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Friday 20 November 2015

MH Corporate

Indemnities and interpretation: a case of cats and dogs

The recent Court of Appeal decision Wood v Sureterm Direct Ltd & Capita Insurance Services Ltd [2015] EWCA Civ 839 considered how to interpret an indemnity clause in a sale and purchase agreement, overturning the High Court decision. The Court examined its role in interpreting a contract between parties where the language was capable of having more than one meaning, finding that it is not for the courts to improve a party’s bad bargain where it would undermine the importance of the natural language used.

The Good, the Bad and the Faithful

The case of Portsmouth City Council v Ensign Highways Ltd [2015] EWHC 1969 (TCC) considered whether a duty to act in good faith could be implied into the Council’s dealings with its service provider (Ensign).

Illegality considered – the case of Jetivia SA and another v Bilta (UK) Ltd

In the recent case Jetivia SA and another v Bilta (UK) Ltd [2015] UKSC 23 (“Jetivia v Bilta”) the Supreme Court considered the application of the illegality defence.

Through its liquidators, an insolvent English company, Bilta (UK) Limited (“Bilta”), brought claims against its directors for unlawful means conspiracy involving them breaching their fiduciary duties and against a Swiss company, Jetivia SA (“Jetivia”) and its sole French director for dishonestly assisting them. Jetivia and its directors applied to strike out Bilta’s claim on the basis of the “illegality defence”, the principle that the courts will not assist a claimant whose claim is only possible due to the claimant’s own illegal action.

Corporate Update: Recovery of avoided loss and collateral benefits

The case of Swynson Limited v Lowick Rose LLP [2015] EWCA Civ 629 on appeal to the Court of Appeal concerned an amount of damages recoverable by a lender from a negligent firm of accountants which failed to perform a proper exercise of due diligence on the borrower to whom monies were lent on reliance on that negligent advice. The loan was repaid by using money lent to the borrower by the owner of the lending company. At first instance the High Court held that repayment was a collateral matter which did not go to reduce the damages recoverable by the lender from the negligent accountants. The appeal concerned, amongst other matters, whether damages due for that negligence could be reduced by “avoided loss”. The avoided loss came about through the repayment to the borrower of the two initial loans through the issue of a third refinancing loan from the borrower’s owner undertaken principally for tax reasons.

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