A – Assignment of receivables
3/7/15
MORRIS v ROYAL BANK OF SCOTLAND [2015] EWHC (Ch)
Clauses in a debenture granted by a company to a bank restricted the company from disposing of charged property without the bank’s consent. On the proper construction of the debenture, the property charged by the debenture included claims against the bank itself. A purported assignment of those claims to the claimant was therefore ineffective. It was not arguable that the restrictions in the debenture were unenforceable on public policy grounds or as unreasonable exclusion clauses. The bank was granted summary judgment dismissing the claims.
13/1/14
STOPJOIN PROJECTS LTD v BALFOUR BEATTY ENGINEERING SERVICES (HY) LTD [2014] EWHC 589 (TCC)
A sub-contractor had purported to assign its book debts to a factoring company. The sub-contracts prohibited assignment so the claim based on the assignment was struck out. But a claim that the failed assignment gave rise to an implied trust of the book debts in its favour was arguable and would not be struck out.
14/11/13
TFL MANAGEMENT SERVICES LTD v LLOYDS BANK PLC [2013] EWCA Civ 1415
The judge below had been wrong to grant summary judgment dismissing the claimant’s claim that the bank was liable in restitution to compensate a company for legal costs which the company had incurred in seeking to recover monies from a third party which were ultimately held to be book debts charged to the bank. The principle of incidental benefit on which the Judge had relied was not sufficiently established and although there were powerful arguments against the claim, the question whether the Bank benefited from the company’s claim and whether the company took the risk that the book debts might not belong to the company, required investigation at trial.
CommentTFL MANAGEMENT SERVICES LTD v LLOYDS TSB BANK PLC [2013] EWHC 772 (Ch)
A bank was not liable in restitution to compensate a company for legal costs which the company had incurred in seeking to recover monies from a third party which were ultimately held to be book debts charged to the bank. Although the company had mistakenly believed it had the right to payment under an asset sale agreement, the bank had not been a party to the proceedings taken by the company against the third party and any benefit to the bank of the proceedings was not a direct benefit but only incidental. In those circumstances the bank could not be said to have been unjustly enriched by the action taken by the company.
24/10/12
BEXHILL UK LTD v RAZZAQ [2012] EWCA Civ 1376
A company which had given a bank a debenture containing an assignment to the bank of its receivables, was not entitled to enforce a legal charge securing a debt owed to the company by a third party without joining the bank. On its true construction, the debenture operated as an absolute assignment, not an assignment by way of charge only. Notice of the assignment had not been given to the guarantor, so it only took effect in equity. The bank as equitable assignee had the right to sue and had not authorised the company to sue as its agent. For the proceedings to be continued, the bank would have to be joined as a party.
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