AG Retail Num (6) Limited v Andron Contract Services Limited

Facts

The claimant, Andron Contract Services Limited, provides facilities management services such as cleaning and security to office buildings and shopping centres. From 19 October 2020 it provided those services at the Golden Square Shopping Centre in Warrington under a contract with the then leasehold owners, Alaska UK Trustees Limited and Alaska Nominees Limited. Receivers were appointed over certain of Alaska's assets, including the lease, in July 2021, and the claimant continued to work at the centre; it was paid to the end of October 2022 but not for services provided from 1 November to 23 December 2022, valued at £333,948.76. The defendant, AG Retail Num (6) Limited, purchased the lease from Alaska and the receivers for £22,500,000 under a sale agreement dated 8 December 2022, completing on 23 December 2022. Immediately before completion, allowances totalling some £878,000 were made against the purchase price in respect of service charge arrears, the service charge float and a shortfall on void units. The claimant issued proceedings in March 2025 claiming restitution for unjust enrichment, contending that the statement of account had omitted the debt owed to it, so that the defendant obtained an enlarged allowance at its expense. The defendant applied to strike out the claim and for summary judgment.

Decision

Issues

• Whether the claimant had a real prospect of establishing that the defendant had been enriched.
• Whether any such enrichment was at the claimant's expense within the meaning of the law of unjust enrichment.
• Whether any such enrichment was unjust, there being an identified unjust factor.
• Whether the claim should alternatively be struck out as disclosing no reasonable grounds.

Reasoning

Tom Little KC, sitting as a Deputy Judge of the High Court, applied the familiar summary judgment principles collected by Lewison J in Easyair Ltd v Opal Telecom and approved in AC Ward & Sons Ltd v Catlin (Five) Ltd, together with Lord Hope's warning in Three Rivers District Council v Governor and Company of the Bank of England (No 3) against conducting a mini-trial, while noting from JSC BTA Bank v Ablyazov that complexity is no bar to summary disposal. Taking the claimant's case at its highest, the judge was just persuaded that the enrichment question carried a real rather than fanciful prospect of success, observing that determining it would come close to a mini-trial and that pre-contractual negotiations are generally no aid to construing a written contract. The claim nonetheless failed on the second and third of the four questions identified in Menelaou v Bank of Cyprus Ltd, which Lord Reed in Investment Trust Companies v Revenue & Customs Commissioners described as signposts rather than legal tests. There had been no direct dealings between the claimant and the defendant before 24 December 2022, and none of the situations Lord Reed identified as equivalent to a direct transfer — agency, assignment, sham, co-ordinated transactions forming a single scheme, tracing or discharge of debt — was engaged. The claimant's contract with Alaska and the receivers was separate from and remote from the purchase of the lease, and it was untenable to treat them as a single co-ordinated transaction. Any benefit was conferred by Alaska and the receivers, who were not the claimant's agents, and the claimant retained its debt claim against them, which it had not pursued; that claim could not be transmuted into enrichment at its expense. Even the defendant's knowledge of the unpaid debt would not alter that analysis. On unjustness, applying Swynson Ltd v Lowick Rose LLP and Dargamo Holdings Ltd v Avonwick Holdings Ltd, an unjust factor had to be identified; the only one advanced was mistake, but it was not the claimant's mistake, and no authority supported a third party's mistake sufficing. Reliance on the allowances for arrears and voids failed likewise: those were the product of contractual negotiation to which the claimant was not privy, and clause 35 excluded third party enforcement under the Contracts (Rights of Third Parties) Act 1999. There being no other compelling reason for a trial, the claim was dismissed and the strike-out question did not arise.

Case history