Cattles Plc v Welcome Financial Services Ltd & Ors

Cattles Plc v Welcome Financial Services Ltd & Ors

Clause 6.2 of the group guarantee deed is not limited to claims by a guarantor in its capacity as guarantor but extends to any claim by a guarantor against a debtor or co-guarantor, including inter-company debts, in competition with or in priority to the Bank, until the Bank's claims are satisfied in full. The language and context of the clause, as well as the commercial purpose of preserving the Bank's position in insolvency, support this construction.

Parties
Claimant: Cattles Plc; Defendant: Welcome Financial Services Limited; Defendant: The Royal Bank of Scotland; Defendant/appellant: Party A
Jurisdiction
England and Wales
Judgment Date
13 May 2010
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed
Legal Topics
Guarantees, Insolvency Proceedings, Inter Company Claims, Construction of Contracts
Banking and Finance Law Insolvency Law Contract Law Guarantees Insolvency Proceedings Inter Company Claims Construction of Contracts

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 4 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Cattles Plc

Claimant

Welcome Financial Services Limited

Defendant

The Royal Bank of Scotland

Defendant

Party A

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Proper construction of clause 6.2 of a group guarantee deed in favour of RBS
  2. 2 Whether clause 6.2 restricts only claims by a guarantor in its capacity as guarantor or extends to all claims including inter-company debts
  3. 3 Whether the clause precludes Cattles from claiming against Welcome in competition with or in priority to RBS

Ratio Decidendi

Clause 6.2 of the group guarantee deed is not limited to claims by a guarantor in its capacity as guarantor but extends to any claim by a guarantor against a debtor or co-guarantor, including inter-company debts, in competition with or in priority to the Bank, until the Bank's claims are satisfied in full. The language and context of the clause, as well as the commercial purpose of preserving the Bank's position in insolvency, support this construction.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; judgment of the High Court affirmed