Tesco v Constain - Thomson Reuters

2003 WL 21729349 Page 342003 WL 21729349 (QBD (T&CC)), [2003] EWHC 1487(Publication page references are not available for this document.)from the date of this Agreement;2.2 Subject to the provisions of Clauses 2.3 and12 the Vendor will wholly discontinue carrying onthe Business and the Purchaser shall be entitled tocarry on and continue the same and to hold itself asdoing so in succession to the Vendor in each casewith effect from the date of the Agreement;2.3 The provisions of Clause 2.1 and 2.2 shall bedeemed to have had effect on the Transfer Date andthe Parties shall procure that all necessary steps aretaken by them to account for the transactionspursuant to this Agreement as if the Business andAssets had been sold and purchased on the TransferDate and as if the Business had been conducted bythe Purchaser and the Assets owned by thePurchaser since that date."In clause 1 of the Costain Agreement the "TransferDate" was identified as 1 January 1999 and theexpression "the Liabilities" was defined asmeaning:--"all unsatisfied liabilities (whether actual orcontingent) as at the date of this Agreementincurred by or on behalf of the Vendor in respect ofthe Business and/or the Assets."138. The "Assets" the subject of the CostainAgreement were more specifically dealt with inclause 3 of the agreement. Clause 4 was concernedwith "the Liabilities" and was in these terms:--"4.1 The Purchaser shall with effect from thedate of this Agreement assume responsibility forthe due and punctual payment, satisfaction anddischarge of the Vendor's obligations under/or inrespect of:4.1.1 the Contracts;4.1.2 the Liabilities; and4.1.3 all other liabilities, obligations andprovisions of whatever nature of the Vendor(including provisions for contingency) relating tothe Business;4.2 The Purchaser shall indemnify and keepindemnified the Vendor against all liabilities orobligations of the Vendor which are to be assumedby the Purchaser under the Provisions of thisClause."The expression "the Contracts" was defined inclause 1 of the Costain Agreement as meaning:--"all the contracts, arrangements and obligationsof the Vendor which relate to the Business,including without limitation, all joint ventureagreements between the Vendor and ThirdParties;".139. Clause 7 of the Costain Agreement wasentitled "Contracts and Third Party Rights". Theexpression "Third Party Rights" was defined inclause 1 of the Agreement as meaning:--"(to the extent to which the Vendor is legallyentitled to assign them) all of the Vendor's rightsagainst third parties including (without limitation)rights under or in respect of warranties,representations, guarantees and indemnities and thebenefit of any insurance or insurance claimattributable to any event occurring before the dateof this Agreement which relates to the Assets or tothe Liabilities assumed by the Purchaser under thisAgreement in respect of the Business or any of theAssets;".Clause 7 itself made this provision:--"7.1 The Purchaser shall take over from theVendor with effect from the date of this Agreementthe benefit and burden of the Contracts and theThird Party Rights;7.2 If the benefit and burden of any of theContracts or Third Party Rights cannot beeffectively assigned to the Purchaser except by anagreement of novation with, or consent to theassignment from, one or more third parties:--7.2.1 this Agreement shall not constitute anassignment or attempted assignment of theContract or Third Party Right in question;7.2.2 the Parties shall seek to procure suchnovation or consent;7.2.3 unless and until such Contract or the ThirdParty Right is novated or assigned:--7.2.3.1 the Vendor will hold the benefit of theContract or the Third Party Right in trust for thePurchaser absolutely and (so far as it lawfully may)give all reasonable assistance to the Purchaser toenable the Purchaser to enjoy the benefit of theContract or the Third Party Right and to enforce itsrights under it; and7.2.3.2 the Purchaser shall (if suchsubcontracting is permissible and lawful under thecontract or other document) as the Vendor's subcontractorperform all obligations of the Vendorunder it."140. By clause 10 of the Costain Agreement itwas provided that:--"The Purchaser shall pay, satisfy and dischargeall the debts, liabilities and obligations relating tothe Business and the Assets which have arisensince the Transfer Date (and which have yet to bepaid, satisfied or discharged) and whichsubsequently arise following completion and shallindemnify the Vendor against all actions,proceedings, costs, damages, claims and demandsin respect of them."141. No attempt was in fact made to seek tonovate as between Costain, the Other CostainCompany and Tesco any contractual arrangementwhich there may have been as between Costain andTesco in relation to the Store. Equally no attemptwas made by Costain to assign to the Other CostainCompany the benefit of any contractualarrangement relating to the Store. On its face theCopr. © West 2004 No Claim to Orig. Govt. Works