Fshc Group Holdings Ltd v Glas Trust Corporation Ltd [2019]

Fshc Group Holdings Ltd v Glas Trust Corporation Ltd [2019] EWCA Civ 1361— 31 July 2019 (Flaux LJ, Leggatt LJ, Lady Justice Rose)

“As part of a complex corporate transaction, the Claimant was to provide an Assignment to the Bank, by way of security. It emerged some years later that it had omitted to do so therefore it issued 2 deeds in favour of the Bank with the effect of replacing the missing security but also imposing additional, onerous obligations on the Claimant. The High Court found that the additional obligations were the result of a common mistake (both subjectively and objectively) and ordered rectification of the deeds. The Bank appealed arguing that the sole test was an objective one, and moreover one going to the legal rather than mere commercial effect of the agreement. The CA disagreed, ruling that a subjective common mistake as to legal consequences was sufficient — and established — although the objective test was also met. Relevant factors in both were that this was not a new agreement, the commercial absurdity of gratuitously taking on additional obligations and the absence of discussion about such a radical modification to the previous arrangements.”

Louise Glover
E. G. Arghyrakis & Co.
07th August 2019