Clydesdale Bank Plc v Weston Property Company Ltd

A court may construe a document to correct an obvious omission where the omitted wording and the required correction are sufficiently clear. Rectification is also available where the parties’ common intention and the mistake are established by the evidence. A certificate of registration of company charges is conclusive as to due registration, but mistaken particulars may be rectified under section 873 of the Companies Act 2006 where the omission or misstatement arose through inadvertence or another sufficient cause.

Clydesdale Bank applied under Part 8 for declarations concerning the construction, or alternatively rectification, of a legal mortgage executed by Weston Property Company Ltd. The mortgage was intended to secure liabilities owed by Charlotte Partnership Homes Ltd, but the customer’s name was omitted from box D. The bank also sought relief concerning particulars registered at Companies House and the resulting certificate, which incorrectly identified Weston as the debtor.

The central issues were whether the mortgage could be construed as securing Charlotte’s liabilities and whether the registered particulars could be rectified.

1. Mortgage. The documentary and witness evidence established a common intention that the mortgage should secure Charlotte Partnership Homes Ltd’s liabilities. The omission of its name from box D was a mistake. The court therefore declared that the mortgage was to be read as if Charlotte’s name and registered address had been inserted. Separate rectification of the mortgage was unnecessary.
2. The court applied the requirements for rectification summarised in Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 7, at page 74, paragraph 33. It also applied the construction principles in East v Pantiles Plant Hire Ltd [1981] 263 EG 61 and Homburg Houtimport BV v Agrosin Private Ltd (The Stars In) [2004] 1 AC 715. A clear mistake on the face of the instrument and a sufficiently clear correction justified construction rather than rectification.
3. Registration. Under Companies Act 1985, the certificate of registration was conclusive evidence of due registration. The court was bound by Re CL Nye Ltd [1971] 1 Ch 442. The contrary approach in Grove v Advantage Health Care (T10) Ltd [2000] 1 BCLC 661 could not prevail.
4. Section 873 of the Companies Act 2006 provided a separate and simpler route. The bank was a person interested, and the misstatement resulted from inadvertence or sufficient cause. The court accordingly ordered rectification of the registered particulars and directed that the order be sent to the Registrar of Companies.