L – Lien
26/4/24
MITCHELL v SHEIKH MOHAMED BIN ISSA AL JABER [2024] EWCA Civ 423
The defendant was a company director who had caused legal title to shares owned by the company to be transferred to a third party recipient, at a time when he had no power to act as a director. The defendant was held to be subject to fiduciary duties as if he had been a director [36] and liable for breach of trust for intermeddling in the company’s affairs by causing title to the shares to be registered in the name of the recipient. It made no difference that the defendant did not receive the shares personally [47]. Although he had no power to transfer the shares, the transfer had been made to appear to have taken place at a time when he had power to act as a director of the company [48] and the practical effect had been to cause the transfer to be registered and so confer legal title on the recipient [49]. On the facts, however, it had not been proved that the shares would have been sold but for the transfer [78] and since they had later lost any value, no loss was established [80]. Unless a party objects at trial that a point was not properly pleaded, it cannot be challenged on that basis on appeal [91]. The court also considered principles on which an unpaid vendor of shares can claim a lien [92]. On the facts, the parties had intended to exclude any lien arising [100]. The recipient of the shares was, however, liable for knowing receipt [103].
15/5/20
SHEIANOV v SARNER INTERNATIONAL LTD [2020] EWHC 1214 (QB)
Reviews case law on liens and concludes [80] that a particular lien (the right to retain property on which work has been done) can only operate on physical chattels, not ideas or intellectual property. Work must be done "on" the chattel being detained and not merely "with" it or "using" it or "in relation to" it. The work must improve or give additional value to the chattel. The improvement need not be physical, but it must be inherent to the chattel itself. If the agreed work is of a hybrid nature, some of which is apt to create a particular lien and some of which is not, and the work cannot be severed into those two constituent parts, no particular lien is created.
14/3/14
YOUR RESPONSE LTD v DATATEAM BUSINESS MEDIA LTD [2014] EWCA Civ 281
A service provider could not exercise a common law lien over the electronic database it had managed for the defendant. It is not possible to exercise a common law lien over intangible property.
2/11/12
RE LEHMAN BROTHERS INTERNATIONAL (EUROPE) (IN ADMINISTRATION) [2012] EWHC 2997 (Ch)
An agreement which conferred a “general lien” on company property comprising money and de-materialised securities, and a right to realise the property in satisfaction of liabilities and obligations in the event of default, did not create a lien in the strict sense because a lien can only apply to tangible property. Its effect was to create a floating charge. The charge did not fall within the Financial Collateral Arrangements (No 2) Regs 2003, because it was created before the Regs were implemented and the collateral-taker did not have sufficient possession or control of the charged property.
© Copyright 2014 Neil Levy All Rights Reserved. Disclaimer