Nicoll v Promontoria: Providing a Date of Assignment where Debt has been Assigned

Case summary 

In Nicoll v Promontoria (Ram 2) Ltd [2019[ EWHC 2410 (Ch), the appellant debtor, Nicoll had not repaid a £10 million loan to the Co-operative bank. The bank assigned the debt to the respondent, Promontoria. The Co-operative Bank and Promontoria provided a joint notice of assignment to Nicoll and a statutory demand was served four months later. Nicoll applied to set aside the statutory demand arguing that the notice of assignment of the debt contained an unverifiable date of assignment.  

On appeal, the High Court held that the notice of assignment of the debt given to  Nicoll was valid even though the effective date of the assignment stated in the notice could not be verified by Nicoll. 

Key facts and decision

The date of assignment in the notice was determinable by reference to other documents and a date of completion. The court concluded that based on the documents provided to Nicoll, it was not possible for Nicoll to determine the effective date of the assignment with any certainty. 

Nicoll then argued that the case of WF Harrison v Burke [1956] 1 W.L.R. 419 is authority that a notice of assignment which states an incorrect date of assignment is invalid and therefore Promontoria had no right to pursue Nicoll for the debt. 

The Court distinguished this case from the case of WF Harrison on the grounds that in Harrison the notice of assignment was given by the assignee only whereas in this instance, the notice was given jointly by both the Co-operative bank and Promontoria. 

Further, in Harrison, the notice specified a wrong date for the assignment document rather than the wrong date of the assignment itself. In this instance, it could not be established whether the date was wrong as it was unverifiable. 

The Court held that the joint notice from the Co-operative Bank and Promontoria clearly showed that both parties agreed that the assignment had taken place and was valid. Serving the notice jointly put it beyond doubt that the Co-operative Bank and Promontoria  considered that the assignment had taken place.  

Significance 

Whilst Nicoll is only a High Court judgement and therefore has limited precedent value, it does suggest that mistakes made as to the date of assignment may not be fatal when it is entirely clear that the debt has been assigned. 

However, it is worth noting that in any event, under section 136 of the Law of Property Act 1925 there is no obligation to include the date of assignment in the notice. Therefore, if there is any doubt as to the date of assignment, it is suggested that the date should not be included in the notice, at least where the notice is to served on a joint basis by the assignee and assignor. However, a party serving the notice may wish to insert the date of assignment in the notice for some reason such as to protect its priority. When doing so the party must ensure that the date is correct.

Should you have any questions in respect of the above or require more information about debt generally, then please contact James Thornton or Katherine Hall from our Litigation and Dispute Resolution Team.

James Thornton – Head of Litigation and Dispute Resolution

Email: jthornton@fionabruce.co.uk

Tel: 01925 217026

Katherine Hall – Trainee Solicitor

Email: khall@fionabruce.co.uk

Tel: 01925 263273