Cherry Tree Investments Ltd v Landmain Ltd [2013]

Cherry Tree Investments Ltd v Landmain Ltd [2013]

Cherry Tree Investments Ltd v Landmain Ltd [2013] Ch 305 is a UK company law case that delves into the interpretation of articles of association and the admissibility of extrinsic evidence in such matters.

Cherry Tree Investments Ltd faced a challenge when it failed to register a facility agreement with HM Land Registry. Landmain contested the validity of the transfer, leading to a legal dispute. The Court of Appeal, in its judgment, ruled that the transfer was invalid. Lewison LJ, in delivering the judgment, highlighted the test for the interpretation of articles of association.
  1. Articles are considered to be addressed to individuals who were not part of the initial agreement.
  2. They are regarded as applicable to third parties and shareholders at the time of notice.
  3. Registration provides constructive notice of the articles' contents to the entire world.
  4. Extrinsic evidence is entirely excluded from the interpretation of articles of association.
  5. Articles cannot be rectified by the court.

Despite the stringent stance in Cherry Tree, a more permissive approach to extrinsic material was observed in the case Cosmetic Warriors v Gerrie [2015]. In Cosmetic Warriors, the admissible background for construction was limited to what any reader of the articles would reasonably be supposed to know. This indicates a nuanced perspective on the use of extrinsic evidence in different cases.

Cherry Tree Investments v Landmain establishes a clear position on the exclusion of extrinsic evidence in interpreting articles of association. However, the legal landscape continues to evolve, as evidenced by subsequent cases like Cosmetic Warriors v Gerrie, reflecting a more flexible approach in certain contexts.
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