Letter of Demand in UK Law

The third step is to consider whether there is, as counsel for the Guarantors contends, a manifest error. A 'manifest error' was defined by Lewison J in IIG Capital llc v Van der Merwe [2007] EWHC 435 para 52 as one which is An issue arose as to whether the manifest error might appear from the calculation enclosed with the demand letter dated 30th May 2008 or whether it must appear on the face of the certificate.

That statement was made in the context of his earlier conclusion that there had been no variation of the Loan Agreement. But I read it as clear justification for a conclusion that if there had been a variation then there was a manifest error. Given that I would hold that there was a variation enforceable in law, then it follows, as I would hold, that there is a manifest error on the face of the certificate.

But even if there were on a strict legal view no "right to possession", for example, because the parties to the arrangement caused the documents to be held in a jurisdiction whose laws would preclude the physical possessor from handing them over to the party at whose behest he was truly acting, it would be open to the English court in such circumstances to find that as a matter of fact the documents were nevertheless within the control of that party within the meaning of CPR 31.8( 1). CPR 31.8(2) states that for the purpose of CPR 31.8(1) a party has or has had a document in his control if the case falls within paragraphs (a) to (c).

There is no absolute rule of law or practice which precludes an amendment to rely on a cause of action which has arisen after the commencement of the proceedings in circumstances where (but for the amendment) the claim would fail. The court has a discretion whether or not to allow the amendment in such a case; a discretion which is to be exercised as justice requires.

In one sense all contacts of guarantee (strictly so called) are contracts of indemnity (as indeed are many contracts of insurance) since, in its widest sense, an indemnity is an obligation imposed by operation of law or by agreement of the parties.

The fact that the obligation to indemnify is primary and independent has the effect that the principle of co-extensiveness does not apply to a contract of indemnity. The indemnity not only shifts the burden of the principal's insolvency on to the indemnifier but it also safeguards the creditor against the possibility that his underlying transaction with the principal is void or unenforceable.

Since the process of construction requires the document as a whole to be considered, the starting point must always be that the entire document should be made available to the court, and any redactions to it on grounds of irrelevance should either be forbidden or, if permitted at all, convincingly justified and kept to an absolute minimum.