PROVING THINGS 204: WHY FIRST-HAND EVIDENCE IS IMPORTANT: “THE FIRST HAND EVIDENCE… IS TO BE PREFERRED OVER THOSE WHO GAVE EVIDENCE FOR THE BANK”

In  Lynch v Cadwallader & Anor [2021] EWHC 328 (Ch) Chief Insolvency Court Judge Briggs considered the Gestmin principles in a case where a bank failed to establish that a client had signed a guarantee. It is a good example of the problems called when a party (particularly a party that bears the burden of proof) does not call first-hand evidence.

 

“The first-hand evidence of Mr Lynch and Miss Hughes is to be preferred over those called to give evidence for the Bank. The key personnel at the Bank who are said to have dealt with the formalities and documentation for the financial facility advanced to Ruskin, did not give evidence”

THE CASE

The claimant applied to appeal an admission of debt by a trustee in bankruptcy. The bank claimed in the bankruptcy under the terms of a personal guarantee.  The claimant’s case was that he had not signed any guarantee.

THE JUDGMENT

The judge had to consider the first-hand evidence of the claimant and another witness, compared to the second-hand evidence called by the bank.  The bank’s witnesses could give no clear first-hand evidence. The judge considered the evidence of the claimant (“Mr Lynch”)

23. His evidence was that he was willing to provide a limited guarantee but he would not have provided, under any circumstance, an unlimited personal guarantee. His oral evidence was that he would not have accepted an offer of finance from the Bank if it required and insisted on an unlimited guarantee. He thought that the industry standard was to ask for a personal guarantee to be limited to between 10%-15% of the loan facility. This would equate to the limited guarantee he had provided to RBSIF. Although Mr Mills for the Bank made clear that he had a different experience of the industry standard, he was in no position to give evidence himself. Accordingly no evidence was called to contradict Mr Lynch’s assertion.
    1. An internal document, not sent to Mr Lynch, proposes an unlimited guarantee and indemnity. Mr Lynch was required to give details of his assets and liabilities. Mr Clark did not give evidence at trial.
    1. A recommendation discussion took place between Mr Dartford, Mr Clark and Simon Adcock (Regional Sales Director) of the Bank. That led to a request for a reference from RBSIF in mid-August 2011. A reference was provided by RBSIF on 16 August 2011 and soon after the Bank made an offer letter which was issued on 2 September 2011. The position of the Bank is that all the necessary documentation in respect of the finance offer was produced on this date: in other words, the Bank had printed a standard form personal guarantee ready for Mr Lynch’s signature on this date. The evidence of how this printed guarantee was produced to Mr Lynch is confused. The evidence that it was printed is that an e-mail of the same date from Mr Broomhead (compliance manager) of the Bank to Caroline Jameson asks her to “raise docs for single signatory”. Mr Broomhead had said that the personal guarantee was subsequently sent by post to Mr Lynch. He changed his mind stating that the Bank does not send personal guarantees by post and that:

“Their standard practice is for a member of the sales team (who is dealing with the transaction in question) to attend on the borrower company and proposed guarantor to go through the contents of the documents in person and then leave the documents with the borrower company/proposed guarantor to enable them to consider any of the documents and further and/or take independent legal advice if necessary.”

    1. He has no first-hand knowledge of what happened but understands that Simon Adcock took the Guarantee to the offices of Ruskin on 12 September and Ms Court collected them on 15 September 2011. The basis of his understanding is unclear. The evidence of Mrs Morgan (nee Court) in her statement summary is that “the guarantees would be sent by post to the home address. Copies may have been emailed to the client for information.” In his written evidence Mr Adcock recalled that the offer letter was signed on 2 September 2011, that he printed the Guarantee and recalled taking it to Mr Lynch on 12 September 2011, along with other documentation. Unsurprisingly he was tested on his memory by Mr Knight. He acknowledged that he was wrong about the offer letter. It was not signed on 2 September 2011. He acknowledged that he did not print the documents and accepted that he could not say that he took the Guarantee to Ruskin. He went as far as acknowledging that the Bank may have made a mistake in not sending the Guarantee. I remind myself that Ms Court’s evidence is an unsworn witness summary and she did not attend court.
    1. The overall picture therefore is that the Bank did not know if the Guarantee was posted, e-mailed or personally taken to Mr Lynch. It could provide no evidence of it being e-mailed. Mr Adcock could not recall taking it and there is no evidence it was posted. This is to be weighed against the evidence of Mr Lynch, who said that he never saw or signed the Guarantee.
    1. In any event Mr Lynch arranged to meet with Mr Bramwell on 5 September 2011. Mr Bramwell could not remember, unsurprisingly, the conversation although in his witness statement he purported to remember certain phrases. He accepts that he cannot recall discussing the detail of the offer letter at the meeting. He was not aware that Mr Lynch had reverted to Inspiration or the Bank asking for some changes. Nevertheless he recalled that a meeting with associates of Mr Bramwell (Mr Goodrich and Mr Bultitude) would take place on 8 September at the offices of Ruskin. Neither Mr Goodrich nor Mr Bultitude have provided witness evidence at trial.
    1. Mr Bramwell gave evidence that upon receiving the revised offer from the Bank, Mr Lynch raised a few queries relating to how the finance would assist Ruskin. He did not raise any issue about entering into a guarantee. His written evidence about the meeting on 8 September 2011 is that they conducted a line-by-line review of the revised offer. He says that three substantive issues arose namely, the requirement for Robust to provide a guarantee; the nature of the loan made by Inspiration to Mr Lynch and the Guarantee:

“With regards his personal guarantee, Mr Lynch noted that the guarantee was unlimited, unlike the RBSIF guarantee. Trevor Dartford explained that we were not in a position to negotiate this point as Aldermore would not move on it. Trevor had extensive experience of dealing with Aldermore. I pointed out that, as Ruskin had so much debtor cover for the facility, it was unlikely that the guarantee would be called on. Little more was said about the personal guarantee, as it was clearly not negotiable, and Ruskin had very little room for manoeuvre as Aldermore was the only company prepared to offer facilities to Ruskin within an acceptable timeframe. Mr Lynch subsequently made some manuscript amendments to the Offer Letter to reflect his areas of concern and then signed it, with David Bultitude attesting his signature.”

    1. There is no doubt that the offer letter included a number of “preliminary conditions” which included “you will deliver to us dated and signed by Roderick John Lynch a guarantee and indemnity in our standard format.”
    1. As a matter of note, Mr Bramwell’s evidence is that he had informed the Bank prior to 2 September 2011, that he should not be required to or “would not” provide a deed of subordination: it had been requested on the mistaken assumption that Inspiration had lent money directly to Ruskin. It was nevertheless contained in the offer letter. His evidence is that he had informed the Bank that it should be taken out as a requirement, as it was based on a false premise. He repeated the request at the meeting on 8 September 2011. The Bank did not seem to get the message. On 14 September 2011, Ms Court provided a list of outstanding conditions which included the provision of an asset and liability statement for Mr Lynch, a signed deed of subordination from Mr Bramwell and “signed by Roderick John Lynch a guarantee and indemnity in our standard format, Tracey [Ms Court] to pick up tomorrow.” In oral evidence Mr Bramwell commented: “Mr. Dartford was clearly in error.” It was not the only time the Bank was in error.
    1. Mr Bramwell’s evidence was tested. First his recollection of events were not as straightforward as might appear. He made a mistake in reading “standard format” as the same as “unlimited”. As set out above there was no mention of an unlimited guarantee. The wording in the offer letter and on the Bank’s internal documents was “standard format”. Secondly he assumed that the Bank would be seeking an unlimited guarantee. His assumption was based on a) his experience and b) the wording “standard format”. As regards his experience, he had no experience of dealings with the Bank and cannot be said to have an industry-wide experience: he gave no such evidence. Thirdly his assumption was based on the absence of a document stating that it would be limited “in the absence of the offer letter limiting the guarantee, it would have to be assumed that Mr. Lynch was expected to sign an unlimited guarantee.” It seems to me that the more onerous a personal guarantee the more likely it is that a respectable functioning bank would set out, in clear and easy-to-understand terms, the guarantor’s liability. This is particularly so, if a guarantee is unlimited. Mr Bramwell thought the opposite, and referring to the terms of a personal guarantee he said:

“But as far as I was concerned, any requirement for a guarantee which does not state in the body of the text a specific limit is, I would suggest by definition, an unlimited guarantee. “

    1. Mr Bramwell did not, at any time, see “the body of the text”. He did not see the Guarantee. There is evidence that the Bank did label their guarantees. At least one e-mail included an attachment named “Corporate Guarantee Unlimited.docx”. No e-mail has been produced by the Bank that attached a personal guarantee. I infer from this evidence that the Bank (a) had more than one type of guarantee; (b) by using the noun “corporate” in the title to the attachment, there is likely to be a “personal” guarantee and (c) the use of the adjective “unlimited” makes it equally likely that the Bank had a standard format guarantee that was “limited”.
    1. On 12 September 2011 Mr Adcock attended the offices of Ruskin. There is no doubt that he took a suite of documents with him. It has been argued that he took the Guarantee and a cover letter addressed to Mr Lynch recommending he take independent legal advice, asking him to sign the Guarantee and return it “to the above address”. The letter is not signed and carries no header with the address. There may be many explanations for the lack of a signature or header on the letter. It cannot be disregarded that a strong possibility is that it was never sent or taken to Ruskin’s offices on 12 September. It is curious that the Bank’s case rests on Ms Court collecting the Guarantee on 15 September and that Mr Lynch at no time queried the requirement to enter a personal guarantee. The collection of the Guarantee is contrary to the directions provided in the letter. If Mr Lynch did not see or receive a guarantee or the letter, he could not have questioned its terms. The Bank’s case is inconsistent in this regard.
    1. On Wednesday 14 September 2011, Mr Adcock e-mailed Miss Hughes to say that subject to the pre-conditions being met “we shall transfer you from RBS on Friday”. There followed a flurry of activity. He subsequently e-mailed Mr Broomhead “can you let Trevor [Mr Dartford] and I know asap of any outstanding pre-con’s (sic) please.” Miss Hughes responded to Mr Adcock “can you let me know what I need to give Tracey [Court] and Howard tomorrow.” Ms Court responded direct to Miss Hughes with a list which included (i) the Guarantee (ii) the asset and liability statement of Mr Lynch (iii) the deed of subordination to be provided by Mr Bramwell and (iv) other matters mostly pertaining to Ruskin’s liabilities. It is clear from the oral evidence of Miss Hughes and the terms of the e-mail exchange that Miss Hughes did not speak with Ms Court prior to her sending the list of outstanding matters at 13:14 on 14 September 2011. By referencing the requirement for Mr Bramwell to provide a deed of subordination so close to completion it may be inferred that the list could have been copied from an earlier document, was not checked against information already provided or that the Bank had an internal breakdown of communication. Miss Hughes thought that many of the outstanding matters had already been supplied and asked for some clarification from Mr Dartford. Mr Dartford e-mailed Ms Court “so here are the answers” which related to certain licences or accreditations. In the middle of the afternoon, Ms Court e-mailed Mr Lynch directly, asking for identification documents. He responded promptly “no problem”. She did not mention the Guarantee. As a result of the document mentioning items that had either already been supplied or were no longer required, its content cannot be relied upon as wholly accurate.
    1. On Thursday 15 September 2011, Ms Court and Mr Atkinson attended the offices of Ruskin to “conduct a debt verification” exercise and collect the outstanding documentation. The Bank has not provided any evidence from Mr Atkinson who was the senior client manager and responsible for “taking on” Ruskin as a client. It appears that the statement of personal assets and liabilities signed on 15 September 2011 was faxed on Friday 16 September 2011 and not collected on the Thursday. Mr Atkinson wrote to Mr Clark, Mr Broomhead and Mr Adcock at 11:19 by e-mail on 16 September 2011:

“Following Tracy and myself doing a pre-take on meeting with Ruskin Private Hire yesterday within our understanding of Ruskin, an investor called Mr Nigel Bramwell had already invested £100,000 loan and was looking at increasing this to £400,000…contrary to our understanding, Mr Bramwell has not invested the £100,000 and is not looking to invest any money directly…please can you advise if this point can be removed from the contract?”

    1. The e-mail demonstrates that only at the twelfth hour had the Bank acted on the information Mr Bramwell provided weeks before. As the Bank wanted priority over any other lending, Mr Lynch provided a deed of subordination and not Mr Bramwell, since it was Mr Lynch who had injected capital into Ruskin.
    1. Completion and the start of the facility began on 19 September 2011. An internal Bank note “Deal Outline” undated but likely to have been produced after 16 September 2011 (it refers to visiting the Ruskin premises on that date), forms part of the hearing bundle. Its provenance is unknown. It includes the following:

“Security 1st ranked debenture

Unlimited personal guarantee Roderick John Lynch- low worth!

Corp guarantee Robust Training Ltd- dormant

£200k loan postponement from”

    1. No one from the Bank was able to speak to the document. Mr Lynch and Miss Hughes did not know of its existence.
    1. The Bank produced a “Take-On Checklist” where the proposed client manager is named as Mr Atkinson. Ms Court signed the “sanction”, dated it 14 September 2011 and signed that she had checked the documents. Under a heading “Documentation- preparation, distribution & completion” it states that the Guarantee was “sent out” on 12 September 2011. The letter “y” signifying “yes” in boxes for “signed by individual”, “properly witnessed” and “dated”. The document records that the Guarantee was sent directly to Mr Lynch by recorded delivery on 19 September 2011. Mr Broomhead was said to provide “D” Level sign off. His name has been entered in manuscript but he has not signed the document. Similarly his name is entered in manuscript under the heading “C3 settings checked by” but he did not sign the document. In a later file note produced and signed by Mr Broomhead on 30 January 2012 he says:

“During a review of our documentation it was found that our Take On Checklist had not been signed. I have been asked to sign this. However I was not involved in the first prepayment for this client and therefore feel unable to sign off the Take On Checklist.”

    1. In his oral evidence Mr Broomhead readily accepted that he had no knowledge of what if any documents were taken to the Ruskin premises on 12 September 2011 or what if any documents were collected on 15 September 2011. He gives no evidence to support the statement in the note that it was “sent out” on 12 September, “signed by individual” or “properly witnessed” and “dated”.
    1. By an e-mail dated 10 February 2012, Mr Atkinson wrote to Mr Clark:

“I must confess that a file note was not completed until now due to seeking further different viewpoints within Aldermore.”

    1. A further e-mail exchange included the following: “Doing all I can to cover my back as I believe Andy is!”
    1. Although Mr Atkinson and Ms Court were not called to give evidence, the Bank rely on the “Take-on Document”, never seen by Mr Lynch until these proceedings, and not signed off at the time, to support its case that the Guarantee was provided to Mr Lynch by the hand of Mr Adcock on 12 September and returned signed, witnessed and dated. The Guarantee and this evidence spells what may be described as the height of its case.
    1. Mr Mills took the court to a number of the Bank’s internal documents arguing that they provided sufficient evidence for the court to make inferences of fact to support its case; they were of minimal evidential value. These documents were not put to any witness because the authors of those documents had not been called. In consequence, the evidence about the documents, their meaning, the date and circumstances in which they came to be created could not be tested. As an example Mr Mills took me to what he called a “preliminary checklist” which was not put to any witness. It included ticks by numbered paragraphs. Three paragraphs had a circle around the number and a tick. Mr Mills submitted that it was permissible to infer that the author (who was not disclosed) had first circled the matters that required doing before the Bank could be satisfied that the conditions for lending had been satisfied. After they were satisfied, a tick was applied. One such matter concerned the Guarantee.
    1. An inference can only be properly drawn from a fact or facts that has or have been established. Once a fact has been established an inference may be drawn to support a further finding of fact which follows logically from the established fact.
    1. It has not been proved that the purpose of the circles was to indicate that an item on the sheet was outstanding. They may have been circled for other reasons. It is known that the Bank was not satisfied about the relevant licences, certificates and accreditations until 14 September 2011, yet the “Take-On” document included prior dates (12 September 2011). There is no explanation as to why there would be a shadow document for tracking documents: casting further doubt on the evidential weight of the “Take-On Checklist”. Mr Mills submitted that the handwriting was that of Ms Court. Her unsigned witness summary explains her working practice and contradicts the submission made by Mr Mills. In the summary, she says that she “relied heavily” on the Take-On Checklist. She does not mention a shadow document. The method she used for outstanding matters to be dealt with, was to mark them with an asterisk and then cross the asterisk out once satisfied. In the absence of cross-examination where the documentary record could be examined, the court is left with accepting that Mr Mills’ interpretation of facts is possible, but that is not the same as drawing a proper inference of fact. I decline his invitation to do so.

THE JUDGE’S ASSESSMENT OF THE WITNESSES

 

The judge made general observations on the assessment of evidence.

    1. The events germane to the determination of this case took place nearly a decade ago. When assessing the reliability of the six witnesses seen and heard, I have in mind the researches and findings of the cognitive psychologist and expert on human memory Dr Elizabeth Loftus, and the criminal psychologist and researcher at University College London, Dr Julia Shaw. Human memory is not stable. It has a strong propensity to change over time, to provide false accounts and be susceptible to suggestion. In short, memory is malleable. A confident witness may be mistaken. Contemporary documents may provide a valuable guide to the truth: Armagas Ltd v Mundogas S.A. [1985] 1 Lloyd’s Rep.1, at page 57 col. 1; Goodman v Faber Prest Steel [2013] EWCA Civ 153. In Gestmin SGPS S.A. v Credit Suisse (UK) Limited, Credit Suisse Securities (Europe) Limited [2013] EWHC 3560 (Comm) Leggatt J (as he was) explained that the litigation process itself may lead to a witness’s memory of events being based on documents and later interpretation rather than the original experience; all remembering of distant events involves reconstructive processes:

“[18] Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.

[19] The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party’s lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.”[20] Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness’s memory has been “refreshed” by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness’s memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.”

    1. Leggatt J set out the best approach to evidence [22]:

“[T]he best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth”

THE EVIDENCE THAT A DOCUMENT WAS NOT SIGNED

    1. Her recall of the oval table meeting appeared clear. She would have seen the oval table on many occasions and it is likely that this was the first time she had sat at it with Mr Adcock. As regards the black pen, when compared with the signatures on the Ruskin and Robust documentation, where those documents are signed in black ink there is a notable difference. Her memory was not discredited on either of these issues.
    1. In my judgment neither of these matters relied on short term memory, where memories may be lost in less than a minute. The events Miss Hughes recalled in the examination above were semantic. For example each time a black pen was asked (or shouted) for the memory would be reinforced. It is true, as Mr Mills says, that this evidence is not mentioned in her witness statement. One may expect such evidence to have been included if it was recalled at an earlier stage. It may have been the case that she was reminded about the colour pen when she was asked the question by Mr Mills or that it was the first time she had seen a colour pdf of the Guarantee. In its purest form, the evidence was untainted by reason of it having been subjected to the processes described by Leggatt J. In my judgment, in the circumstances where the evidence was not undermined in cross-examination, the raising of the colour pen for the first time, and the oval table meeting does not reduce its weight.
    1. Miss Hughes accepted that the writing and signature on the Guarantee was similar to her writing and signature, but her evidence was “I did not sign it”. She was pressed by Mr Mills: “I am not asking to say that you did sign this now. My question is simply does it appear to be your signature?” She candidly responded that it does appear to be similar. Mr Mills tried a different tack, but Miss Hughes was firm in her response “my evidence is that I did not sign this document and that I do not know how it got there, and I do not know who put it there. That is my evidence.” She then gave examples of how the manuscript of her name and address under the signature is different from her writing style.
  1. In my judgment, her evidence was not undermined. I treat her evidence as having been given with honesty and providing a reliable account of events.

THE BANK’S WITNESSES

The bank’s witnesses, it transpired, could give no real first-hand evidence of the circumstances in which the guarantee was allegedly signed.

    1. Mr Broomhead was asked about the Take-On Checklist. Mr Mills asked him a few questions as examination in chief: “Can you explain why you have not signed this document?” Mr Broomhead could not explain. Cross-examination did not start until the next day. Mr Broomhead is likely to have given the Take-On Checklist some thought overnight. In cross-examination his evidence was confused. His first position was that he did not know why his name was on the Take-On Checklist. It would have been pre-completed by Ms Court. He was away and could not have dealt with the sign-off. Others knew he was away. Later he thought that it was him who had authorised the payment: he had not been away. His position reverted to that given in the examination in chief namely, he could not explain why he did not sign-off. I reject the submission that Mr Broomhead was falsifying his evidence but it is apparent that the Bank had not conducted the “take-on” in a systematic and thorough manner: mistakes had been made.
    1. Mr Broomhead gave interesting testimony accepting that he had no personal knowledge of what happened at the meeting of 15 September 2011. He was not present and did not see the Guarantee. He had no knowledge of what Ms Court had taken with her to that meeting; and no knowledge of what documents she returned with. His written evidence stated that the Bank always required an unlimited personal guarantee from directors of companies that received finance. His position softened under cross-examination. He said that each case would be “looked at on a case by case basis”. And that it would not be inconsistent with Bank policy for Mr Clark to have had the conversation, relayed by Mr Lynch, that it would ask for a limited personal guarantee. The evidence of Mr Broomhead is not inconsistent with that of Mr Lynch on this issue.
    1. Overall, the weight I lend to Mr Broomhead’s evidence is attenuated to reflect its inconsistencies and unreliability.
    1. Mr Adcock gave strident evidence but accepted that he could not remember all the events of September 2011. He could not recall if the offer letter had been sent on 2 September 2011, if it had been signed, returned or whether it had to be signed. His written evidence was that the offer letter had been signed. His oral testimony was that he would have remembered this in 2014 when he was first asked to recall it (3 years after the event). However his memory, even in 2014 was unreliable in this respect. There was no document which was signed on 2 September 2011. He gave evidence that the Guarantee would have been produced to Mr Lynch on 12 September 2011, but later accepted that he could not remember: “I cannot recall exactly the full suite of documents that I took out with me on that day.” He self-restricted his evidence to what the Bank should have done or his usual practice. I shall lend such weight as is appropriate given his oral evidence.
  1. The last to enter the virtual witness box was Mr Bramwell. He struck me as a confident character with an ebullient disposition. His evidence, as I have mentioned was tainted by his own knowledge bias at to what a “standard” guarantee comprises, accepting, that the wording in the offer letter referred to “format” not content. He was unable to recollect his appointment as non-executive chairman. He accepted that he could not recall accurately the conversation on 8 September 2011 and had no part to play in the events of 12 and 15 September 2011. He never saw the Guarantee. His evidence had little bearing on the issues that have to be decided.

THE JUDGE’S CONCLUSION

  1. On this application the Bank bears the burden of proof to demonstrate on the balance of probabilities that it is a creditor of Mr Lynch. It seeks to do so by relying on the Guarantee. In my judgment it cannot do so. The first-hand evidence of Mr Lynch and Miss Hughes is to be preferred over those called to give evidence for the Bank. The key personnel at the Bank who are said to have dealt with the formalities and documentation for the financial facility advanced to Ruskin, did not give evidence. Mr Adcock, who did give evidence, was not able to recall if he saw the Guarantee and not able to say that he personally took it to the offices of Ruskin. There is no evidence that it was posted or e-mailed (the Bank’s usual practice) to Mr Lynch. I have found that the Guarantee was never produced to Mr Lynch. He had never seen the Guarantee before the Bank made demand. It follows that he had never seen or read its terms. He understood from a conversation with the regional managing director that if a personal guarantee was required it would be in the same or similar form to the personal guarantee he had provided to a previous lender: RBSIF. That was the only conversation he had with a member of the Bank about the provision of a personal guarantee. As Mr Lynch had not seen the Guarantee he did not execute it. As the Guarantee was not produced to Ruskin or Mr Lynch it is more likely than not that Miss Hughes did not see the Guarantee prior to the facility being advanced. It follows that Miss Hughes did not witness the signature of Mr Lynch. This conclusion is consistent with the first witness statement of Mr Dartford (see paragraph 5.3 above). There is no evidence to support the contention that Mr Lynch provided actual authority to Miss Hughes to sign the Guarantee on his behalf. The alternative arguments of res judicata, agreement by offer and estoppel fail in law and on the facts.