C – Construction
6/3/24
PERHAR v FREESTONE [2024] EWHC 945 (Ch)
The judge below had been wrong to determine on a summary basis the question whether a debenture had been enforceable and that administrators had been properly appointed under it. There were disputed factual issues, including whether the creditor had waived any breach. The debenture did not include any express term as to when the floating charge within it became enforceable and the appeal court did not consider it appropriate to decide on a summary basis the nature of any implied term because this could be fact dependent and might turn on findings made at a trial. The fact that the debenture provided for payment on demand was not sufficient because a term as to reasonable notice might be implied for enforcement of the floating charge.
3/7/15
MORRIS v ROYAL BANK OF SCOTLAND [2015] EWHC (Ch)
Clauses in a debenture granted by a company to a bank restricted the company from disposing of charged property without the bank’s consent. On the proper construction of the debenture, the property charged by the debenture included claims against the bank itself. A purported assignment of those claims to the claimant was therefore ineffective. It was not arguable that the restrictions in the debenture were unenforceable on public policy grounds or as unreasonable exclusion clauses. The bank was granted summary judgment dismissing the claims.
20/3/14
FONS HF (IN LIQUIDATION) v CORPORAL LTD [2014] EWCA Civ 304
The judge below had been wrong to decide that a charge expressed to charge shares, debentures and other securities in a specified company did not charge rights under an agreement by which the chargor had provided unsecured loans to that company. The court of appeal considered cases on the meaning of debenture [27-34] and concluded that there was nothing in the charge to prevent the reference to debentures from carrying its ordinary meaning of an acknowledgment of debt recorded in a written document. A simple loan agreement was therefore a debenture within the scope of the charge.
28/6/13
FONS HF (IN LIQUIDATION) v CORPORAL LTD [2013] EWHC 1801 (Ch)
A charge expressed to charge shares, debentures and other securities in a specified company did not charge rights under an agreement by which the chargor had provided unsecured loans to that company. The court summarised the correct approach to construction of the charge [39] and concluded that a simple loan agreement could not be regarded as a debenture or other security.
31/5/12
CHERRY TREE INVESTMENTS LTD v LANDMAIN LTD [2012] EWCA Civ 736, [2013] Ch 305
Where a legal charge had been registered it could not be interpreted as including terms which by mistake had only been set out in a separate facility letter. The only way to achieve that was by rectification.