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Urban Ventures Ltd v Thomas [2016] EWCA Civ 30 – a case on ‘tacking’

The case has some interest for mortgage lenders.  A lender required a borrower to execute a fresh facility letter which included both the capital under the original facility and the fees and interest accrued thereon. Following the execution of the new facility, no monies were repaid or further monies advanced.

The second chargee claimed that the new facility did not take priority over their charge by reason of the ‘anti-tacking’ provisions in s49 Land Registration Act 2002. The Court of Appeal agreed with the first instance judge to the effect that since there was no repayment of the earlier loan or monies advanced, and the documentation did not treat the loan as having been repaid, there was not a further advance within the section.

As stated by David Richards LJ (@ para 22):

“ ……an advance is a payment of money on terms that it will be repaid……Continuing or leaving outstanding an existing loan is not the making of a new or further advance.”

Likewise, the suggestion that the new facility covered accrued arrears of interest and fees did not create, absent any express words to that effect, a further advance. The sums were required to be paid by the original facility.

The full judgment can be found on Bailii @http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2016/30.html&query=urban&method=boolean

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