Prudential has won its dispute with two partners of an American law firm to enforce a guarantee for outstanding rent and other charges on offices at Hasilwood House, Bishopsgate, London EC2.
Moore-Bick LJ granted Prudential’s appeal against a High Court finding that David Ayres and Christopher Grew, who are former partners at Brobeck Hale & Dorr, were not liable under the guarantee for the amounts owed by another firm of American lawyers to whom they had assigned their lease.
In 1997, Prudential granted a 10-year lease of two floors of offices in the 4,087m2 (44,000 sq ft) Hasilwood House to Ayres and Grew at a rent of almost £400,000 pa.
In 2001, Ayres and Grew assigned the remainder of the lease to Altheimer & Gray (A&G), subject to a guarantee by them that A&G would pay rents and other charges.
At the same time, Prudential also entered into a supplemental deed with A&G, under which it agreed that the liability of A&G would be limited to the partnership assets and that there could be no recourse to the personal assets of individual partners.
In 2003, A&G was declared bankrupt in the
In the High Court, Lindsay J concluded that the supplemental deed limited the liability of both A&G and previous tenants to A&G’s partnership assets.
Allowing Prudential’s appeal, Moore-Bick LJ held: “Properly construed, the supplemental deed does not purport to confer any benefit on [Ayres and Grew]; rather, it purports to limit their rights against the individual partners of Altheimer & Gray. As such, it provides no defence to Prudential’s claim.”
The Prudential Assurance Company Ltd v Ayres and another Court of Appeal (Ward, Moore-Bick and Moses LJJ) 7 February 2008.
Anthony
