Promontoria (Pine) Designated Activity Company v Anthony Leslie Hancock

JurisdictionEngland & Wales
JudgeMr Justice Snowden
Judgment Date11 February 2021
Neutral Citation[2021] EWHC 259 (Ch)
Docket NumberInsolvency No. 880 of 2018 Case No: F01LV711 Appeal No. 78 of 2019
CourtChancery Division
Date11 February 2021

[2021] EWHC 259 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN LIVERPOOL

CHANCERY APPEALS

On appeal from the decision of DDJ Williams dated 14 May 2019

And on appeal from the decision of HHJ Hodge QC dated 30 September 2019

Civil and Family Justice Centre

Liverpool

Before:

Mr Justice Snowden

Vice-Chancellor of the County Palatine of Lancaster

Insolvency No. 880 of 2018

Appeal No. 69 of 2019

Case No: F01LV711

Appeal No. 78 of 2019

In the Matter of the Insolvency Act 1986

And in the Matter of Anthony Leslie Hancock

Between:
Promontoria (Pine) Designated Activity Company
Claimant/Creditor
and
Anthony Leslie Hancock
Defendant/Debtor

James McWilliams (instructed by Walker Morris LLP) for the Claimant

Graham Sellers (instructed by Joanna Connolly Solicitors) for the Defendant

Hearing dates: 28–29 October 2020

Approved Judgment

Mr Justice Snowden Mr Justice Snowden
1

This judgment follows a remote hearing of two matters: (i) an appeal (“the Bankruptcy Appeal”) by Promontoria (Pine) Designated Activity Company (“Promontoria”), and (ii) an application for permission to appeal (the “PTA Application”) by Mr Anthony Leslie Hancock (“Mr. Hancock”).

2

Promontoria's Bankruptcy Appeal is an appeal against the decision of Deputy District Judge Williams dated 14 May 2019, in which DDJ Williams ordered that a statutory demand in bankruptcy served by Promontoria on Mr. Hancock be set aside.

3

By the PTA Application, Mr. Hancock sought permission to appeal from an order of His Honour Judge Hodge QC dated 30 September 2019, in which it was ordered that Mr. Hancock provide vacant possession of certain properties, and pay sums due under certain finance facilities to Promontoria.

4

At the hearing, following submissions by counsel for both parties, I refused Mr. Hancock's PTA Application but reserved judgment on Promontoria's Bankruptcy Appeal. This judgment sets out my reasoning with regard to both matters.

Background and Procedural History

5

The Bankruptcy Appeal and the PTA Application share a common factual background.

6

Pursuant to the terms of a facility letter dated 12 November 2013, Mr. Hancock borrowed the sum of £1,591,882 from AIB Group (UK) Plc (“AIB” and the “Facility”). The Facility was intended to renew and re-finance various existing loans Mr. Hancock had taken out with AIB in order to finance his investment property portfolio. As required under the terms of the Facility, Mr. Hancock granted “all monies” legal charges (the “Charges”) in favour of AIB over three properties (together, the “Properties”), namely:

i) 60a Chapel Road, Garston, Liverpool L19 2LG;

ii) 2 Granville Road, Garston, Liverpool L19 1RS (also known as 60 Chapel Road); and

iii) 32 Island Road, Garston, Liverpool L19 6PA.

The Charges conferred on AIB the right to assign the whole or any part of the benefit of the Charges.

7

By its terms, Mr. Hancock was required to repay the Facility in full by 6 November 2014, by way of monthly repayments of capital of £5,340. Interest was agreed to accrue at 3% above AIB's Managed LIBOR Base Rate, but would not be payable until the end of the term, sale of the Properties or “clearance” by other means.

8

Mr. Hancock did not repay the Facility in full by 6 November 2014. On 30 June 2016, AIB agreed to extend the deadline for repayment of the Facility until 31 December 2016.

9

On 16 February 2018, and as part of the transfer of a wider portfolio of various loans and securities, AIB transferred its rights and remedies under the Facility to Promontoria pursuant to a global deed of assignment (the “Deed of Assignment”).

10

On 19 February 2018, AIB wrote to Mr. Hancock giving him notice of the assignment, and informing him that Promontoria had retained Link ASI Limited (“Link”) as its portfolio and asset management agent. On 10 May 2018, Link wrote to Mr. Hancock referring to the transfer of the Facility to Promontoria and informed Mr. Hancock of the new loan account reference number which had been assigned to the Facility. Link wrote to Mr. Hancock again on 14 June 2018 referring to the outstanding balance owed by Mr. Hancock in respect of the Facility and sought confirmation of Mr. Hancock's availability to meet with Promontoria to discuss proposals for the repayment of the liabilities.

11

On 12 July 2018, Link wrote to Mr. Hancock demanding repayment of the outstanding balance due under the Facility, which at that time was just over £1m. When Mr. Hancock did not meet the demand, on 10 August 2018, Promontoria appointed receivers over the Properties pursuant to the Charges granted by Mr. Hancock to secure the Facility.

DDJ Williams' Decision

12

On 15 August 2018, Promontoria served a statutory demand in bankruptcy on Mr. Hancock in respect of the part of his debt owing under the Facility which was not secured by the Charges (the “Statutory Demand”). Mr. Hancock applied to set aside the Statutory Demand on 24 September 2018. That application was heard by DDJ Williams on 30 January 2019, who reserved judgment. At a subsequent hearing on 14 May 2019, DDJ Williams provided his order and a draft judgment to the parties. DDJ Williams handed down a revised judgment (the “Set Aside Judgment”) on 11 July 2019.

13

In the Set Aside Judgment, DDJ Williams found against Mr. Hancock on a large number of the issues that he had raised, but upheld his challenge to the Statutory Demand on a single ground. DDJ Williams found that Mr. Hancock had established a dispute on substantial grounds with respect to whether the Deed of Assignment had been validly executed and was thus effective to transfer the rights under the Facility to Promontoria.

14

That decision turned on the fact that Promontoria had redacted parts of the Deed of Assignment which it had exhibited to its evidence. In particular, as well as the redaction of some commercial terms, the name and signature of Promontoria's signatory was redacted. The name of Promontoria's witness was provided, although her signature and address were redacted. The signatures of AIB's signatories and witness were redacted, but the names of the signatories and of the witness were visible. Promontoria asserted that the redactions were necessary in order to prevent other debtors copying the signatures with a view to seeking to escape liability under their own lending arrangements by forging the signature of the person acting on behalf of Promontoria.

15

In dealing with this contention, DDJ Williams referred to the approach of the then Vice Chancellor, Mr. Justice Barling, in Hancock v Promontoria (Chestnut) Ltd [2018] EWHC 2934 (Ch). In that case, Mr. Hancock similarly sought to question the title of an assignee of the rights against him under a loan agreement. Barling J dealt with the point in the following way, at [49]–[51],

“49. The next issue in relation to the deed related to the redactions made. This is one strand of the new argument that the deed does not establish, and indeed the respondent has not established via the deed or otherwise, that it acquired title to the debts. The point is now sought to be raised for the first time on appeal.

50. The argument here relies on the fact that the signatures of the representative persons signing on behalf of the parties have been redacted. I have already referred to the reasons Mr. Parr gave in evidence for the signatures being redacted, i.e. for the purpose of security. It is the respondent's case that those signatures, albeit redacted, belong to persons who are otherwise identified, in particular, the Bank's and the respondent's representatives. Thus, it is argued, the appellant is in a position, should he wish, to check the credentials and authorisations of those individuals to sign on behalf of the parties in question.

51. In my view this aspect of the appellant's reliance on the redactions is a non-starter. Whether or not the caution on the part of the Bank and the respondent is justified, it is clear on the evidence, supported by a statement of truth, that the identified individuals signed the deed. In those circumstances the point cannot assist the appellant.”

16

At paragraphs [77]–[80] of the Set Aside Judgment, DDJ Williams purported to apply this reasoning to the instant case. He decided that, as both the signature and name of Promontoria's signatory to the Deed of Assignment had been redacted, Mr. Hancock was not in a position to check the credentials and authority of the person who had signed the Deed of Assignment on behalf of Promontoria. This, DDJ Williams held, meant that Mr. Hancock had established a dispute on substantial grounds with respect to whether the Deed of Assignment had validly transferred AIB's rights under the Facility to Promontoria.

17

DDJ Williams did, however indicate (at paragraph [78]) that a way in which Promontoria could address the issue would be either to provide a copy of the Deed of Assignment in which the signature and identity of the signatories was not redacted, or to provide other evidence sufficient to satisfy the court of the identity of the signatories.

18

DDJ Williams granted permission to Promontoria to appeal his decision. This is the Bankruptcy Appeal which I shall consider below.

HHJ Hodge QC's Decision

19

Separately, on 4 February 2019, Promontoria commenced CPR Part 55 proceedings for the debt due under the Facility and for possession of the Properties (the “Part 55 Proceedings”). On 12 March 2019, Mr. Hancock filed three defences in response to the Part 55 Proceedings, one in respect of each of the three Properties (the “Defences”). The Defences made materially identical arguments in relation to each of the Properties.

20

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2 cases
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    ...at least to any distinct legal principle, the cases of Webb v Spicer (1849) 13 QB 886 and much more recently Promontoria v Hancock [2021] EWHC 259 (Ch) support the view that where a party has taken the benefit of a deed, it is often unconscionable for him to refuse to take its burdens bec......
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    ...is what happened in Dowling v Promontoria (Arrow) Ltd 120 [2017] BBIR 1477 and in Promontoria (Pine) Designated Activity Co v Hancock (2021) EWHC 259 (Ch), where: “[f]aced with the straightforward task of proving its title to the assigned debt, [Promontoria] inexplicably chose to redact mor......

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