Rust Consulting v PB

Rust Consulting v PB

The indemnity clause in the Asset Purchase Agreement is capable of including bona fide settlements or sums reasonably incurred in the defence of claims, whether successful or not. PB Limited, having caused Rust to submit to judgment, cannot deny liability under the indemnity. The appeals against both judgments below succeed and Rust is entitled to judgment for the sum claimed against PB Limited, subject to any other defences.

Parties
Appellant: Rust Consulting; Respondent: PB Limited
Jurisdiction
England and Wales
Judgment Date
05 July 2012
Procedural Posture
Civil Appeal / Second Appeal From the Queen's Bench Division
Outcome
Appeal allowed
Legal Topics
Indemnity Clauses, Intra Group Asset Transfer, Estoppel, Consent Judgment, Corporate Insolvency
Contract Law Corporate Law Insolvency Indemnity Clauses Intra Group Asset Transfer Estoppel Consent Judgment Corporate Insolvency

Case Brief

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Parties

Rust Consulting

Appellant

PB Limited

Respondent

Procedural Posture

Civil Appeal / Second Appeal From the Queen's Bench Division

Legal Issues

  1. 1 Proper construction of indemnity clause in intra-group asset transfer agreement
  2. 2 Whether consent judgment against Rust Consulting is covered by indemnity from PB Limited
  3. 3 Whether PB Limited is estopped from denying Rust's liability to Eagle

Ratio Decidendi

The indemnity clause in the Asset Purchase Agreement is capable of including bona fide settlements or sums reasonably incurred in the defence of claims, whether successful or not. PB Limited, having caused Rust to submit to judgment, cannot deny liability under the indemnity. The appeals against both judgments below succeed and Rust is entitled to judgment for the sum claimed against PB Limited, subject to any other defences.

Court Disposition

Appeal allowed

Orders

  • Judgment for Rust Consulting against PB Limited for the sum claimed, subject to any other defences