The court examined whether two loans constituted unenforceable regulated mortgage contracts under Articles 61 and 61A Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
These proceedings arise out of transactions in 2019 and 2021 in which Goldentree Financial Services plc (Goldentree) advanced finance to Mr McGuinness and Hitcham. Goldentree secured these loans by way of a legal charge over the development properties, a debenture over the company and obtained a personal guarantee from Mr McGuiness over the course of this period.
Following a default, Goldentree appointed administrators over Hitcham Homes and sought possession of one of the development properties at Wooburn Green. In response, Mr McGuiness issued various applications, including an application for relief under the Insolvency Act 1986 in his capacity as the company’s sole director and shareholder seeking declarations that the loan and security were unenforceable.
He also issued further claims for damages and declaratory relief in relation to the 2019 and 2021 loans (the composite proceedings). Under the composite proceedings, Mr McGuinness argued that the 2019 loan agreement and 2021 facility were unenforceable regulated mortgage contracts under the Financial Services and Markets Act 2000 (FSMA 2000). He also challenged the validity of his personal guarantee and the security over the Wooburn Green property, claiming that these had been discharged on 7 September 2022.
The court analysed the statutory requirements for regulated mortgage contracts and investment property loans under Articles 61 and 61A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO 2001).
HHJ Halliwell determined that the essential requirements of an investment property loan in Article 61A(6) RAO 2001 were "unarguably satisfied" in respect of the 2019 loan agreement. Similarly, the 2021 facility was incapable of being a regulated mortgage contract as credit was provided to Hitcham Homes, not Mr McGuiness as an individual. He did not have sufficient standing to challenge the facility in any event.
As a result, Goldentree was entitled to reverse summary judgment on claims that 2019 and 2021 loans were unenforceable and the claimant’s remaining claims were struck out.
In reference to McGuinness v Goldentree Financial Services Plc and others [2025] EWHC 870.
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