NO INTENTION TO ASSIGN COLLATERAL WARRANTY

Allied Carpets Group plc v Macfarlane [2002] EWHC 1155 (TCC) (unreported, 17 June 2002)

In Allied Carpets Group plc v Macfarlane [2002] EWHC 1155 (TCC) (unreported, 17 June 2002) the claimant purchased property from a liquidator. It later claimed that the property was defective and sought to bring a claim against the defendants pursuant to a collateral warranty which the defendants had provided in favour of the company that had gone into liquidation. Judge Humphrey LLoyd QC held that the claimant was not entitled to bring the claim because it was not entitled to the benefit of the warranty. He rejected the claimant’s submission that it was an assignee of the Warranty. He held, on an examination of the documents relating to the sale by the liquidator to the claimant, that there had been no intention to assign the benefit of the warranty to the claimant. Judge LLoyd pointed out that it does not take many words to assign the benefit of a warranty and the absence of an express assignment indocumentation that ran to some 606 pages was held to be fatal to the submission that the parties intended to assign the benefit of the warranty. The case underlines the need to pay careful attention to the issue of assignment when acquiring property in relation to which a collateral warranty has been provided.