Commercial First Business Limited v Munday & Anor
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE PATTEN
- LORD JUSTICE UNDERHILL
- LORD JUSTICE BRIGGS
Areas of Law
- Contract Law
- Civil Procedure
- Property and Real Estate Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
This case revolves around CFB's attempt to claim possession of a property secured by loans when the defendants defaulted. The appeal examines whether the 'all monies clause' extends to secure an additional loan for the Cottages and whether estoppel or procedural doctrines prevent CFB from enforcing this. The court reversed earlier findings favoring defense's estoppel arguments and demanded further examination regarding a possible 2008 collateral agreement. The case bridges issues of contract interpretation, procedural estoppel, and potential collateral agreements in property security contexts.
Judgment
Lord Justice Patten :
This is an appeal by the claimant, Commercial First Business Limited (“CFB”), against an order made by HH Judge Cotter QC in the Plymouth County Court on 3 October 2013. The judge allowed an appeal by the defendants and set aside an order made by Deputy District Judge Hall on 25 January 2013 by which he had refused to suspend or set aside a warrant for possession of 13 November 2012 obtained by CFB in respect of a property known as Wakeham Farm House, South Milton, near Kingsbridge (“the Farm House”). This second appeal by CFB is brought with the permission of Christopher Clarke LJ.
The relevant background facts can be summarised as follows. In June 2006 the defendants borrowed some £1,352,000 from CFB on the security of the Farm House together with (by a separate loan agreement) a further £1,007,500 on some adjoining barns which had been converted to holiday cottages (“the Cottages”). The loans were intended to re-finance existing borrowings. Separate charges were executed in respect of each loan.
Clause 1 of each charge provided that the relevant property was charged with:
“the payment and discharge of:
(i) all monies now or at any future time due to [CFB] from [the defendants] under each and every loan agreement, now or at any time made between the lender and the borrower, on the Commercial First general lending terms and conditions”.
The defendants, Mr Jonathan Clive Munday, and his mother, Mrs Freda Rose Munday, were joint mortgagors under both charges.
By September 2007 there were arrears in respect of both loans and CFB commenced proceedings for possession and payment in respect of both properties. Separate claims were issued in respect of each loan using the standard County Court N5 claim form and the N120 form of particulars of claim. In the claim for possession of the Farm House, the pleaded mortgage arrears were those in respect of the Farm House loan. On 13 November 2007 possession orders were made in both sets of proceedings together with money judgments for £1,422,622.63 in respect of the Farm House loan and £1,060,562.24 in respect of the Cottages loan.
CFB then proceeded to obtain warrants of possession for both properties but on 18 April 2008 these were suspended on terms that the global amount of the arrears on both loans (some £203,223) would be repaid by monthly instalments.
In the event, these were not met and in May 2009 CFB obtained possession of the Cottages. The defendants say that the C