Cherry Tree Investments Ltd v Landmain Ltd

Cherry Tree Investments Ltd v Landmain Ltd

The Court of Appeal held that, in the context of a registered charge under the Land Registration Act 2002, extrinsic evidence such as a facility agreement cannot be used to interpret the charge so as to vary the statutory power of sale, as the charge is a public document addressed to third parties who may rely on the register. Corrective interpretation is not appropriate where the mistake is not apparent from the language of the charge itself. Rectification, not interpretation, is the proper remedy for omitted terms, but no rectification claim was pleaded or proved. The charge and facility agreement do not constitute a single document for statutory purposes.

Parties
Respondent: Cherry Tree Investments Ltd; Appellant: Landmain Ltd
Jurisdiction
England and Wales
Judgment Date
31 May 2012
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed; summary judgment set aside; claim dismissed unless amended to include rectification.
Legal Topics
Interpretation of Registered Charges, Statutory Power of Sale, Corrective Interpretation, Rectification, Land Registration
Property Law Contract Law Interpretation of Registered Charges Statutory Power of Sale Corrective Interpretation Rectification Land Registration

Case Brief

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Parties

Cherry Tree Investments Ltd

Respondent

Landmain Ltd

Appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether extrinsic evidence (facility agreement) can be used to interpret a registered charge under the Land Registration Act 2002
  2. 2 Whether corrective interpretation can be applied to incorporate omitted terms into a registered charge
  3. 3 Whether the charge and facility agreement constitute a single document for purposes of varying statutory power of sale

Ratio Decidendi

The Court of Appeal held that, in the context of a registered charge under the Land Registration Act 2002, extrinsic evidence such as a facility agreement cannot be used to interpret the charge so as to vary the statutory power of sale, as the charge is a public document addressed to third parties who may rely on the register. Corrective interpretation is not appropriate where the mistake is not apparent from the language of the charge itself. Rectification, not interpretation, is the proper remedy for omitted terms, but no rectification claim was pleaded or proved. The charge and facility agreement do not constitute a single document for statutory purposes.

Court Disposition

Appeal allowed; summary judgment set aside; claim dismissed unless amended to include rectification.

Orders

  • Judge's order set aside
  • Claim dismissed unless Cherry Tree amends particulars to add rectification