Key point

Under English law the mere amendment of a first charge holder's facility documents did not constitute a "further advance" where no new money was lent even though outstanding interest and fees were added to the debt of the borrower in accordance with the amended finance documents.

The facts

D took first charges over property belonging to two companies. U took a second charge over those same properties. After U took its security D replaced its facility documents with new ones and debited certain interest and fees to the accounts of the borrowers. U claimed that the new facilities granted under the new documents and the debit in respect of the interest and fees meant that its security although second in time now had priority over D's security.

The decision

The Court did not think on the proper construction of D's facility documents that there had been any deemed repayment of the monies advanced under the original loan agreement and re-advance under the new documents. The debit of the fees and interest on their own did not constitute a further advance.


The case puts a sensible construction of what amounts to a "further advance" for the purposes of sections 48 to 50 of the Land Registration Act 2002 which regulate when further advances may be tacked onto first ranking security to ensure their priority. The mere replacement of the old facility agreement with a new one did not give rise to a deemed repayment of the old debt and a new advance.

Urban Ventures Limited v Dunbar Assets plc [2014] EWHC 1161 (Ch)