Rich v JDDR Capital: bare assertions and vague representations fall short in guarantee dispute

The High Court has dismissed both an application to set aside a statutory demand and the grounds of opposition to a bankruptcy petition in Joanna Rich v JDDR Capital Limited [2026] EWHC 853 (Ch), confirming that bare, unparticularised assertions — however framed — will not meet the threshold of a debt disputed on substantial grounds.

In June 2023, LawBit Limited — a legal services business directed by Clive and Joanna Rich — entered into a loan agreement with Muskoka Estates Limited for £500,000, repayable by 1 January 2024. Mr and Mrs Rich executed personal guarantees as a condition precedent to that agreement. Spencer West solicitors certified that independent legal advice had been provided before execution.

LawBit entered administration in September 2024 without having repaid either the principal or any accrued interest. By that point, Muskoka had assigned its rights under the agreement and the guarantee to JDDR Capital Limited, which then served fresh statutory demands totalling £920,000 — comprising the principal, monthly interest at £30,000 (rising to £45,000 after April 2024), and default interest.

The disputed debt issue

Both Mr and Mrs Rich resisted enforcement on several grounds. Their primary contention was that an "understanding" had existed at the time of the loan — attributed loosely to Muskoka's director, Mr David Russell — that the £500,000 would be converted into equity once anticipated external funding arrived, rather than being repaid in cash. A call option agreement, under which Mr Russell could acquire shares in LawBit after loan repayment, was said to be the intended vehicle for that conversion. Non-binding term sheets from prospective funders were also relied upon.

Alongside this, the Riches raised promissory estoppel, estoppel by acquiescence, estoppel by convention, and waiver, all predicated on Mr Russell's alleged silence and supportive conduct over the nine months before the first statutory demand was issued in May 2024. A further submission invoked the unfair relationship provisions of section 140A of the Consumer Credit Act 1974, and a penalty clause argument targeting the interest provisions.

The court's analysis

ICC Judge Agnello KC, applying the test in CFL Finance Ltd v Laser Trust [2021] EWCA Civ 228 and Collier v P & MJ Wright (Holdings) Ltd [2008] 1 WLR 643, found that none of the grounds cleared the necessary threshold.

The understanding and representation arguments were characterised as no more than bare assertions, lacking any contemporaneous documentary support. The call option agreement, properly construed, contradicted rather than corroborated the Riches' position — it was expressly conditional on repayment of the loan, not convertible in lieu of it. The non-binding term sheets provided no basis for the alleged obligation to convert. Critically, the October and December 2023 email exchanges showed Mr Rich acknowledging the debt as outstanding without any reference to the supposed understanding.

The estoppel and waiver arguments fared no better. The judge found that a creditor's willingness to await payment, without more, does not constitute a representation capable of founding an estoppel. The evidence failed to address the distinction between Mr Russell personally and Muskoka as the contracting counterparty.

On the Consumer Credit Act point, the court observed that section 140A was not straightforwardly applicable to a commercial loan obtained by company directors, and in any event the outstanding principal of £500,000 remained due regardless of any challenge to the interest provisions. The penalty clause argument was similarly disposed of on the same basis.

A late submission — raised in reply — that clause 2.2 of the guarantee created only an indemnity sounding in damages rather than a liquidated debt was ultimately unnecessary to resolve, given that clause 2.1 independently constituted a clear conditional payment obligation. The court was satisfied that the creditor had made the requisite demand and that LawBit's failure to pay engaged that clause directly.

The application to set aside the statutory demand was dismissed. The grounds of opposition to the bankruptcy petition were likewise dismissed, with the court reserving the position on the earlier Kingston County Court petition pending further submissions.