Ian George Nicoll v Promontoria (Ram 2) Ltd

Hearing dates: 8 th August 2019

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

This is an appeal from an order and decision of ICC Judge Burton dated and given on 18 March 2019 in which she dismissed an application to set aside a statutory demand served by the respondent (“Promontoria”) on the appellant (“Mr Nicoll”). Permission to appeal was given (by me) on 8 July 2019 on limited grounds relating to the effect of redactions in documents affecting or governing an assignment to Promontoria in circumstances which will appear. There is also a cross-appeal by Promontoria on a procedural matter, namely whether or not the point which arises on this appeal, and which was determined by the judge below, should ever have been allowed to have been run in the first place.

Because of that procedural matter, and because of additional complications introduced by fresh evidence which I permitted to be adduced on this appeal, it is necessary to set out some of the background in more detail than would otherwise have been necessary.

The debt in respect of which the statutory demand was served originally arose as between Mr Nicoll and the Co-operative Bank as evidenced in various facility letters between September 2010 and May 2013. A sum of well over £10,000,000 was lent, and security was taken. The overall balance was repayable in May 2015 but it was not paid.

On 29 July 2016 the Co-Operative Bank assigned (or purport to assign – the effectiveness of the assignment is in issue in these proceedings) their debt and security to Promontoria, along with the debts of others. Notice of assignment was given by both Co-operative Bank and Promontoria in a single document on 2 August 2016.

Promontoria pursued Mr Nicoll for the debt by serving a statutory demand dated 27 January 2017, demanding the sum of £10,533,024.51. The demand actually refers to the deed of assignment. On or about 27 February 2017 (the precise day is not clear from the handwriting on the document, but nothing turns on it) Mr Nicoll applied to set aside that statutory demand in the County Court at Chelmsford. The supporting witness statement complains about conduct which is said to demonstrate pressure on him to sell the charged property at an undervalue. It is not very clear from that supporting witness statement what the complaint really was, but it seems ultimately to have developed into a dispute about the value of the security. Paragraph 4 of that supporting witness statement has a relevance to the procedural question to which I have referred. So far as relevant it reads:

“4. The Statutory Demand is not relevant to the cross-charge as it is disputed by myself as it was (purportedly) assigned when it should never have been because the Co-operative bank solicited me to sell the original land at a massive undervalue for circa £2-million.”

The word “purportedly” betokens some sort of challenge the assignment, but it is significant to note that it is not the same challenge as ended up being made before the judge below.

That witness statement was met by a witness statement of Mr Stephen Wood of Capita, who manage the Promontoria portfolio. He produced various facility letters and legal charges. He also produced a highly redacted form of the deed of assignment of Mr Nicoll's debt, explaining that the redactions were because it was a “commercially sensitive document”. He explained that he was producing the document in order to explain the basis of the claim and the context in which the deed of assignment came to be executed as part of the chronology (paragraph 16).

I shall come to the wording of the deed of assignment in due course, but in order to make sense of one aspect of the procedural chronology it is relevant to observe at this stage that the deed of assignment contained a number of references to a document described as the “Loan Sale Deed” (hereafter “LSD”) which was said to have preceded it. The “Effective Assignment Date” in relation to the assignment of the loans was defined by reference to a definition which appears in the LSD, which was not produced at the time (no doubt because the particular point as to the completion date around which this appeal turns had not arisen at that point).

The dispute on the statutory demand was not resolved for two years until it eventually became before ICC Judge Burton, the matter having been transferred to the High Court in London in the meanwhile. In order to resolve various points about the valuation of the security (points raised by Mr Nicoll), a single joint expert was appointed and he reported. The judge heard the dispute as it was then formulated over two days on 31 ^st January and 1 February 2019.

Two weeks previously, on or about 18 ^th January 2019, Mr Nicoll signed and served (on 21 ^st January 2019) a witness statement raising what the judge saw as three issues – an issue under the Consumer Credit Act based on unfairness, a challenge to the valuation evidence and a challenge to the effectiveness of the assignment based on an inability to work out whether the completion date for assignment had actually occurred. Towards the end of the first day of her hearing, ICC Judge Burton ruled on the extent to which she was going to deal with those matters. She ruled that she would not entertain any challenge to the report of the single joint expert, and she would not allow the Consumer Credit Act issue to be raised either. She also dealt with the extent to which she would allow a point to be raised about the effectiveness of the assignment.

At this point the matter becomes attended with some difficulty. As will appear, the judge allowed the effectiveness point to be taken, but only to a certain extent. Promontoria seeks to cross-appeal (or, so far as appropriate, rely on a respondent's notice) based on an averment that the judge erred in allowing the point to be raised at all. The problem with that is that there is no transcript of her judgment on that point. I have been provided with each side's notes of the judgment (and of the hearing either side of it), but they lack a certain degree of clarity as to what the decision was and how far it went. However, doing the best I can with those notes, it seems that the judge determined that she was not prepared to allow a challenge to the effectiveness of the assignment based on a failure to produce other documents (basically the LSD). She seems to have considered that such a claim should have been made much earlier and not as late as the January witness statement. But she acknowledged that there had been a prior challenge to the validity of the assignment. The notes do not identify clearly what she was talking about in that context, but the only thing she can have been talking about is the use of the word “purportedly” in Mr Nicoll's initial witness statement supporting his application to set aside the statutory demand. That inference is supported by what she went on to say in her final form of judgment on the outstanding issues. The notes of the rest of the hearing indicate that the judge allowed submissions to be made as to the effectiveness of the assignment but not in so far as they could only have been met by the production of additional documents (again, effectively the LSD). She had indicated in her interim judgment that she would not have done anything which would have necessitated an adjournment of the proceedings, by which she presumably meant something which would have compelled Promontoria to seek an adjournment to put in more material.

Having then so ruled, the judge heard submissions on the issues which she permitted to be raised and delivered her main judgment. She ruled first that Promontoria did not have the benefit of an estoppel in support of the effectiveness of the assignment as vesting the debt in Promontoria, but went on to rule that the assignment was good in any event (in effect, that Promontoria did not need any estoppel). She then ruled against Mr Nicoll in his submissions that the value of security held by Promontoria exceeded the amount of the debt. Thus the application to set aside the statutory demand failed. The first and third of those decisions are not challenged in this appeal. This appeal concerns the second of them (effectiveness).

Mr Nicoll sought to appeal on various bases. I myself gave him permission (at an oral hearing) but limited to 2 points only. The first was the effect of the absence of an expressly identified completion date in the assignment deed, and the second was the effect of the redaction of the signatures on the copy of the assignment deed originally exhibited by Mr Wood. In the light of further evidence submitted on this appeal, the second of those points no longer arises.

Permission to appeal having been granted, Promontoria made an application to adduce fresh evidence on the footing that the question of the effectiveness of the assignment had been bounced upon it at the last minute, when it did not have an opportunity to put in evidence, and it now wished to do so. I had myself anticipated the likelihood of that being done, and on 31 ^st July I ordered that they be at liberty to adduce fresh evidence. The application was not opposed by Mr Nicoll. It is as a result of that evidence that the signature redaction...