Lombard Finance Ltd v Brookplain Trading Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,MR. JUSTICE THORPE |
| Judgment Date | 04 December 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J1204-7 |
| Docket Number | 90/1151 |
| Court | Court of Appeal (Civil Division) |
| Date | 04 December 1990 |
and
and
[1990] EWCA Civ J1204-7
Lord Justice Dillon
and
Mr. Justice Thorpe
90/1151
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE OXFORD COUNTY COURT
(Mr. Recorder Newbold)
Royal Courts of Justice
MR. M. JACKSON (instructed by Messrs Wilde Sapte) appeared on behalf of the Respondent (Plaintiff).
MR. HODGE MALEK (instructed by Messrs Russell Jones & Walker) appeared on behalf of the Appellant (Second Defendant).
The First and Third Defendants did not appear and were not represented.
This is an appeal by the second defendant in in the action, Mr. John Richardson, against a decision of Mr. Recorder Newbold made in the Oxford County Court on 5th April of this year. The order of the judge on that occasion was that there be judgment for the plaintiffs, Lombard Finance Limited, against Mr. Richardson in a sum of £5,090.65 plus interest of £4040.26 pence with costs. There were two other defendants besides Mr. Richardson, the first a company called Brookplain Trading Limited and the third a Mr. Peter Faull. Mr. Richardson and Mr. Faull were directors of that company, which failed many years ago, and the action against them was on a guarantee of liabilities of the company to Lombard. The nature of the transaction was that the company wanted to buy some photocopying equipment from a company called Marlborough Management Services Limited, not by a cash payment but by a leasing arrangement with Lombard Finance Limited; in other words Marlborough sold the equipment to Lombard, which leased it to the company, and there is a leasing agreement.
The guarantee in question, which is dated 6th May 1983, is addressed to Lombard, and prominently marked at the top "blanket guarantee." The printed part provides:
"In consideration of your entering from time to time into agreements with the companies and/or persons listed in the Schedule hereto or any of them (each of which is hereinafter called 'the customer') as I/we hereby ask you to do
I/We jointly and severally
(1) hereby guarantee the punctual payment to you of all sums that become payable to you by the customer under such agreements and the due performance and observance by the customer of all the terms and conditions of such agreements."
Then there is an agreement that Lombard's rights under the guarantee are not to be affected by granting time or other indulgence, or by any variation of the terms of the agreements, and there is agreement that each agreement shall be treated as a separate transaction for the purposes of the guarantee and that the signatories' liability would be settled immediately on demand. The back of the document, which is again referred to as a guarantee, is signed by both Mr. Richardson and Mr. Faull as directors and both signatures are witnessed by a Mr. Richard Lightfoot who was at that time a salesman employed by Marlborough Management Services Limited. It is accepted that Mr. Richardson and Mr. Faull signed the guarantee when they met Mr. Lightfoot on 6th May 1983 and it is accepted that in presenting the guarantee to them for signature Mr. Lightfoot was acting as an agent for Lombard.
As I have said, the company failed in meeting its obligations under the leasing agreement and Mr. Richardson and Mr. Faull were called on to pay under the guarantee.
The defences put forward by Mr. Richardson, who appeared in person without legal representation in the court below, were three-fold and the first and most important was that the document he signed had been altered after he had signed it, with the result that it became no longer binding on him. The two alternative defences he put forward run together. They were that when he and Mr. Faull signed the guarantee they were so drunk that they did not know what they were doing because they had been drinking gin for a couple of hours in a public house, and also that they signed it because Mr. Lightfoot falsely represented to them that it was a delivery note and, while it may seem stupid that anyone could suppose that a document so prominently labelled 'blanket guarantee' was a delivery note, their condition of intoxication made them ready to sign anything that they were told was something as inoccuous as a delivery note without paying much attention to it. Mr. Richardson said that he never intended to sign any guarantee and in previous dealings with Lombard no guarantee had been required. Those two defences were rejected by the learned recorder who, on the facts, preferred the evidence of Mr. Lightfoot.
The alteration that was made to the guarantee was as follows. The guarantee is a printed form which had been partly filled in in ink in Lombard's offices before it was sent to Mr. Lightfoot to get it signed by Mr. Richardson and Mr. Faull. The name of the company was Brookplain Trading Limited, but in the schedule as prepared in Lombard's offices it was erroneously set out as Brookplain Trading Company Limited. The alteration was that the word 'company' was struck out in the schedule and there are certain squiggles over the deletion which, if they are anything, would seem to have been intended to represent initials to indicate that the parties concerned agreed the deletion. They are in a different ink from the writing on the front of the form as sent out from Lombard's offices. That is in blue and the squiggle and the striking-out are in black.
The case as to the effect of such an alteration after execution is put under two headings. Firstly there is a long established line of authority stemming from Pigot's case (1614) 11 Co.Rep. 266, to the effect that any alteration, not approved by all the parties to the original document, made to a deed or other instrument after the execution of that instrument or deed render it void. It is said that this alteration, which was not made or approved by Mr. Richardson or Mr. Faull but made by someone after Mr. Richardson and Mr. Faull had signed it and departed, must render it void.
As to that, the rule in Pigot's case has for at least a century been held to be applicable only where the alteration made was a material alteration. That is established by Aldous v. Cornwell (1868) L.R. 3 Q.B. 573 and Crediton (Bishop) v. Exeter (Bishop) [1905] 1 Ch.455. This particular alteration by the deletion of the word "company" is not in my judgment a material alteration. Even if the word 'company' had never been struck out, the guarantee could have been enforced against Mr. Richardson and Mr. Faull, because plainly the company referred to in the guarantee must have been the company of which Mr. Richardson and Mr. Faull were said to be directors and that was Brookplain Trading Limited. There could not have been any other company with the name Brookplain Trading Company Limited. It is therefore a mere immaterial misdescription which can be cured by evidence. The case is similar to the decision in Re Howqate and Osborn's Contract [1902] 1 Ch.451 where it was held to be immaterial in a mortgage, which was on its face in favour of three individuals, one of whom was described as 'William Gray', that the name 'William' had been struck out and the correct christian names 'Edward Thomas' had been inserted instead. It was a mere misdescription and it could be proved by parol evidence that the person described as William Gray was really Edward Thomas Gray. Pigot's case therefore does not help Mr. Richardson.
However Mr. Hodge goes further and says that the document, even if initially valid, became a forgery and a nullity when the squiggles were put on, which appear to be initials, including initials purporting to be those of Mr. Richardson himself.
The judge's findings in respect of the initials are somewhat ambiguous. He had clear evidence from a handwriting expert, a Mr. Radley, that the writing of the squiggles was not the writing of Mr. Richardson or Mr. Faull. There...
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