Section 12 – Performance in good faith where claim assigned cannot be transferred by intimation
73.This section protects debtors who in good faith pay the assignee as a result of an assignation document that should have been registered (see section 3(8) of the Act) but was not.
74.Subsection (1) sets out the two criteria which must each be met in order for the protection in subsection (2) to apply:
The first criterion is that the assignation relates to a claim of a type prescribed by the Scottish Ministers under section 3(8) of the Act as being a claim that can only be transferred by registration, but the assignation has not been registered and this is the only reason that the claim has not transferred,
The second criterion is that, despite the claim not having transferred, the debtor performs in good faith to the (supposed) assignee (perhaps because the assignation has been intimated).
75.Subsection (2) provides that the debtor is discharged from the claim (or part) to the extent of the performance to the assignee. This also extends to co-debtors (see paragraph 65 of these Notes).
76.Subsection (3) sets out that the debtor will not be in good faith if the debtor knows that the assignation has not been registered, and that registration was required in order to transfer the claim, and still performs to the purported assignee (who is not the holder).
