Massai Aviation Services & Anor v. The Attorney General & Anor (The Bahamas)  UKPC 12 (26 February 2007)
Privy Council Appeal No 58 of 2005
(1) Massai Aviation Services
(2) Aerostar Limited Appellants
(1) The Attorney General
(2) Bahamasair Holdings Limited Respondents
THE COURT OF APPEAL OF
THE COMMONWEALTH OF THE BAHAMAS
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JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL
Delivered the 26th February 2007
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Present at the hearing:-
Lord Bingham of Cornhill
Lord Scott of Foscote
Baroness Hale of Richmond
Lord Brown of Eaton-under-Heywood
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[Delivered by Baroness Hale of Richmond]
The decisions in the courts below
Was the assignment void?
"The truth is that today the great bulk of the litigation which engages our courts is maintained from the sources of others, including the state, who have no direct interest in its outcome but who are regarded by society as being fully justified in maintaining it."
". . . it seems that one of the abuses which afflicted the administration of justice was the practice of assigning doubtful or fraudulent claims to royal officials, nobles or other persons of wealth and influence, who could in those times have expected to receive a very sympathetic hearing in the court proceedings. The agreement often was that the assignee would maintain the action at his own expense, and share the proceeds of a favourable outcome with the assignor."
". . . just as the law became more liberal in its approach to what was lawful maintenance, so it became more liberal in its approach to the circumstances in which it would recognise the validity of an assignment of a cause of action and not strike down such an assignment as one only of a bare cause of action."
Lord Roskill went on to say at 703:
"But it is today true to say that in English law an assignee who can show that he has a genuine commercial interest in the enforcement of the claim of another and to that extent takes an assignment of that claim to himself is entitled to enforce that assignment unless by the terms of that assignment he falls foul of our law of champerty, which, as has often been said, is a branch of our law of maintenance."
"The law of champerty is designed to prevent officious or wanton intervention in the litigation of others . . . I see nothing officious or wanton in the intervention of members. In my judgment the interests of Mr and Mrs Rogers as creditors and contributories give them a sufficient substantial and commercial interest in the cause of action of Norglen against the defendants, precisely commensurate with the benefits they would derive under the assignment and related undertakings. Accordingly, the assignment and undertakings cannot be void on the ground of champerty."
When the case reached the Court of Appeal, that conclusion was accepted to be correct: see  1 WLR 864, per Sir Thomas Bingham MR at 873. In Circuit Systems Ltd and Basten v Zuken-Redac (UK) Ltd (1994) 11 Const L J 201, HHJ Havery QC, took the approach in Norglen a step further in upholding the assignment of a claim by a company to its 98% shareholder on terms that he was to have 60% of the proceeds and the company 40%. This too was upheld in the Court of Appeal: see  1 WLR 721. As Simon Brown LJ observed at 734:
"Given the correctness of Judge Havery QC's conclusion that the rights of a shareholder can give rise to a genuine and substantial commercial interest . . . it is impossible to argue that a 98% shareholding, as here, does not justify an assignment on terms that the first 60% of the proceeds of the litigation will go to the assignee."
Norglen and Circuit Systems together reached the House of Lords on other grounds: see  2 AC 1. The correctness of the lower courts' approach to the principles under discussion here was not questioned. Nevertheless, Mr Dingemans urges us to leave the line where it was drawn in Norglen: only a shareholder who is also a creditor would have a sufficient commercial interest to justify an assignment of the company's claims.
"Notwithstanding anything by the Lessor (or anyone through whom the lessor derives title) made done executed or omitted or knowingly suffered the Lessor has full power to grant the demise hereby created and that the Lessee paying the rents hereby reserved and performing and observing the several covenants conditions and agreements herein contained on its part to be performed and observed shall and may peaceably and quietly hold and enjoy the demised premises during the term hereof without any lawful interruption or disturbance by the Lessor or any person lawfully claiming under or in trust for the Lessor."
Unfortunately, having concluded that the assignment was void, the Court of Appeal did not go on to consider whether there had been a breach of this covenant as opposed to the alleged implied term for immediate vacant possession.
As Lord Millett explained in Southwark London Borough Council v Mills  1 AC 1 at 22,
"It has long been understood that the word 'quiet' in such a covenant does not refer to absence of noise. It means without interference. The covenant for quiet enjoyment was originally regarded as a covenant to secure title or possession. It warranted freedom from disturbance by adverse claimants to the property. . . But its scope was extended to cover any substantial interference with the ordinary and lawful enjoyment of the land . . . "