Litigation between the guarantor of a £14.3m loan, collectively financed by 4,900 members of the public, and the company which facilitated the transaction has had a pre-trial review at the High Court earlier today.
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Reporting by Daniel Cloake.
In July 2016 the peer-to-peer lending company Lendy Ltd acted as an agent in a loan to Q.E.D. Developments Limited.
The loan was secured by a legal protection known as a first charge against the former Sunbeam Factory in Wolverhampton, pictured here in May 2018
The loan description on the Lendy website describes the site as:
… a former industrial premises constructed towards the end of the 19th Century and was known for its production of Sunbeam Motorcycles. The property had been vacant for over 10 years, before being purchased for development.
https://lendy.co.uk/loans/252
The Sunbeam factory is one of Wolverhampton’s most iconic industrial buildings and is a project backed not only by the city community but has the overwhelming support of the council as they are keen to see its regeneration being that in the centre of Wolverhampton’s regeneration zone.
The BBC reported in 2014 that the ‘transformation plan’ to develop the site had been approved by Wolverhampton City Council with QED’s director Mr Liam Brian Wordley quoted as saying he was looking forward to “starting work immediately” to bring “this fantastic building back to life“.
The development ultimately failed and the borrowing company and owner of the site Q.E.D. Developments Limited was placed into administration on 12th Nov 2018 with Carl Jackson and Simon Campbell from insolvency firm Quantuma appointed as Joint Administrators.
The property was sold in August 2021 for £7.1m. The Joint Administrators’ of Lendy advise that they are holding the funds pending the outcome of this litigation.
The essence of Mr Wordley’s claim is that the development loan agreement was breached after apparent failures to procure timely payments of the various tranches of the loan. Mr Wordley says this resulted in delays, cost increases and eventually QED’s default under its agreements.
As a result, says Mr Wordley, the personal guarantee and the security over the Car Park are unenforceable and he is entitled to damages for having been deprived of its control.
An additional claim is that “Lendy failed to communicate in a way that was fair, clear and not misleading” which it’s said is breach of FCA rules.
Further information can be found in “Lendy asks court to ‘grasp the nettle’ in multi-million pound loan dispute“.
These allegations are denied by Lendy and SSSHL.
The March Hearing
A 21-minute pre-trial-review before HHJ Brian Rawlings was heard remotely at the Birmingham Civil Justice Centre earlier today.
The Judge expressed disappointment at the “very considerable number of issues” that we were told numbered fifty.
Barrister Matthew Weaver KC, representing Lendy and the other defendants, explained that there may be room for further agreement between the parties but “the position is that we’ve run out of time to agree the points still in dispute“.
Judge Rawlings said he would “impose a direction [for the parties] to use your best endeavours to agree within seven days” however Weaver cautioned that “an ill wind blowing into the exercise may scupper things“.
We were also told that there was three issues seemingly omitted from a joint expert report. Mr Robert Weekes KC, representing the claimant Mr Wordley, said the “experts would meet again this afternoon to agree a way forward“.
A number of other ancillary orders were made by the court.
It is understood the matter has been listed for Trial on 8-12 May 2023.
Hearing details
Case number: BL-2020-BHM-000079
Liam Brian Wordley
-v-
Lendy Limited (in administration)
Saving Stream Security Holding Limited (in administration)
David Shambrook & Geoffrey Paul Rowley (as Receivers)
QED DEVELOPMENTS LIMITED (in administration)
Birmingham CJC Courtroom 205 (Floor 2)
Before: His Honour Judge Rawlings
Tuesday, 14 March 2023 10.30am
PTR (Pre-Trial Review) Hearing
Mouse in the Court 