Cluttons LLP v Regis Group plc (2012) (CA)
A firm of surveyors (F) managed a portfolio of properties for one of its clients. Pursuant to an agreement between F, Regis and one of Regis' subsidiary companies, F subcontracted management to the Regis subsidiary. In return, Regis guaranteed to F that the subsidiary would perform its obligations and agreed to indemnify F in the event the subsidiary failed to do so.
F's business was subsequently acquired by Cluttons. The client made a claim against F in relation to the Regis subsidiary's management of its properties. This claim was settled by F, who was reimbursed by Cluttons. Cluttons then sought to recover the sums paid from Regis under the guarantee Regis had given.
The Recorder concluded that Regis was liable to Cluttons pursuant to the guarantee originally given to F. Regis appealed contending the benefit of the guarantee remained with F and did not pass to Cluttons.
The Court of Appeal upheld the Recorder's decision and concluded that Cluttons had been assigned, by way of an equitable assignment, the benefit of Regis' guarantee and was entitled to enforce it to recover the payment made to the client.
Comment
The case highlights the importance of including express non-assignment provisions if the intention is to prevent the other party from assigning the benefit of a contract.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
