Benjamin Goldkorn v MPA (Construction Consultants) Ltd & Anor

A contractual restriction on assigning the benefit of an appointment may encompass both rights to future performance and accrued rights of action, unless the contract clearly distinguishes between them. A reference to the benefit of an appointment ordinarily contrasts with its burden; it does not, without more, preserve accrued claims.

Where tortious duties are identical to contractual duties, an assignment restriction applying to the contractual benefit may also bar the corresponding tort claims. A beneficiary cannot use the Vandepitte procedure to circumvent express contractual restrictions which confine enforcement to the contracting party, permitted assignees and the consultant.

The claimant sought to pursue claims against MPA, a project manager, arising from MPA’s alleged breaches of a project management appointment with Kazu Restaurants 1 Ltd. Kazu 1 had entered liquidation and purported to assign its claims to the claimant. It later declared that the relevant rights were held on trust for him.

The claimant accepted that he had no claim in his own right. The preliminary issues were whether he had title as assignee under the deed of assignment, or as beneficiary under the declaration of trust, either in his own name or to compel Kazu 1 to sue.

1. The claimant had no title to bring the claims as assignee. The requirements for a valid legal assignment under s.136(1) of the Law of Property Act 1925 were not in issue. The question was whether clause 16.2 of the project management appointment prohibited the assignment.

2. “The Project” meant the construction works at the premises, not the claimant’s acquired claim for damages. The claimant had acquired no interest in those construction works and was therefore outside the express categories of permitted assignee.

3. The phrase “the benefit of this Appointment” was intended to contrast with the burden of the appointment. It did not contain the careful and intricate drafting needed to distinguish rights to future performance from accrued rights arising from past breaches. The restriction therefore covered the assigned contractual claims.

4. The pleaded tortious duties were identical to the contractual duties. They formed part of the benefit of the appointment and were also caught by clause 16.2. The prohibition therefore encompassed all claims advanced, whether in contract or tort.

5. The claimant also had no title as beneficiary. Clause 18.2 confined enforcement to Kazu 1, permitted assignees and MPA. The claimant was none of those persons, and his claim for damages was an action to enforce the appointment.

6. The Vandepitte procedure could not overcome clauses 16.2 and 18.2. The authorities concerning that procedure were therefore irrelevant on these facts. The court noted that the guidance in Barbados Trust Co Ltd v Bank of Zambia concerning avoidance of a non-assignment clause through the procedure was, by common ground, obiter.

7. The answer to both preliminary issues was “No”. Counsel were directed to draw up the order. Consequential applications could be made within 14 days after hand-down, with liberty to apply.