Lloyds TSB Bank Plc v Crowborough Properties Ltd & Ors [2013] EWCA Civ 107 (12 February 2013)

Lloyds TSB Bank Plc v Crowborough Properties Ltd & Ors [2013] EWCA Civ 107 (12 February 2013)

The Court of Appeal held that the judge at first instance took too narrow a view by focusing solely on whether the parties intended to grant a new charge. The correct approach was to consider whether there was a common intention that the Bank would retain the right to sell all charged properties and apply the proceeds to Crowborough's indebtedness. The evidence established such a common intention, and the drafting error in the Tomlin order schedule failed to reflect this. Rectification was therefore granted to give effect to the parties' true agreement.

Citation
[2013] EWCA Civ 107
Parties
Claimant: Lloyds TSB Bank Plc; First Defendant: Crowborough Properties Limited; Second Defendant: Sanjiv Kaushal; Third Defendant: Deepak Kaushal; Fourth Defendant: Mark Stupples; Fifth Defendant: Robert Baldwin
Jurisdiction
England and Wales
Judgment Date
12 February 2013
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal allowed; rectification granted.
Legal Topics
Rectification of Contract, Compromise Agreements, Security Interests, Mistake in Contract Drafting
Equity Banking and Finance Property Law Rectification of Contract Compromise Agreements Security Interests Mistake in Contract Drafting

Case Brief

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Parties

Lloyds TSB Bank Plc

Claimant

Crowborough Properties Limited

First Defendant

Sanjiv Kaushal

Second Defendant

Deepak Kaushal

Third Defendant

Mark Stupples

Fourth Defendant

Robert Baldwin

Fifth Defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether the Bank is entitled to rectification of the Tomlin order schedule to reflect the parties' common intention regarding security over the Kaushals' properties
  2. 2 Whether a common intention existed that the Bank would retain rights over all charged properties despite the release of personal guarantees

Ratio Decidendi

The Court of Appeal held that the judge at first instance took too narrow a view by focusing solely on whether the parties intended to grant a new charge. The correct approach was to consider whether there was a common intention that the Bank would retain the right to sell all charged properties and apply the proceeds to Crowborough's indebtedness. The evidence established such a common intention, and the drafting error in the Tomlin order schedule failed to reflect this. Rectification was therefore granted to give effect to the parties' true agreement.

Court Disposition

Appeal allowed; rectification granted.

Orders

  • Rectification of the Tomlin order schedule to reflect the parties' common intention that the Bank retains rights over all charged properties for recovery of Crowborough's indebtedness.