Phoenix Group Foundation v Harbour Fund II LP & Ors [2023] EWCA Civ 36 (20 January 2023)

Phoenix Group Foundation v Harbour Fund II LP & Ors [2023] EWCA Civ 36 (20 January 2023)

The Court held that the LICSA did not amount to an immediate and irrevocable equitable assignment by SMA to Phoenix of its future rights to distributions from the Arena Holdcos' liquidations. The language of the LICSA imposed only a personal procurement obligation on Dr. Cochrane, not a direct assignment by SMA. There was no clear intention by SMA to divest itself of its future rights, no security or reassignment provision, and the subject matter was not sufficiently certain. The absence of a direct payment direction to the Joint Liquidators and the structure of the documents supported this conclusion.

Citation
[2023] EWCA Civ 36
Parties
Appellant/eighth Respondent: Phoenix Group Foundation; Respondents: Harbour Fund II LP and others (Settlement Parties)
Jurisdiction
England and Wales
Judgment Date
20 January 2023
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed
Legal Topics
Equitable Assignment, Trusts, Priority of Claims, Interpretation of Contracts, Assignment of Future Property
Equity Commercial Law Insolvency Equitable Assignment Trusts Priority of Claims Interpretation of Contracts Assignment of Future Property

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Parties

Phoenix Group Foundation

Appellant/eighth Respondent

Harbour Fund II LP and others (Settlement Parties)

Respondents

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether the LICSA constituted a valid equitable assignment by SMA to Phoenix of future rights to distributions from the Arena Holdcos' liquidations under section 207(3) BVI Insolvency Act 2003.
  2. 2 Whether the absence of direct assignment language or security/reassignment provisions in the LICSA precluded an immediate and irrevocable equitable assignment.
  3. 3 Whether the subject matter of the purported assignment was sufficiently certain.

Ratio Decidendi

The Court held that the LICSA did not amount to an immediate and irrevocable equitable assignment by SMA to Phoenix of its future rights to distributions from the Arena Holdcos' liquidations. The language of the LICSA imposed only a personal procurement obligation on Dr. Cochrane, not a direct assignment by SMA. There was no clear intention by SMA to divest itself of its future rights, no security or reassignment provision, and the subject matter was not sufficiently certain. The absence of a direct payment direction to the Joint Liquidators and the structure of the documents supported this conclusion.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Phoenix Group Foundation is dismissed.
  • The declaration that future distributions to SMA will be held on trust by SMA on the terms of the Harbour Trust stands.