Lloyds TSB Bank Plc v Crowborough Properties Ltd & Ors

Lloyds TSB Bank Plc v Crowborough Properties Ltd & Ors

The Court of Appeal held that the judge at first instance took too narrow a view by focusing solely on whether there was an intention to grant a new charge. The correct approach was to ascertain the parties' common intention, which was that the Bank would retain the right to enforce security over all charged properties for Crowborough's indebtedness. The drafting error or mistaken assumption did not preclude rectification, as the evidence showed a clear and continuing common intention that was not reflected in the Tomlin order schedule. Rectification was therefore granted.

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 / Appeal From High Court Judgment
Outcome
Appeal allowed; rectification granted
Legal Topics
Rectification of Contract, Tomlin Order, Security Over Land, Guarantees, Mistake in Contract Drafting
Contract Law Banking Law Property Law Rectification of Contract Tomlin Order Security Over Land Guarantees 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 / Appeal From High Court Judgment

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 drafting error or mistaken assumption prevents rectification

Ratio Decidendi

The Court of Appeal held that the judge at first instance took too narrow a view by focusing solely on whether there was an intention to grant a new charge. The correct approach was to ascertain the parties' common intention, which was that the Bank would retain the right to enforce security over all charged properties for Crowborough's indebtedness. The drafting error or mistaken assumption did not preclude rectification, as the evidence showed a clear and continuing common intention that was not reflected in the Tomlin order schedule. Rectification was therefore granted.

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