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Company Developments (Finance) Ltd v Coffee Club Restaurants Ltd

[2011] EWCA Civ 766

Court: Court of Appeal
Date of Judgment: 14.06.11

The case concerned the construction of guarantee obligations in a lease, where (it was common ground) something had gone wrong in the drafting.  As drafted part of the definition of the "liability period" applicable to the guarantors had been omitted.  At first instance, the Judge had paid particular regard to a precedent which had clearly been used by the landlord's solicitors when they had drafted the lease.  This showed what the omitted words were.  However the Court of Appeal held that this material was not admissible.  Nonetheless the Court of Appeal held that, as a matter of construction, the omitted words from the precedent ought to be read into the lease having regard to the “context” of the operative provisions.

This case emphasises the point made explicit in Chartbrook v. Persimmon Homes [2009] 1 AC 1101 that the Court, in correcting an error by construction, will not have regard to evidence which only goes to the subjective states of mind of the parties.

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