Source: All England Reporter
Publisher Citation: [2002] All ER (D) 56 (Jan)
Neutral Citation: [2001] EWCA Civ 1966
Court: Court of Appeal, Civil Division
Judge:

Tuckey, Jonathan Parker LJJ and Crane J
Representation Dermot Woolgar (instructed by Stanley Tee, Bishops Stortford) for the claimant.
  Clifford Darton (instructed by E J Moyle, Littlehampton) for the second and third defendants.
  The first defendant did not appear and was not represented.
Judgment Dates: 30 November 2001

Catchwords

Insolvency - Voluntary arrangement - Solvent sureties - Effect of arrangement on solvent sureties - Claimant making loan to defendant - Claimant having guarantee in form of charge from sureties - Defendant becoming insolvent - Defendant's creditors agreeing to voluntary arrangement - Claimant claiming voluntary arrangement reserved rights against sureties - Judge finding interpretation of voluntary arrangement limited to arrangement itself - Whether judge able to interpret voluntary arrangement on basis of material other than arrangement itself - Whether arrangement reserving rights against sureties.

The Case

In interpreting an individual voluntary arrangement made under of the Insolvency Act 1986 the court should look at all the circumstances, including the dealings between the parties which had led to the arrangement. Furthermore, there was no distinction between the position of a surety and that of a co-debtor and accordingly it was open to a creditor to release a debtor by way of an individual voluntary arrangement whilst reserving its rights against a surety.

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