Marsden v Elston & Anor [2001] EWCA Civ 1746 (5 November 2001)

Marsden v Elston & Anor [2001] EWCA Civ 1746 (5 November 2001)

The court held that the implied term accepted by the trial judge, requiring the defendants to provide substitute security if necessary, was inconsistent with the express terms of the contract and went beyond what was necessary for business efficacy. The only proper implied term would be to use best endeavours, but there was no evidence of breach causing loss. However, the claimant was entitled to contribution from the co-sureties as a matter of law, regardless of any settlement offers he declined.

Citation
[2001] EWCA Civ 1746
Parties
Claimant/respondent: Vincent Marsden; Defendant/appellant: Leonard Charles Elston; Defendant/appellant: Leslie Peter Daws
Jurisdiction
England and Wales
Judgment Date
05 November 2001
Procedural Posture
Civil Appeal / Appeal From County Court Judgment
Outcome
Appeal allowed in part; trial judgment set aside; judgment for claimant on contribution claim only
Legal Topics
Implied Terms, Contribution Between Co Sureties, Directors' Duties, Redundancy Agreements
Contract Law Equity Implied Terms Contribution Between Co Sureties Directors' Duties Redundancy Agreements

Case Brief

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Parties

Vincent Marsden

Claimant/respondent

Leonard Charles Elston

Defendant/appellant

Leslie Peter Daws

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From County Court Judgment

Legal Issues

  1. 1 Whether the November 1993 agreement was between the claimant and the company or also with the co-directors personally
  2. 2 Whether an implied term existed requiring the defendants to use best endeavours or provide substitute security to secure the claimant's release from a guarantee
  3. 3 Whether the claimant was entitled to damages or only to contribution as a co-surety

Ratio Decidendi

The court held that the implied term accepted by the trial judge, requiring the defendants to provide substitute security if necessary, was inconsistent with the express terms of the contract and went beyond what was necessary for business efficacy. The only proper implied term would be to use best endeavours, but there was no evidence of breach causing loss. However, the claimant was entitled to contribution from the co-sureties as a matter of law, regardless of any settlement offers he declined.

Court Disposition

Appeal allowed in part; trial judgment set aside; judgment for claimant on contribution claim only

Orders

  • Set aside order for £42,105.26 plus interest and costs
  • Substitute judgment for claimant for £8,251.49 plus interest of £2,734.56