Gastronome (UK) Ltd v Anglo Dutch Meats (UK) Ltd


Reference:
[2006] All ER (D) 377 (Jul), LTL 26/7/2006

Date:
26th July 2006

Court:
Court of Appeal

Comment:

The appellant (A), a wholesale food supplier, was part of a group of companies. It was also the 76% shareholder in another company, (X). The respondent (R) was a subsidiary of a French company, as was another company (C), both of whom were also in the food supply business. In 2001 X approached R to arrange for R to supply products for sale in the UK. R first required a guarantee agreement to ensure its invoices would be paid. The guarantee agreement, addressed to R, and on A’s headed paper, was sent to C to guarantee any amounts owed by X. The guarantee was renewed two years later. R fulfilled all X’s orders, but the following year X went into liquidation, owing R almost £185,000. R sought to enforce the guarantee against A for the amount owed. A appealed on the basis that the beneficiary of the guarantee agreement was C, not R, an argument rejected by the judge at first instance.


Held:
The guarantee was meant to benefit R. The address on the agreement was a mistake, and it was clear from the dealings of the parties that A was to be liable for X’s debt to R.

A court on the construction of a guarantee. A subsidiary company not named in the guarantee was nevertheless held entitled to enforce it.

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