Ward v Aitken and Others; In re Oasis Merchandising Services Ltd [1996] EWCA Civ 689 (09 October 1996)

Ward v Aitken and Others; In re Oasis Merchandising Services Ltd [1996] EWCA Civ 689 (09 October 1996)

The fruits of a s.214 Insolvency Act 1986 action are not 'the property of the company' within para.6 of Sch.4, and thus cannot be assigned by the liquidator under statutory power of sale. The agreement in question is champertous and contrary to public policy, especially as it gives the funder control over the litigation, and is not saved by general powers under para.13 of Sch.4.

Citation
[1996] EWCA Civ 689
Parties
Appellant/sixth Respondent: London Wall Litigation Claims Ltd.; Applicant/liquidator: Oasis Merchandising Services Ltd. (in liquidation); Respondents: First, Second, Fourth and Fifth Respondents (former or alleged shadow directors of the Company)
Jurisdiction
England and Wales
Judgment Date
09 October 1996
Procedural Posture
Civil Appeal / Appeal From Order of Robert Walker J. Staying S.214 Insolvency Act 1986 Proceedings
Outcome
Appeal dismissed
Legal Topics
Maintenance and Champerty, Assignment of Litigation Proceeds, Liquidator's Powers, Public Policy, Company Law
Insolvency Law Contract Law Civil Procedure Maintenance and Champerty Assignment of Litigation Proceeds Liquidator's Powers Public Policy Company Law

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Parties

London Wall Litigation Claims Ltd.

Appellant/sixth Respondent

Oasis Merchandising Services Ltd. (in liquidation)

Applicant/liquidator

First, Second, Fourth and Fifth Respondents (former or alleged shadow directors of the Company)

Respondents

Procedural Posture

Civil Appeal / Appeal From Order of Robert Walker J. Staying S.214 Insolvency Act 1986 Proceedings

Legal Issues

  1. 1 Whether a liquidator can assign the fruits of a s.214 Insolvency Act 1986 action under statutory power of sale
  2. 2 Whether such an agreement is void for champerty and contrary to public policy

Ratio Decidendi

The fruits of a s.214 Insolvency Act 1986 action are not 'the property of the company' within para.6 of Sch.4, and thus cannot be assigned by the liquidator under statutory power of sale. The agreement in question is champertous and contrary to public policy, especially as it gives the funder control over the litigation, and is not saved by general powers under para.13 of Sch.4.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Respondents' costs to be paid by Appellant, to be taxed forthwith