“2. Upon the Trustee taking possession of the Transfer Properties and the Additional Properties, the Interim Receiving Order granted by Mr Justice Stanley Burnton on26 October 2005 (POCA No. 8611 of 2005) (the “Interim Receiving Order”) shall be discharged as against any of those assets listed at Annexe A to Schedule 4 hereto or any other asset listed in Appendix 2 to the Interim Receiver’s Report dated18 August 2006 . …… 4. Immediately after the vesting order made in paragraph 1 above takes effect, all further proceedings in this claim by the Claimant against the Compromising Defendants to the assets listed at Annexe A to Schedule 4 hereto, any other asset listed in Appendix 2 to the Interim Receiver’s Report dated18 August 2006 and any asset of the Compromising Defendants of a value less than£20,000 (but, for the avoidance of doubt, excluding those aspects of the claim referred to at paragraph 5 below) be stayed upon the terms set out in Schedule 4 hereto save for the purpose of carrying such terms into effect and for that purpose the Claimant and the Compromising Defendants have permission to apply.”
“in full and final settlement of all of the Director’s claims against the Respondents in relation to the properties and the other assets listed in Annexe A to this Deed, the Tax Liabilities of John Szepietowski and Susan Szepietowski as defined in paragraph 13 below, any other asset listed in Appendix 2 to the Interim Receiver’s Report dated 18August 2006 and any asset of an individual value less than£20,000 (together the “Settled Claim”).”
“The Director agrees that if, once all of the Transfer Properties are sold and all encumbrances are discharged, the Director receives funds amounting to more than£5,375,000.00 (Five Million Three Hundred and Seventy Five Thousand Pounds) then the Director will pay such excess, up to a maximum of£27,679.97 back to the Respondents (by way of a payment made to Devonshires Solicitors.”
“31. This brings me on to a more general point. Looking at the Consent Order and the Settlement Deed as a whole, it appears to me that, for the purposes of the compromise, the parties drew a clear distinction between Ashford House on the one hand and the other four properties subject to the RBS charge on the other hand. Ashford House was one of the released properties and, as I have already said, the figure shown for the debt charged upon it in Annexe A to the Settlement Deed must exclude most, if not all, of the RBS debt. Furthermore, the deed was made in full and final settlement of all of SOCA's claims against Mrs. Szepietowski in relation to, among other properties, Ashford House: see para.2.1. The main such claim was obviously SOCA's claim that Ashford House was recoverable property, but the wording of para.2.1 is wide and general, and my provisional view (although I have not heard argument directed to this specific point) is that it is wide enough to rule out any claim by SOCA to be granted security by Mrs. Szepietowski on Ashford House. 32. There would be nothing inherently surprising in the parties having agreed to exclude Ashford House in this way. It was, and is, the Szepietowskis' home where they live with their young family, one of whom has special needs. In January 2008, nobody foresaw the crash in the property market with which we are now all too familiar, and, on the basis of the figures set out in the schedules to the Consent Order, there appeared to be ample equity in the other four properties to discharge the RBS debt in full. One would indeed expect the unconditional release of Ashford House to have been a key feature of any compromise acceptable to the Szepietowskis.”
“Finally, Ms. Harman argued that even if, on the true construction of para.4.5, Mrs. Szepietowski could only be required to grant a charge over the Additional Properties, the court should still order her to do so, and should not take the short cut of simply directing that the net proceeds of sale of the Additional Properties should be paid to RBS. The reason for this, as Ms. Harman made clear, is that SOCA intends in due course to rely on the equitable doctrine of marshalling and, in broad terms, will ask the court to direct that RBS should satisfy its charge out of Ashford House (on which SOCA would, on this hypothesis, not have a charge) in priority to the Additional Properties (on which both SOCA and RBS would have a charge) or, alternatively, to order that SOCA should be subrogated to the rights of RBS in relation to Ashford House if that security were the first to be realised by RBS: see generally Fisher and Lightwood's Law of Mortgage, 12th edition, paras.45.8 to 45.12, and Halsbury's Laws of England, 4th edition, volume 32, paras.833 to 836.”
“What the wording of paragraph 4.5 did in my judgment reflect, like the Annexes, was a common intention and expectation that the Bank's debt would be satisfied by the sale of either or both of the Claygate Properties and the Remaining RBS Properties. But as Miss Harman for SOCA submitted, a common intention and expectation of that nature is not the same thing as a contractually binding agreement that Mrs Szepietowski's debt to the Bank was to be regarded for the purposes of the compromise as being charged only on the Claygate Properties and the Remaining RBS Properties, to the exclusion of Ashford House. The need for such an agreement to be clearly expressed was all the stronger, in my view, because the Bank was not a party to the compromise, and the parties could not by agreement between themselves release Ashford House from the Bank's second charge. An agreement between the parties to proceed on the footing that Ashford House was released from the Bank's charge was, no doubt, conceptually possible, but if they had intended to contract on that basis one would expect them to have said so explicitly, and not to have left such an important point to be gathered from the indications relied upon by Mr Mitchell.”
“But it is the ordinary case to say that a person having two funds shall not by his election disappoint the party having only one fund, and equity, to satisfy both, will throw him, who has two funds, upon that which can be affected by him only, to the intent that the only fund, to which the other has access may remain clear to him.”