Assignments to office-holders valid without consent.

ANC Ltd v Clark Goldring and Page Ltd, The Times 19 May 2000, CAThis appeal concerned two actions involving ANC, a road haulage contractor and franchiser of a collection and delivery service.

ANC sued a director of Compass Ltd claiming breach of contract.

There was a counter-claim against ANC.

ANC was also sued by Rapid Services Ltd alleging that losses had been incurred due to a misrepresentation by ANC.

Compass Express Ltd went into a company voluntary arrangement and assigned its action against ANC to the office-holder.

Rapid Services Ltd went into a creditors' voluntary liquidation and assigned its action against ANC to the office-holder.

ANC argued that the assignments were not valid because its standard terms and conditions provide that the agreement was 'personal to the franchisee' and prohibited any assignment by the franchisee without ANC's consent.

This included any beneficial rights of the franchisee.

The Court of Appeal agreed with the first-instance judge that this clause did not survive the termination of the franchise agreement.

The court commented that the rule in Linden Gardens Trust v Lenesta Sludge Disposals (1993) 3 WLR 408 was flexible and that each case turns on the terms of the particular contract.

Courts' power to appoint additional insolvency officers.

Clements and Another v Udall, The Times, 7 July 2000The court has inherent power to appoint extra insolvency officers, following an application by partners of an accountants' firm.

Mr Udall had previously been a partner and was an office holder to some 240 insolvencies.

The partners applied to remove Mr Udall as office holder and in place nominate other partners of the firm.

An application without notice could only be made if the matter were urgent or if notifying the defendant would defeat the relief sought.

Neither of these grounds was relevant so the hearing was adjourned.

The court recognised that in the interim an office holder might be required.

It appointed additional office holders on a temporary basis.

S.108(1) of the Insolvency Act 1986 states that a liquidator can be appointed when there is no liquidator acting.

The court held that this extends to a situation where the liquidator is not performing his functions.

The court therefore has power to appoint additional insolvency officers temporarily in these circumstances.

Similar powers exist in relation to bankruptcy, individual voluntary arrangement and corporate voluntary arrangements.Undervalue may occur without loss.

National Westminster Bank plc v Jones and others, The Times, 7 July 2000The defendants carried on an agricultural business in partnership.

The National Westminster Bank advanced monies to the partnership secured by a mortgage on the farm and three floating agricultural charges over all farming stock and agricultural assets.

The defendants got into financial difficulties.

They were advised that they could protect their home and farm by setting up a company and transferring all the assets to the company but this would only be affective if the sale were at a proper value.

Their interest as a freeholder and owner of assets had diminished but was balanced by their capacity as shareholders.

The National Westminster Bank objected to the transfer on a number of grounds, one of which was successful.

The court noted the wording of s.423(3) (a) and (b) to the Insolvency Act 1986 was that a person must not be prejudiced.

The court held that the transaction was at an undervalue pursuant to s.423 and could be set aside.