Hancock v Promontoria (Chestnut) Ltd

In an application to set aside a statutory demand, the debtor must show a substantial dispute giving rise to a genuine triable issue. A creditor can establish title to assigned loan facilities through a redacted deed of assignment and supporting evidence. The debtor is not entitled to inspect every transactional document between assignor and assignee. Irrelevant or confidential material may be withheld or redacted.

On construction, an assignment clause covering specified loan assets included the relevant Pool B assets. A clause making identification subject to a sale and purchase agreement did not derogate from the operative transfer of title. References to a novated buyer did not establish that the loan facilities themselves had previously been novated.

Anthony Hancock appealed against District Judge Wright’s refusal on 15 June 2017 to set aside a statutory demand served by Promontoria (Chestnut) Ltd for an alleged debt exceeding £4 million arising from secured loan facilities originally granted by Clydesdale Bank plc.

Permission to appeal was granted by Barling J, sitting as Vice-Chancellor, on three limited title issues concerning the construction and effect of a deed of assignment dated 28 November 2014. The issues were whether the appellant’s facilities fell within the assigned assets, whether clause 1.5 made the assignment conditional on an unseen sale and purchase agreement, and whether the facilities had previously been novated to an unidentified third party.

1. The appeal was dismissed. The debt was not genuinely disputed on grounds appearing substantial, and there was no genuine triable issue concerning the respondent’s entitlement to sue.
2. Under the then applicable Insolvency Rule 6.5(4)(b), the relevant question was whether the dispute as to liability was substantial and genuine. The appellant’s challenge to title did not satisfy that threshold.
3. The redacted deed of assignment, together with Mr Cooper’s witness evidence and the related Land Registry material, was sufficient to establish title. A debtor is not entitled to inspect every transactional deed between assignor and assignee. A document may be withheld where irrelevant or confidential, and may be produced in redacted form.
4. Clause 2.1 assigned rights under each relevant document relating to each specified loan asset. The definitions extended to relevant Pool B loan assets, including the appellant’s facilities. The parenthetical reference to documents in Part 1 of Schedule 1 did not exclude the assets described in Part 2.
5. Clause 1.5 identified the relevant Pool B loan assets and preserved obligations arising under the sale and purchase agreement. It did not limit or derogate from the transfer of title effected by clause 2.1.
6. The references to the respondent as the novated buyer did not show that the loan facilities had been novated to an unidentified third party. Any novation concerned the sale and purchase agreement, not the facilities between the Bank and the appellant.

The statutory demand therefore remained effective and the appeal was dismissed.

• High Court (Chancery Division): District Judge Wright refused on 15 June 2017 to set aside the statutory demand.
• High Court (Chancery Division): Barling J granted permission to appeal on limited title issues in [2018] EWHC 2934 (Ch).
• High Court (Chancery Division): The appeal was dismissed in the present judgment.