject to limited exceptions) that a promissory estoppel is normally only suspensory in its operation, and that it cannot alone confer positive rights on the promisee (often expressed by saying that the doctrine operates as a shield and not as a sword): see generally Snell at paragraphs 12-030 and 12-031.
  87. Since it is unnecessary for us to do so, I prefer to express no concluded view on this question. If it were the only obstacle in Mr Harvey's path, the better course would probably be to allow his dispute with the Bank to go to trial, so that the question of law could, if necessary, be addressed in the context of full findings of fact. I therefore turn to the next question, which is whether Mr Harvey can show that he has a case on the facts which is fit to go to trial.
  88. This question has already been carefully considered, and decided adversely to Mr Harvey, twice by the district judge and once by Judge Kaye QC. I will say at once that the courts below were in my judgment correct to conclude as they did. I cannot see any reasonable prospect of Mr Harvey's defence succeeding at trial.
  89. The basic problem which confronts Mr Harvey is the inherent implausibility of his case. As an experienced and hard headed man of business, how could he possibly have supposed that the Bank was inviting him to execute a guarantee which would never be enforced against him? And even if Mr Cullen used language which, taken literally, might have conveyed such a suggestion, how could Mr Harvey possibly have taken it seriously? He knew that the Bank was not prepared to lend to Vision without a guarantee, and he knew that his participation was required precisely because he was a man of substance. The terms of the Guarantee were of a standard nature, and Mr Harvey nowhere suggests that he was unable to understand them. It is simply not credible that he proceeded to execute the Guarantee on the footing that he was engaging in a solemn farce, and that it would never in any circumstances be enforced against him.
  90. The position might conceivably be different if Mr Harvey were an unworldly philanthropist, but he has expressly disavowed family ties or friendship as motivating factors (see [13] above), and any such suggestion would be frankly incredible coming from a man of Mr Harvey's background and experience. I am certainly prepared to accept that, in the aftermath of his father's death, which affected him greatly, he may have been less cautious than he would normally have been, and more inclined to assume that the Bank would probably never enforce its strict legal rights under the Guarantee against him. While this may help to explain why he agreed to become a guarantor in the first place, it is not the main basis upon which Mr Harvey grounds his defence; and although it is not clear exactly when Mr Harvey signed the Guarantee, it seems to have been a significant time after his father's death. On his own evidence, there were "numerous delays" as a result of the Bank's credit department moving its office and documents getting lost in the post; and the Guarantee was not finally dated until 10 March 2008, some two and a half months after his father's death on 29 December 2007.
  91. For these short reasons, I am wholly unpersuaded that Mr Harvey's case would have any realistic prospect of success on the merits, even if he were to be permitted to run it on his application to set aside SD2. I would therefore dismiss the second ground of appeal.
  92. The third proposed ground of appeal: was Mr Harvey a "consumer" under EU law?

  93. The third proposed ground of appeal is one which Mr Harvey needs the permission of this court to advance. As I have said, it is based on the decision of the ECJ in the case of Tarcau: see [20] above. In that case, the ECJ held, apparently for the first time, that Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts ("the 1993 Directive") can apply to a contract of guarantee, or a contract providing security, concluded between a natural person and a credit institution in order to secure contractual obligations owed by a commercial company to the lender, where the natural person acted "for purposes outside his trade, business or profession and has no link of a functional nature with that company": see Tarcau at paragraphs 22 to 30 of the reasoned order of the court, and in particular paragraph 30 and the dispositif which contain the wording which I have quoted.
  94. Although the ECJ dealt with the case by means of a reasoned order, which normally implies that it was not perceived to involve any new principles of law, Mr Schmitz tells us that the 1993 Directive and similar directives had previously been held to be inapplicable save where both the guarantor and the principal debtor were natural persons, and where both the guarantor and the principal debtor were acting outside their trade, business or profession. This approach, he says, was followed in England in cases relating to the Unfair Terms in Consumer Contracts Regulations 1994 and 1999, which are based upon the 1993 Directive: see, for example, Barclays Bank v Kufner [2008] EWHC 2319 (Comm), [2009] 1 All ER (Comm) 1, at [24] to [28] per Field J. I am prepared to assume, without deciding, that this submission is well-founded, and that the relevant Regulations should be held (whether by a process of conforming construction, or disapplication) to apply to a case where an individual guarantees the debt of a company, provided that the individual is not connected to the company and has been acting for purposes outside his business, trade or profession. Making that assumption, the question then arises whether Mr Harvey could plausibly be regarded as a "consumer" in relation to the Guarantee by application of this test.
  95. It is at this point, as it seems to me, that the argument clearly becomes untenable. The proposition that Mr Harvey was not connected to Vision would be very difficult to maintain, bearing in mind that he had provided the initial funding of £40,000 in return for a share in the profits of the development. It may be true that Mr Harvey's involvement then terminated when the £40,000 was repaid, but a connection with the company had already been established. Even if that is wrong, however, it seems to me clear beyond reasonable argument that Mr Harvey was in some way acting in the course of his business when he agreed to become a party to the Guarantee. As I have already explained, he was a man with extensive business interests and experience, including in the field of property development. Furthermore, he has expressly disclaimed any motives of friendship or family ties as being the reason for his participation. The conclusion that he was acting in a business capacity seems to me irresistible, nor is it dispelled by assurances which Mr Schmitz gave us on instructions during the hearing, and which were subsequently verified by a witness statement provided by Mr Harvey, to the effect that neither Vision nor anyone associated with that company had provided or promised to provide him with any payment or other benefit or any consideration at all in return for the guarantee. Assuming that to be so, it still does not meet the point that Mr Harvey must have expected some kind of business benefit, however intangible, to accrue to him from his agreement to sign the Guarantee.
  96. Furthermore, even if this obstacle could somehow be overcome, Mr Schmitz was unable to point to any specific provision of the Regulations which could plausibly afford Mr Harvey relief as a consumer. He suggested that certain terms of the Guarantee were not expressed in "plain and intelligible language" for the purposes of Regulation 7 of the 1999 Regulations, but this contention is impossible to reconcile with paragraph 23 of his skeleton argument where he states that Mr Harvey's case "is not that he did not understand the transaction".
  97. For these reasons, I conclude that the proposed third ground of appeal would offer no reasonable prospect of success on the facts, even if the legal points which it raises were to be determined in Mr Harvey's favour. I would therefore refuse Mr Harvey permission to rely on this additional ground.
  98. Conclusion

  99. It follows that I would dismiss Mr Harvey's appeal.
  100. Sir Stephen Tomlinson:

  101. I entirely agree. So far as concerns the second ground of appeal and the proposed third ground, Henderson LJ has used moderate but compelling language to explain the failure of the proffered defences, which many might have dismissed as simply absurd. The vacuity of the alleged promissory estoppel argument serves well to emphasise the need for salutary principle adopted in the bankruptcy jurisdiction.
  102. Lord Justice Gross:

  103. I agree with both judgments.

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