BL-2023-MAN-000072 - [2025] EWHC 2442 (Ch)

JAK’s case is that clause 13 of the Deed of Postponement is unambiguously clear to the effect that it means that JAK and Together have thereby agreed and declared that in the event of the term of the loan made by JAK to Mulbury coming to an end before the end of the term of the loan made by Together to Mulbury, then all sums due and payable to JAK will be paid to JAK notwithstanding the priority otherwise conferred upon the Together Charge by other provisions within the Deed of Postponement, thus reversing what would otherwise be the effect thereof in those particular circumstances. Thus, so JAK argues, it should, in respect of the monies due under the JAK Loan Agreement, be paid out of the net proceeds of sale of the Property in priority to Together.

It is JAK’s case that one cannot introduce considerations of commercial common sense in order to find ambiguity in the wording of clause 13 that, so it is argued, does not otherwise exist. JAK emphasises the words “will be paid” in the context of “sums due and payable by the Chargor pursuant to the Second Change”, and submits that this unambiguously points to the enforcement of security, and thus priority in respect thereof.

JAK complains that whilst it has pleaded out its case as to the meaning and effect of clause 13 in paragraphs 14 and 15 of its Particulars of Claim, Together has failed properly to engage with those paragraphs in paragraphs 18 and 19 of its Defence, or otherwise in its Defence and Counterclaim. It is said that although it asserts in paragraph 22 of its Counterclaim that clause 13 does not entitle JAK to receive the net proceeds of sale of the Property in priority to Together, it does not plead out a case as to the meaning of clause 13, or explain what, on its case, clause 13 is seeking to achieve. Points to this effect are taken in JAK’s Reply.

Together had sought to explain its case as to the meaning of clause 13 in pre-action correspondence from its Solicitors, Priority, in particular in a letter dated 24 July 2023. In this letter, it was explained that Together’s interpretation of clause 13 was that:

“…this was included as a mechanism whereby JAK could receive funds directly from the Company notwithstanding their position as second charge holder. Whilst there is nothing ostensibly within the Deed that would prevent JAK from receiving funds from the Company to redeem its charge the inclusion of clause 13 within the Deed was intended to set this out for the parties in terms.”

This line of argument was developed by Mr Demachkie, on behalf of Together, in his Skeleton Argument and in the course of submissions. In short, it was his case that clause 13 is an “avoidance of doubt” provision introduced to make clear that notwithstanding the priority provided for by the Deed of Postponement, in the event that JAK called in its loan and determined the JAK Loan Agreement prior to Together terminating the Together Loan, then it would be entitled to receive payment from Mulbury, and the debt due to it from Mulbury would not, itself, be subordinated to the debt due to Together so as to disentitle it from receiving payment before Together had been paid in full.

It was Together’s case, in short, that: