Lloyds TSB Bank Plc v Hayward

Lloyds TSB Bank Plc v Hayward

The Court of Appeal upheld the trial judge's finding that an oral agreement was reached at the meeting on 23 September 1994, varying the facility letter to the effect that Mr Hayward's liability under his guarantees would not arise until after 30 June 1997 if Mr Gardiner's guarantee was called for the 1996 instalment. The Hayward side letter displaced clause 8 of the guarantees and reinstated the rule in Holme v Brunskill. The Gardiner side letter constituted a variation of the loan arrangements to the potential detriment of Mr Hayward, releasing him from liability under the guarantees.

Parties
Appellant/claimant: Lloyds TSB Bank Plc; Respondent/defendant: Norman Hayward
Jurisdiction
England and Wales
Judgment Date
27 April 2005
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court
Outcome
appeal dismissed
Legal Topics
Variation of Contract, Guarantee Discharge, Oral Agreements, Parol Evidence Rule, Holme V Brunskill Rule
Contract Law Banking Law Guarantees Variation of Contract Guarantee Discharge Oral Agreements Parol Evidence Rule Holme V Brunskill Rule

Case Brief

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Parties

Lloyds TSB Bank Plc

Appellant/claimant

Norman Hayward

Respondent/defendant

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether an oral agreement varying the terms of a facility letter and guarantees was reached at a meeting on 23 September 1994
  2. 2 Whether the bank was bound by the oral agreement
  3. 3 Whether the Hayward side letter displaced clause 8 of the guarantees and reinstated the rule in Holme v Brunskill

Ratio Decidendi

The Court of Appeal upheld the trial judge's finding that an oral agreement was reached at the meeting on 23 September 1994, varying the facility letter to the effect that Mr Hayward's liability under his guarantees would not arise until after 30 June 1997 if Mr Gardiner's guarantee was called for the 1996 instalment. The Hayward side letter displaced clause 8 of the guarantees and reinstated the rule in Holme v Brunskill. The Gardiner side letter constituted a variation of the loan arrangements to the potential detriment of Mr Hayward, releasing him from liability under the guarantees.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed; judgment of the High Court upheld; Mr Hayward released from liability under the guarantees.