High Court construes registered security document to correct an obvious mistake
We look at a case where the High Court judged that a security document that gave the wrong date should be construed as having the correct date.
Background
A large number of deeds of accession to a security agreement, all in the same form, cross-referred to the security agreement giving it the security agreement the wrong date. All the deeds of accession had been registered at Companies House. The beneficiary of the deeds applied for a declaration that they should be construed as containing the correct date for the security agreement
When considering construction of the deeds the court examined the effect of registration of the deeds (under section 859A of the Companies Act 2006) together with the requirement (under sections 859P and 859Q) that copies had to be available for inspection at the company’s registered office.
Application by court
The court applied the principle stated in Homburg Houtimport BV v Agrosin Private Ltd: The Starsin [2004] 1 AC 715 that the position of third parties to whom the document is addressed must be taken into account when construing public documents. It decided that third parties, in the case of registrable security documents (such as the deeds of accession), were those who might consider granting credit to or taking security from the company.
The court observed that anyone who inspected a copy of one of the deeds of accession, noticed the discrepancy and then enquired about it would find out about the true situation. The true situation, therefore, could be taken into account for the purposes of construction. This meant that the deeds concerned should be construed as if they contained cross-references to the security agreement giving the correct date, in place of the wrong date. (Pathway Finance Sàrl v London Hanger Lane Centre Ltd [2020] EWHC 1191 (Ch) (15 May 2020).)
Tags: finance
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