The Funding Corporation Block Discounting Ltd v Lexi Holdings Plc & Anor

The Funding Corporation Block Discounting Ltd v Lexi Holdings Plc & Anor

TFC acquired equitable proprietary interests in the proceeds of sale of certain properties by virtue of estoppel, as Lexi and the connected companies were estopped from denying the enforceability of the loan agreements and related security represented to TFC. However, TFC acquired no interest in the Tinsett properties, as there was no evidence of authority or representation binding the property owner. Barclays' security interest under its debenture was not released by the Deed of Release in respect of the right to set aside the property transfers, but the exercise of that right is subject to the protection of TFC's acquired rights under Companies Act 1985 s.322(2)(b). Thus, TFC is...

Parties
Claimant: The Funding Corporation Block Discounting Limited; First Defendant: Lexi Holdings Plc (in Administration); Second Defendant: Barclays Bank Plc
Jurisdiction
England and Wales
Judgment Date
25 November 2011
Procedural Posture
Civil / Judgment After Trial
Outcome
TFC's claim to the proceeds of sale of the properties (other than the Tinsett properties) is allowed; Barclays' claim to the proceeds of the Tinsett properties is allowed.
Legal Topics
Proprietary Claims, Equitable Charges, Priority of Interests, Fraud, Companies Act 1985 S.320/322, Land Registration Act 2002
Commercial Law Banking Law Equity and Trusts Insolvency Proprietary Claims Equitable Charges Priority of Interests Fraud +2 more

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Parties

The Funding Corporation Block Discounting Limited

Claimant

Lexi Holdings Plc (in Administration)

First Defendant

Barclays Bank Plc

Second Defendant

Procedural Posture

Civil / Judgment After Trial

Legal Issues

  1. 1 Whether TFC acquired proprietary interests in the proceeds of sale of properties formerly owned by Lexi Holdings Plc and subject to fraudulent transactions
  2. 2 Whether Barclays' security interests under its debenture have priority over TFC's claims
  3. 3 Effect of the Deed of Release between Barclays and Lexi on the parties' respective claims

Ratio Decidendi

TFC acquired equitable proprietary interests in the proceeds of sale of certain properties by virtue of estoppel, as Lexi and the connected companies were estopped from denying the enforceability of the loan agreements and related security represented to TFC. However, TFC acquired no interest in the Tinsett properties, as there was no evidence of authority or representation binding the property owner. Barclays' security interest under its debenture was not released by the Deed of Release in respect of the right to set aside the property transfers, but the exercise of that right is subject to the protection of TFC's acquired rights under Companies Act 1985 s.322(2)(b). Thus, TFC is...

Court Disposition

TFC's claim to the proceeds of sale of the properties (other than the Tinsett properties) is allowed; Barclays' claim to the proceeds of the Tinsett properties is allowed.

Orders

  • TFC is entitled to the proceeds of sale of the properties other than the Tinsett properties.
  • Barclays is entitled to the proceeds of sale of the Tinsett properties.