Promontoria (Henrico) Ltd v Melton

For an absolute assignment under section 136 of the Law of Property Act 1925, the statutory formalities must be satisfied, but the assignment document is construed using ordinary contractual principles. The court may consider the factual matrix and relevant evidence when identifying the assets assigned. The statute does not itself give the debtor an entitlement to inspect the assignment document before treating the assignee as creditor. A valid notice completes the legal assignment once the other statutory requirements are met. A later inaccurate notice does not undo an assignment already effective on receipt of an earlier valid notice.

Promontoria obtained judgment and possession orders against John Richard Melton in the County Court at Barnsley in respect of a loan facility and related legal charges. The Recorder held that the Bank had absolutely assigned its rights to Promontoria under a deed dated 28 October 2016 and that valid notice had been given.

On appeal, the central issues were whether the deed sufficiently identified the assigned assets, whether extraneous evidence could be considered, whether redacted signatures prevented proof of execution, and whether an inaccurate later notice invalidated an earlier valid notice.

1. The appeal was dismissed. The Recorder was entitled to find that the facility agreement and associated legal charges had been absolutely assigned to Promontoria under section 136 of the Law of Property Act 1925.
2. Section 136 requires an absolute assignment in writing under the hand of the assignor, together with express written notice to the debtor. Once those requirements are satisfied, the assignment is effective in law from receipt of notice, and the debtor must treat the debt as transferred to the assignee.
3. The statutory formalities do not exclude ordinary contractual construction. The court may construe the deed in its factual matrix, including the Bank’s prior notification of the proposed assignment, the identification of the debtor in Schedule 1, the subsequent conduct of the parties, and relevant unchallenged evidence. The Recorder was therefore entitled to construe the references to Melton in Schedule 1 as identifying his loan facility and legal charges.
4. The statute does not confer an independent right on the debtor to inspect the assignment document. If uncertainty or competing claims arise, the statutory proviso supplies protection through interpleader or payment into court. In any event, the assignment document was later provided to Melton.
5. The Recorder was entitled to find that the redacted signatures were genuine. The redactions did not prevent proof that the deed was signed by the assignor.
6. The notice dated 1 November 2016 was valid. The later notice dated 14 November 2016 contained an inaccurate date and was invalid, but it could not undo the legal transfer already completed upon receipt of the earlier valid notice. Any residual uncertainty was later resolved when the deed was supplied.

• County Court at Barnsley: On 6 September 2018, Mr Recorder Miller entered judgment for Promontoria, ordered possession of the charged properties, and ordered payment of £367,233.09.
• High Court (Chancery Division): Permission having been granted on one ground, Mr Justice Barling dismissed the appeal.