Scottish Widows Plc v Stewart [2006] EWCA Civ 999 (14 July 2006)

Scottish Widows Plc v Stewart [2006] EWCA Civ 999 (14 July 2006)

The Court of Appeal held that the business and cause of action for damages were with the second company at the relevant time, and there was no effective reassignment or contract to reassign the cause of action to the first company. RS, as assignee of the first company, was not entitled to damages for losses suffered by the second company. The appeal by Scottish Widows was allowed. The cross-appeal on the re-letting point was dismissed, as the agreement with Midnight Design constituted a licence, not a tenancy, and did not amount to 're-letting' under the guarantee clause.

Citation
[2006] EWCA Civ 999
Parties
Appellant: Scottish Widows plc; Respondent: Stewart
Jurisdiction
England and Wales
Judgment Date
14 July 2006
Procedural Posture
Appeal From Queens Bench Division / Court of Appeal (civil Division) Judgment
Outcome
Appeal allowed; cross-appeal dismissed
Legal Topics
Assignment of Business, Breach of Lease Covenants, Damages for Loss of Profits, Re Letting and Guarantee Liability, Corporate Structure and Reassignment
Property Law Contract Law Company Law Assignment of Business Breach of Lease Covenants Damages for Loss of Profits Re Letting and Guarantee Liability Corporate Structure and Reassignment

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Parties

Scottish Widows plc

Appellant

Stewart

Respondent

Procedural Posture

Appeal From Queens Bench Division / Court of Appeal (civil Division) Judgment

Legal Issues

  1. 1 Whether losses were sustained by the first or second company
  2. 2 Whether assignment and reassignment of business and cause of action occurred
  3. 3 Entitlement to damages for breach of lease covenants

Ratio Decidendi

The Court of Appeal held that the business and cause of action for damages were with the second company at the relevant time, and there was no effective reassignment or contract to reassign the cause of action to the first company. RS, as assignee of the first company, was not entitled to damages for losses suffered by the second company. The appeal by Scottish Widows was allowed. The cross-appeal on the re-letting point was dismissed, as the agreement with Midnight Design constituted a licence, not a tenancy, and did not amount to 're-letting' under the guarantee clause.

Court Disposition

Appeal allowed; cross-appeal dismissed

Orders

  • Scottish Widows' appeal allowed; RS not entitled to damages as assignee of the first company
  • Cross-appeal on re-letting point dismissed; agreement with Midnight Design was a licence, not a tenancy