Susan Jones appears in High Court on wonderland contractual interpretation

9th May 2016

Susan Jones, 3PB commercial law barrister appeared in the Chancery Division of High Court, Bristol Registry, in a case concerning contractual interpretation, following dismissal of an application to set aside a statutory demand for over £80,000. Susan appeared on behalf of the Creditor/Respondent at first instance and in the High Court.

At first instance the Judge found that anything other than what the Creditor suggested might be something by Lewis Carroll.

The case involved the Creditor loaning the Debtor a large sum, obtaining judgment and entering a settlement agreement for repayment. The issues turned on the true contractual interpretation of a clause setting out that, in the event that any contractual installment of the loan was missed, the creditor could commence bankruptcy proceedings.

However, contractual installments were significantly less than the bankruptcy threshold. It was therefore argued by the Appellant that the clause did not set out that the whole sum would become due in the event of default and so the statutory demand fell foul of the Insolvency Rules.

This case involved consideration of the recent Supreme Court judgment of Arnold v Britton [2015] UKSC 36.

In the High Court, Susan's submissions were accepted. She argued that an objective interpretation necessitated consideration of the agreement as a whole, alongside the wider factual context compounded by the absurd result devoid of commercial realism that the Appellant’s interpretation would produce. As the Judge commented: "the Appellants contention is devoid of commercial reality".

The Respondent’s full costs of Appeal were granted and directions were given for listing the bankruptcy petition.