Shaw v Doleman

Shaw v Doleman

The liability of the guarantor under the Authorised Guarantee Agreement survived the disclaimer of the lease by the assignee's liquidator. Section 178(4)(b) of the Insolvency Act 1986, as interpreted in Hindcastle, deems the assignee to remain bound by the tenant covenants for the purposes of the guarantee, unless the AGA expressly provides for termination on disclaimer, which it did not in this case. Thus, the 'Liability Period' continued and the guarantor remained liable.

Parties
Appellant: Gabriella Shaw; Respondent: Hazel Doleman
Jurisdiction
England and Wales
Judgment Date
01 April 2009
Procedural Posture
Civil Appeal / Appeal From County Court to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Effect of Disclaimer by Liquidator, Guarantee Liability Under Lease, Interpretation of Authorised Guarantee Agreements, Section 178(4) Insolvency Act 1986, Landlord and Tenant (covenants) Act 1995
Landlord and Tenant Law Insolvency Law Contract Law Effect of Disclaimer by Liquidator Guarantee Liability Under Lease Interpretation of Authorised Guarantee Agreements Section 178(4) Insolvency Act 1986 Landlord and Tenant (covenants) Act 1995

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Parties

Gabriella Shaw

Appellant

Hazel Doleman

Respondent

Procedural Posture

Civil Appeal / Appeal From County Court to Court of Appeal

Legal Issues

  1. 1 Does the liability of a guarantor under an Authorised Guarantee Agreement (AGA) survive the disclaimer of a lease by the assignee's liquidator?
  2. 2 How should the 'Liability Period' in the AGA be construed in light of section 178(4) of the Insolvency Act 1986?

Ratio Decidendi

The liability of the guarantor under the Authorised Guarantee Agreement survived the disclaimer of the lease by the assignee's liquidator. Section 178(4)(b) of the Insolvency Act 1986, as interpreted in Hindcastle, deems the assignee to remain bound by the tenant covenants for the purposes of the guarantee, unless the AGA expressly provides for termination on disclaimer, which it did not in this case. Thus, the 'Liability Period' continued and the guarantor remained liable.

Court Disposition

Appeal dismissed

Orders

  • Judgment for the respondent (landlord) for the sum of £16,921.87 and costs.