“Only on receipt of Haden Young’s official order number and countersigned G. Articles of Agreement does any contract exist between our companies.”
“Assignment or subletting E. (1) The subcontractor shall not without the prior written consent of the contractor wholly or partly assign this subcontract or any benefit or interest hereunder and shall not without the written consent of the contractor sublet any portion of the subcontract works. Such consent shall not relieve the subcontractor from his obligations under the subcontract and he shall remain fully liable for the proper execution of the subcontract works. F (2). The subcontractor shall not assign either absolutely or by way of charge any sum which is or may become due and payable to him under this subcontract without the prior written consent of an officer of the contractor.”
“Mr Warren and Sports Network limited as beneficial owners hereby assign to the partnership with effect from the date hereof the full benefit and burden of all existing promotional and management agreements with boxers together with all and any associated sponsorship, closed circuit television D. and radio contracts absolutely. Such contracts shall be assigned to the partnership free and clear of any and all liens or encumbrances and, save as expressly provided herein, free of charge and without any recourse whatsoever.” 45. It was held by Lightman J that the first agreement was ineffective to procure the E. transfer which the parties had desired for two reasons. The first was that it was legally impossible to assign the burden of the contracts. The second was that the contracts were contracts for personal services based on the personal mutual confidence between the boxer and the promoter and manager, so it was not possible to assign them. Having been advised that there might be a difficulty, the parties entered into a second agreement in April 1995 with the aim of solving the problem. Clause 7 of the second F agreement was in these terms: “7.1 SNE shall procure that Mr Warren and Sports Network Limited, as appropriate, shall apply for and hold all licences for the benefit of the partnership absolutely without separate compensation therefor. 7.2 DKP or SNE as appropriate shall procure that Don King, Mr Warren or G Sports Network Limited as appropriate shall hold all promotional and management agreements relating to the business of the partnership as defined in clause 3 to the benefit of the partnership absolutely without separate compensation therefor.”
“In my view, the conclusion is ... largely dictated by the chronology. There can be no doubt that it was the intention of the parties, as demonstrated by clause 6.1 of the first agreement that the full benefit of the management and promotional agreements between Mr Warren (or his corporate vehicle) and a European registered boxer existing on16th September 1994 should be partnership property. Such an intention is reflected in the provisions of clause 7.1, which assume that the full benefit of such agreements is an asset of the partnership to be distributed in specie to Mr Warren. ... Given the terms of clause 6.1 of the first agreement and the legal inability of Mr Warren to assign the benefit of the agreement to the partners jointly, a trust within clause 1 was the only way the evident intention of the partners could be achieved. For the reasons I have given earlier, the fact that the benefit of the agreements could not be sold and were otherwise unassignable is no reason to refuse to recognise the trust which was necessary to give effect to the manifest intention of the partners.”
“The claimant also argued that if the CSA agreement did not have the effect of transferring the right to commission, it had the effect of constituting TTF G as the trustee of the right to receive all commission on sales since30th April 2002 (see Don King Productions Incorporated v Warren & Others[2000] Ch 291 ). Such a trust may arise where the parties intend to create a trust in order to do justice between assignor and assignee but, in my view, no such intention can be found in the present case and the court would be hesitant to 79. are based on expediency rather than justice. I also note that there is no evidence that the liquidator has refused to act.”
“Finally, the judge dealt obiter with Explora’s submission that even where there had been a prohibition on assignment, the CSA agreement could take effect by constituting TTF as the trustee of the right to receive commission coming due after30 April 2002 . The judge held that there was no evidence of the intention to create a trust between TTF and Explora in the present case (para 98).”
“what if the C paragraph 104: right was assigned but was not assignable?”
“105. Strauss asked the court to reconsider this issue 8(b) on the ground that At the time appointed for the hand-down of these judgments, Mr during his oral reply the court had indicated that it did not need to hear him G further in relation to it. He says – and I accept - that he would have wished to make further submissions not found in his written submissions, to the effect that, even if the right to commission was assigned, nevertheless there was no intention to create a trust in favour of Explora. His essential additional argument was to rely on a paragraph within the definition of Transferred Assets within clause 1 of the CSA, not otherwise cited to the H court, as follows: 84. ‘it excludes the Retained Assets and the Additional Assets, which shall remain with the Company, and any asset the transfer, surrender, disposal of or with which, or any part of or interest in which, would or might cause or occasion a breach of third party rights whether or not in the nature of intellectual property rights, or be otherwise contrary to any relevant law.’ 106. Mr Strauss relied on the words beginning ‘and any asset the transfer [etc] of… which… would or might cause or occasion a breach of third party rights’. He submitted that any assets whose assignment was even arguably contrary to a covenant against assignment were within these words as involving at least a possible breach of ‘third party rights’. He also submitted that consistently with this view, paragraph 9 of Schedule 1 to the CSA, another term not otherwise cited to the court, provided TTF with an indemnity from Explora ‘against any claim by reason of the infringement of any third party’s rights...’ C. 107relevant, if at all, to issue 8(a) rather than issue 8(b). If the debts in question . It seems to me that this is a bad point. First, it is a point which is were assigned, it seems impossible to suppose that there was no intent to render TTF a trustee of the debts in question. However, there was no application for the court to reconsider its judgment under issue 8(a), even if it became obvious in the course of Mr Strauss’s further submissions that that was where the logic of his point was taking him and that he was really D. attempting to say that there simply had been no transfer in the first place. That illustrates the danger of allowing a party to seek the exceptional jurisdiction to reopen argument after a draft judgment has been distributed to the parties. Secondly, the clause is in my judgment dealing with assets in which third parties have an interest, not with a covenant against assignment. Thirdly, given that the 1995 agency agreement is a specifically scheduled E transferred asset, it seems to me to be impossible to say that post30 April 2002 debts under it fall outside the transfer just because of even an argument against assignability. This conclusion seems to me to be fortified by the indemnity provisions under clause 9 of Schedule 1. 108. Mr Strauss further wished to submit that the conclusion stated in para F. 1041995 above, that TTF holds any post30 April 2002 book debts under the agency agreement in trust for Explora, was not supported by any at 321D. I respectfully do not agree. I have referred above to what the judge, reason, and was wrong in the light of what Lightman J had said in Don King Simon J, had said in para 98 of his judgment, where he cites the same passage from allow a “procedural short-cut”‘, ie to allow a litigant to get round the Don King and says cautiously that a court ‘will be hesitant to G. prohibition against assignment merely by joining the assignor/trustee. The court will be hesitant (see also Hayim v. Citibank NA[1987] AC 730 at 748F). However, in this case TTF has been a party to this action from the start, but was joined on terms that it wished to play no part in it: TTF plainly did not wish to make any claim in its own name. The points on non-assignability and intention to create a trust points were equally plainly on the H pleadings, but that did not tempt TTF to show any interest in the relevant claims. 109. That has been confirmed in the period since the distribution of our draft judgments. They have been copied by our direction to both the administrative receivers and to the liquidators of TTF, who have been expressly requested by Explora to enforce the post30 April 2002 claim under the 1995 agency agreement (which we are informed is worth about£50,000 ). The liquidators have ignored the request, and the receivers, who have instructed Mr James Potts to appear on their behalf at the adjourned hearing at which Mr Strauss has asked us to reconsider our judgments, have through him made it expressly clear that they make no claim to commission under the 1995 agency agreement and accept that this claim belongs to Explora. In the circumstances, the suggestion that this court should leave this claim in some black hole is, as Mr Strauss himself accepts, wholly unmeritorious. Hesco owes it to TTF, a party to this action, and TTF is entitled to deal with it as it wishes. I would agree that mere procedure should not permit a failed assignee to ignore the prohibition on assignment. But equally, in circumstances such as these, the court must be prepared to deal C with the issues and claims as presented to it, without creating unnecessary and disproportionate procedural complexities.”
“Each Bank may at any time and from time to time assign all or any part of its rights and benefits in respect of the Facility to any one or more banks or other financial institutions (an ‘Assignee’), provided that any such E assignment may only be effected if (save in the case where the assignee is a member of the same group as the assignor, no such consent then being required) the prior written consent thereto of the Borrower shall have been obtained (such consent not to be unreasonably withheld and to be deemed to have been given if no reply is received from the Borrower within fifteen days after the giving of a request for consent by a Bank).”
“It is said that BoZ has, by article 12, a right to decree by whom it should be D sued and that to allow the bringing of an action using the Vandepitteprocedure on an acknowledged debt would be to allow interference in BoZ’s contract with its lenders under the facility. This argument seems to me to be a false one. The procedure is ‘procedure’ and it simply provides a short cut to prevent litigation under which BoA could be forced to sue followed by an action under which BoA sues. In other words, albeit BT is the claimant, it is E as if BoA were claimant seeking to recover that which is due in law which they will then hold for BT. There is thus no interference by BT. In any event to construe suing on an acknowledged debt as interfering in BoZ’s contract with its lenders seems to me far-fetched. Thus article 12, on its true construction, does not, in my view, prevent the use of the Vandepitte procedure. F. 46. What then should be the attitude of the court? In that regard one should first consider the terms of the declaration of trust. The declaration of trust certainly does not provide in terms for BoA not being prepared to sue in its own name, nor is any assistance to be gained from the letters which preceded the declaration in that regard. The declaration recognises that BT will sue, but it also seems to recognise that there does exist the very situation G. in which the Vandepitte procedure should be available in normal circumstances. 47. That brings me to the final question, which is whether, if as I am now assuming, article 12 contains some prohibition on alienability, what attitude 98. enforcement of the trust declared as between BoA and BT as well as with the contract as between BoA and BoZ. I see no reason for the court not to assist BT or any reason why it should provide BoZ with a defence which BoZ does not have against BoA.”
“It is possible to read these passages as saying that the Vandepitteprocedure has no place in the commercial sphere. That, however, would not accord with my understanding of what Lightman J and Morritt LJ were saying. It would also be inconsistent with established lines of cases in the commercial field, such as the trust found in a charterparty in favour of the shipbroker. I understand these passages as saying that the law would not permit rules and procedures, such as the commercial context where inappropriate.”
“118. A closely related example is that of factored invoices. A nonassignment clause will create difficulties for the factoring company. E. However, it would be highly undesirable if customers could totally prevent their suppliers from factoring their book debts by the device of a non- joined as a defendant, is that case crucially different from the case where the assignment clause. If the supplier has no interest in suing and has to be supplier is prevailed upon to sue together with the factoring company?”
“119. For these reasons, if I had decided issue (1) in favour of finding that BoA had a good legal title to the debt, I would, on balance, have been in favour of saying that, on the facts of this case as far as they appear and on the submissions we have heard, the Vandepitte procedure could be used to G recover into BoA’s possession, for the benefit of BT, a debt which on that hypothesis would have been an acknowledged debt owned by BoA. As it is, I do not have to make a final decision on this ultimate issue. That is perhaps just as well, as the argument on appeal has both far outstripped the evidence with which the parties had come to court in the first place and at the same time failed to focus on the particular facts before the court. Thus we know H little about the real considerations which have affected the relationships in this case. Moreover, there was no immediate relationship between BoA and BT to support the declaration of trust, which does not arise out of a failed assignment directly between BoA and BT. It might therefore have been said that that declaration was merely a device to bring before the court, at the instance of BT, a claim which BoA would otherwise have allowed to become time-barred. On that hypothesis, I would be doubtful that equity would enforce the trust.”