Lloyds TSB Bank Plc v Hayward [2005] EWCA Civ 466 (27 April 2005)

Lloyds TSB Bank Plc v Hayward [2005] EWCA Civ 466 (27 April 2005)

The Court of Appeal held that the trial judge was entitled to find, on the evidence, that an oral agreement was reached at the 23 September 1994 meeting which varied the written facility letter, and that the effect of subsequent agreements (including the Gardiner side letter) was to alter the contractual position to Mr Hayward's potential disadvantage without his consent, thereby discharging him from liability under the guarantees by operation of the rule in Holme v Brunskill.

Citation
[2005] EWCA Civ 466
Parties
Appellant/claimant: Lloyds TSB Bank Plc; Respondent/defendant: Norman Hayward
Jurisdiction
England and Wales
Judgment Date
27 April 2005
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court Retrial
Outcome
Appeal dismissed
Legal Topics
Variation of Contract, Discharge of Guarantor, Parol Evidence Rule, Oral Agreements, Events of Default, Guarantee Liability
Contract Law Banking Law Guarantees Variation of Contract Discharge of Guarantor Parol Evidence Rule Oral Agreements Events of Default +1 more

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Parties

Lloyds TSB Bank Plc

Appellant/claimant

Norman Hayward

Respondent/defendant

Procedural Posture

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

Legal Issues

  1. 1 Whether an oral agreement at the 23 September 1994 meeting varied the written facility letter between the bank and the club
  2. 2 Whether the oral agreement discharged Mr Hayward from liability under his guarantees by operation of the rule in Holme v Brunskill
  3. 3 Whether the Hayward side letter varied clause 8 of the guarantees so as to reinstate the rule in Holme v Brunskill

Ratio Decidendi

The Court of Appeal held that the trial judge was entitled to find, on the evidence, that an oral agreement was reached at the 23 September 1994 meeting which varied the written facility letter, and that the effect of subsequent agreements (including the Gardiner side letter) was to alter the contractual position to Mr Hayward's potential disadvantage without his consent, thereby discharging him from liability under the guarantees by operation of the rule in Holme v Brunskill.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Lloyds TSB Bank Plc is dismissed.
  • The judgment of Evans-Lombe J in favour of Mr Hayward stands.