‘The Court should not give one word in an interrelated, overlapping list of expressions a meaning that is so broad as to be inconsistent with adjoining words or that renders those words irrelevant’
‘… whether the specified things which precede the general words can be placed under some common category. By this [is meant] that the specified things must possess some common and dominant feature’. 75). Mr Macpherson submitted a) That each of the identified bases of non-recoverability of Guaranteed Obligations identified in Clause 2.2 of the Guarantee by the words ‘illegality, incapacity, lack or exceeding of powers, ineffectiveness of execution’ share two common characteristics: i) First, each concerns a characteristic of or quality of GBQ ii) Secondly, each relates to a state of affairs that existed as at the date of execution of the Loan Facility, i.e. a historic state of affairs pre-dating the Guarantee b) That those words comprise a genus such that the words ‘or any other reason’ should be construed as being limited to other reasons, sharing those same common characteristics, that made the Guaranteed Obligations irrecoverable from GBQ from the very outset of the Loan Facility c) That Clause 2.2 of the Guarantee is thus to be construed as a backwards-looking provision directed at characteristics of GBQ or states of affairs that existed at the date of execution of the Loan Facility, meaning that the addition of the words ‘or any other reason’ should be interpreted as triggering a liability on the part of Mr Roberts as a principal debtor only if the irrecoverability of the Guaranteed Obligations was the result of some other ‘characteristic’ of GBQ or state of affairs that existed as at the date of GBQ’s entry into the Loan Facility d) That since the insolvency of GBQ occurred only subsequent to GBQ’s entry into the Loan Facility (and was not a state of affairs or a characteristic of GBQ that existed at the date of GBQ’s entry into the Loan Facility), GBQ’s insolvency is not an event i) that fell within the scope of the ‘any other reason’ provision in Clause 2.2 of the Guarantee, or ii) that triggered a liability on the part of Mr Roberts under Clause 2.2 of the Guarantee as if he was a principal debtor in respect of the Guaranteed Obligations. 76). Despite the attractive way in which Mr Macpherson presented his submissions, I reject the suggestion that the words ‘or any other reason’ in Clause 2.2 of the Guarantee should be construed in the manner for which he contends: a) First, as I have said above, the task for the Court is to construe Clause 2.2 of the Guarantee using the well-established principles of construction to be found in the authorities so as to ascertain the mutual intention of the parties at the date when the Guarantee was entered into. While that of course requires analysis of the words in question, it also requires a consideration of the Guarantee as a whole and the factual matrix which existed at the time the Guarantee was entered into b) As at the date of the Guarantee i) GBQ had already made a substantial repayment to Kseye under the Loan Facility without asserting that the Guaranteed Obligations were irrecoverable from it by reason of any characteristic or state of affairs that had existed as at the date of entry into the Loan Facility, and ii) GBQ was already substantially in default under the Loan Facility, suggesting that its financial position and ability to repay the Guaranteed Obligations as at that date and in the future were (at best) uncertain c) In those circumstances, in the absence of clear words to such effect it would seem inherently unlikely that Kseye and Mr Roberts intended to include a provision in the Guarantee that would trigger a liability on the part of Mr Roberts as a primary debtor i) Only in the event that at some point in the future it was established that a historic state of affairs, dependent on a characteristic of GBQ, existing at the date of GBQ’s entry into the Loan Facility made the Guaranteed Obligations irrecoverable from GBQ, and ii) Not in the event that the Guaranteed Obligations become irrecoverable from GBQ because GBQ had become financially unable to meet those Guaranteed Obligations. As Ms Williamson put it, a key element of the factual matrix against the background of which the Guarantee was entered into was Kseye’s wish to ensure that, one way or another, it would be paid the Guaranteed Obligations despite GBQ already being in default under the Loan Facility d) Secondly, while the words ‘illegality, incapacity, lack or exceeding of powers, ineffectiveness of execution’ certainly can relate to a characteristic of GBQ and/or a state of affairs in existence at the date of execution of the Loan Facility, it does not appear to me that it can be said that the parties must have intended those words to only relate to the same: i) While ‘illegality, incapacity, lack or exceeding of powers’ can refer to a state of affairs existing as at the date of GBQ’s entry into the Loan Facility, any of those states of affairs could equally come into existence after the date of the Loan Facility. If Mr Roberts’ position was the correct one, irrecoverability because one of those states of affairs had come into existence at any time after the date of entry into the Loan Facility (whether before or after the date of the Guarantee) would not suffice to trigger liability of Mr Roberts as a principal debtor. I see no logical reason for interpreting the words of Clause 2.2 of the Guarantee as drawing that distinction ii) During the course of his submissions Mr Macpherson sought to contrast Clause 2.2 of the Guarantee with Clause 3.2 of the Guarantee (under the heading ‘Lender Protections’) which, he suggested, was a ‘forward-looking’ provision identifying events that might occur and states of affairs that might come into existence after the execution of the Loan Facility (or after the execution of the Guarantee) which the parties had agreed would not adversely affect Mr Roberts’ liability under the Guarantee. However (1) Clause 3.2.6 of the Guarantee identifies ‘incapacity’ of GBQ as one such occurrence or event. That is a state of affairs listed in Clause 2.2 of the Guarantee (2) Clause 3.2.7 of the Guarantee identifies ‘any invalidity, illegality, unenforceability [or] irregularity … of any actual or purported obligation of, or Security held from, GBQ … in connection with the Guaranteed Obligations’ as further such occurrences. Once again, those are states of affairs listed in Clause 2.2 of the Guarantee iii) So, if Mr Macpherson was correct in his submissions, the same words would have to be construed as being only backward-looking for the purpose of Clause 2.2 of the Guarantee and being only forward-looking for the purpose of Clause 3.2 of the Guarantee. Absent the clearest possible wording (which is not present in this case), it cannot be inferred that that was the mutual intention of the parties. Rather, the words in Clauses 2.2 and 3.2 are in my view each to be construed as being both backward looking and forward looking, describing events and states of affairs both before and after the date of the Guarantee e) Thirdly (although I accept that this is a factor of limited importance) there is nothing in the remainder of the Guarantee or in the Side Letter to support the interpretation of Clause 2.2 of the Guarantee for which Mr Roberts contends. There is nothing in the Guarantee and Side Letter consistent with the parties having intended Mr Roberts’ liability to Kseye to be dependent on why GBQ could not or would not meet its liabilities under the Loan Facility. The Guarantee and Side Letter are consistent with the parties having intended that Mr Roberts’ liability both qua guarantor and qua primary obligor would exist, irrespective of the reason why Kseye was unable to recover the Guaranteed Obligations from GBQ. 77). It follows from the above that I reject Mr Macpherson’s submission that the words ‘illegality, incapacity, lack or exceeding of powers, ineffectiveness of execution’ constitute a genus of the type contended for by him. In my view those words do not have a sufficient common and dominant characteristic of the type contended for by Mr Roberts to justify a) Classifying them as a genus, or b) Applying the Ejusdem Generis principle to limit the ambit of the words ‘or any other reason’