Section 15 – Right to withhold performance until information as to assignation is provided
85.This section provides protections for debtors who:
are unsure about the veracity of the intimation made to them (subsection (1)),
are unsure whether an assignation document has been granted in a case where intimation has not been made to them (subsection (5)), or
are unsure whether the assignation of a claim is conditional and/or whether the condition has been satisfied (subsection (8)).
86.The first information right is found in subsection (1). It will often be the case that the debtor has little or no knowledge of an assignee, either before or after an assignation document is intimated. There is no requirement to include a copy of the assignation document for the purposes of intimation. Subsection (1) therefore applies where notice of an assignation document having been granted has been given to the debtor by the assignee rather than the assignor. It has the effect that the debtor may request from the assignee reasonable evidence of the assignation document having been granted.
Example
George owes Henry £500. Henry assigns the claim for payment to Imogen, who registers the assignation document in the RoA, and then assigns the claim to Jay, who intimates to George. George can request reasonable evidence of the assignation document granted by Imogen to Jay.
87.Subsection (2) gives an example of “reasonable evidence”, namely written confirmation from the assignor of having granted the document. There is no express requirement to provide a copy of the assignation document as it may contain information confidential to the assignor/assignee or a third party.
88.Subsection (3) makes it clear that the right to request information in subsection (1) applies equally to a purported notice of assignation and a purported assignee as it does to a valid notice of assignation and a “real” assignee.
89.Subsection (4) sets out the remedy where no reply is received to an enquiry under subsection (1). Where an assignation document has been granted, the debtor will be entitled to withhold performance from each of the assignor and the assignee until the evidence is provided by the assignee. Where an assignation document has not been granted, the debtor will be entitled to withhold performance until either the purported assignee or the purported assignee confirms in writing that an assignation document has not been granted in respect of the claim. This deals with the situation where the “assignee” is a fraudster who wants to prejudice the holder of the claim by making a fake intimation, or where the intimation has been made in error.
90.The second information right is found in subsection (5). Subsection (5) applies where the debtor has not received formal intimation of the assignation, but has reasonable grounds to believe that an assignation document has been granted. The debtor may state those grounds to the supposed assignor, and ask that party to confirm the position in writing. If an assignation document has been granted then, if the assignor provides the requested written statement, subsection (6) requires the statement to include the name and last known address of the assignee. Under subsection (7), if a written statement is requested under subsection (5), the debtor may withhold performance until a statement confirming whether the claim is the subject of an assignation document and (where applicable) fulfilling the requirements of subsection (6) is received.
91.The third information right is found in subsection (8). A claim that is the subject of a valid assignation document transfers upon the last of the requirements of section 3(2) being met. Where an assignation document is subject to a condition, that may be the last requirement to be met. Knowing that an assignation document has been granted in respect of the claim, and even that it has been intimated or registered, will only provide the debtor with part of the answer; they may still not know to whom they should perform. Subsection (8) therefore allows a debtor to ask the assignor or assignee to provide a written statement as to whether the assignation is subject to a condition. It also allows them to ask whether the condition has been fulfilled. Under subsection (9), performance can be withheld until a statement confirming the position has been received.
92.A request for evidence, or a statement of grounds, need not be in writing. The written statements which are provided in response can be provided electronically; the only requirement is that they are in writing.
93.The right to withhold performance under this section is a free-standing right and separate from the protections provided for by sections 11 to 14 of the Act.
94.However, where there are co-debtors then subsection (10) provides that it is only the debtor who actually makes an information request under subsection (1), (5) or (8) who is entitled to withhold performance pending the provision of that information.
