Conister Trust Ltd v John Hardman & Co & Anor [2008] EWCA Civ 841 (21 July 2008)

Conister Trust Ltd v John Hardman & Co & Anor [2008] EWCA Civ 841 (21 July 2008)

The natural and ordinary meaning of 'liability' in clause 4.5 refers to enforceable obligations. Clause 4.5 does not require Hardmans to discharge liabilities under credit agreements rendered unenforceable by the Consumer Credit Act 1974. The obligation is not a guarantee, nor does section 113 of the Act apply. The appeal is allowed; Hardmans is not liable under clause 4.5 for unenforceable credit agreements.

Citation
[2008] EWCA Civ 841
Parties
First Respondent/claimant: Conister Trust Limited; Appellant/first Defendant: John Hardman & Co; Second Respondent/second Defendant: McClure Naismith (a firm)
Jurisdiction
England and Wales
Judgment Date
21 July 2008
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal allowed
Legal Topics
Construction of Contractual Terms, Enforceability Under Consumer Credit Act 1974, Indemnity and Guarantee, Solicitor Obligations, Negligent Drafting
Contract Law Consumer Credit Law Professional Negligence Construction of Contractual Terms Enforceability Under Consumer Credit Act 1974 Indemnity and Guarantee Solicitor Obligations Negligent Drafting

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Parties

Conister Trust Limited

First Respondent/claimant

John Hardman & Co

Appellant/first Defendant

McClure Naismith (a firm)

Second Respondent/second Defendant

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether 'remaining liability' under clause 4.5 of the panel solicitor agreement includes unenforceable obligations under the Consumer Credit Act 1974
  2. 2 Whether Hardmans is obliged to discharge liabilities under unenforceable credit agreements
  3. 3 Whether clause 4.5 constitutes a guarantee or indemnity

Ratio Decidendi

The natural and ordinary meaning of 'liability' in clause 4.5 refers to enforceable obligations. Clause 4.5 does not require Hardmans to discharge liabilities under credit agreements rendered unenforceable by the Consumer Credit Act 1974. The obligation is not a guarantee, nor does section 113 of the Act apply. The appeal is allowed; Hardmans is not liable under clause 4.5 for unenforceable credit agreements.

Court Disposition

Appeal allowed

Orders

  • Declaration that Hardmans is not liable under clause 4.5 for unenforceable credit agreements
  • Substitution of declaration answering the preliminary issue in the affirmative