Two related companies, in administration, asked the court to rule on two preliminary points of law, en route to some wider litigation.
The companies had, before administration, contracted to sell land to a third party. A secured lender intervened and purported to appoint receivers over it – and they purported to complete the sale. There was an immediate on-sale to S, the defendant who thought it now owned the property.
However, whilst correctly identifying the properties in question, the receivership appointment named the wrong chargor: not the actual chargors of the two properties, but a related company which had provided different security over its own, different assets.
The administrators challenged the validity of the appointment on this basis, and also the validity of the sale contract, saying it had been incorrectly signed by the director. The administrators succeeded on the first point but failed on the second.
The court considered the well-established principles as to when it can let a party navigate around mistakes in documents.
This was not a basic question of contractual interpretation: there were not competing meanings to the words on the face of the appointment. They had a plain (if wrong!) meaning. And for various procedural reasons, the court could not consider “rectification”, a remedy which might otherwise allow it to re-write the incorrect wording.
The defendant’s only hope was via “construction to amend an obvious mistake”. Following the previous case of Chartbrook, an obvious mistake could be recast as a reference to the one, obvious correct meaning. But on the facts, while it seemed most likely that the lender meant to name the correct chargors, matching them to the named properties, it was possible (not least because of how the related Companies House filings were made) that the mistake instead lay in the description of the appointment assets - that the chargor was correctly named after all, and the appointment was intended to be over its assets. There was no single obvious correction, and therefore Chartbrook could not come to the defendant’s rescue.
The receivership appointment over the properties was therefore invalid; and while not stated in this limited preliminary ruling, this will have implications for the defendant’s title to the properties - although its seller (the receivers’ purchaser) potentially does still have a binding contract for purchase.
While not a purely insolvency/enforcement point, and so mentioned only in passing here, the court also looked at how the sale contract had been signed by the companies’ director in the first place - whether there was any practical difference between “by” and “on behalf of” in sections 43 and 44 of the Companies Act 2006; and whether the precise place of a director’s signature in a pre-typed execution block really mattered. The short answer for these purposes, glossing over a lot of detailed analysis in the judgment, was very much no.
BLCP Eden 1 Limited (in administration) and another v Rooksmead Securities Ltd and others [2026] EWHC 1268 (Ch)
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