Company Developments (Finance) Ltd v Coffee Club Restaurants Ltd & Ors

Company Developments (Finance) Ltd v Coffee Club Restaurants Ltd & Ors

The court held that, despite the omission in clause 1.28, it is clear as a matter of construction that the Liability Period for the original guarantors is the period during which the Original Tenant is bound by the tenant's covenants. The limitation on liability is set out in clause 6.1.1, and the lease should be construed accordingly. The appeal is dismissed and the guarantors remain liable for the sums ordered.

Parties
Claimant/respondent: Company Developments (Finance) Ltd; Defendant/appellant: Coffee Club Restaurants Ltd; Defendant/appellant: Mr O’Connor; Defendant/appellant: Mr Prashad
Jurisdiction
England and Wales
Judgment Date
14 June 2011
Procedural Posture
Civil Appeal / Appeal From First Instance Judgment
Outcome
Appeal dismissed
Legal Topics
Guarantee Liability, Lease Construction, Rectification, Contractual Interpretation
Contract Law Landlord and Tenant Law Guarantee Liability Lease Construction Rectification Contractual Interpretation

Case Brief

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Parties

Company Developments (Finance) Ltd

Claimant/respondent

Coffee Club Restaurants Ltd

Defendant/appellant

Mr O’Connor

Defendant/appellant

Mr Prashad

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From First Instance Judgment

Legal Issues

  1. 1 Whether the court can construe or imply a definition of 'Liability Period' for original guarantors in the lease
  2. 2 Whether the omission in clause 1.28 renders the guarantors not liable
  3. 3 Whether the lease should be rectified to include the omitted provision

Ratio Decidendi

The court held that, despite the omission in clause 1.28, it is clear as a matter of construction that the Liability Period for the original guarantors is the period during which the Original Tenant is bound by the tenant's covenants. The limitation on liability is set out in clause 6.1.1, and the lease should be construed accordingly. The appeal is dismissed and the guarantors remain liable for the sums ordered.

Court Disposition

Appeal dismissed

Orders

  • Judgment for the claimant against the second and third defendants for £158,682.09 plus interest of £15,089.58 and costs, with £25,000 payable on account of costs.