Floods of Queensferry Ltd v Shand Construction Ltd [2002]

In Floods of Queensferry Ltd & Ors v Shand Construction Ltd [2002] EWCA Civ 918, two appeals were brought forth following the decision of HH Judge Lloyd QC on June 15, 2001. Shand Construction Ltd appealed the dismissal of its claims against David Flood and Winward Fearon under Section 51 of the Supreme Court Act 1981. Simultaneously, Winward Fearon appealed the rejection of its assertion that there had been an assignment of the benefit of an insurance policy and insurance monies in its favour.

Shand Construction Ltd contended that the judge erred in determining that David Flood had not acted improperly as a director and in applying an incorrect test when deciding whether to make a costs order. The judge's findings regarding David Flood's conduct were specifically related to the litigation, and Shand Construction Ltd argued that the judge wrongly identified the sole dominant purpose of the litigation. Additionally, criticisms were made against Winward Fearon's conduct as solicitors.

The court held that the judge's criticisms of David Flood pertained to his conduct within the litigation, and the discretion to determine whether David Flood's actions warranted a costs order lay with the judge. In the case of Winward Fearon, the judge's criticisms were associated with their role as solicitors, and the court affirmed that the judge's decision was appropriate, considering Winward Fearon's position as legal advisers to Floods of Queensferry Ltd.

Regarding the equitable assignment of insurance monies, the court determined that David Flood did not make a sufficiently clear act of assignment, and there was no evidence to support Winward Fearon's demand for a statement regarding the alleged assignment.

Furthermore, the judge's decision to order the payment of insurance monies out of court to Shand Construction Ltd was deemed incorrect by the court. The proper course of action, according to the court, was to have the monies repaid into court pending further orders arising from Floods of Queensferry Ltd's insolvency.
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