Shaw v Doleman [electronic resource]
Shaw v Doleman [electronic resource]
- 2009
[2009] EWCA Civ 279, 1 April 2009. Case highlights that the wording common in Authorised Guarantee Agreements (AGAs) may not mean what the tenant thinks it means. An appellant tenant of a retail unit (S) appealed against a decision that she was liable to pay arrears of rent and of insurance rent to the respondent landlord (D). S had assigned the tenancy to a third party (C) and at the same time executed an AGA. The AGA required S to guarantee the assignee C 's liability under the lease 'throughout the period during which the Assignee is bound by the tenant covenants of the lease'. C went into liquidation. The liquidator disclaimed the lease. A dispute arose over where the loss lies on the insolvency of the corporate assignee - on the landlord or on the guarantor? Held: appeal dismissed. The disclaimer terminated the lease and the liability of the assignee company, but that did not affect the liabilities of any other person. Although the lease was terminated, S was still bound by the tenant covenants as though it had not been. Hindcastle Ltd v Barbara Attenborough Associates Ltd applied. Those who draft or check the wording of AGAs would be wise to consider their wording carefully.
SHAW V DOLEMAN
HINDCASTLE LTD V BARBARA ATTENBOROUGH ASSOCIATES LTD
INSOLVENCY ACT 1986 S178(4)(B)
England and Wales--1543-
[2009] EWCA Civ 279, 1 April 2009. Case highlights that the wording common in Authorised Guarantee Agreements (AGAs) may not mean what the tenant thinks it means. An appellant tenant of a retail unit (S) appealed against a decision that she was liable to pay arrears of rent and of insurance rent to the respondent landlord (D). S had assigned the tenancy to a third party (C) and at the same time executed an AGA. The AGA required S to guarantee the assignee C 's liability under the lease 'throughout the period during which the Assignee is bound by the tenant covenants of the lease'. C went into liquidation. The liquidator disclaimed the lease. A dispute arose over where the loss lies on the insolvency of the corporate assignee - on the landlord or on the guarantor? Held: appeal dismissed. The disclaimer terminated the lease and the liability of the assignee company, but that did not affect the liabilities of any other person. Although the lease was terminated, S was still bound by the tenant covenants as though it had not been. Hindcastle Ltd v Barbara Attenborough Associates Ltd applied. Those who draft or check the wording of AGAs would be wise to consider their wording carefully.
SHAW V DOLEMAN
HINDCASTLE LTD V BARBARA ATTENBOROUGH ASSOCIATES LTD
INSOLVENCY ACT 1986 S178(4)(B)
England and Wales--1543-