Assignation of “all sums due” securities: a silver bullet for OneSavings?Back to News Listing
Much consternation has been caused by the decision of Sheriff Mann in OneSavings Bank v Burns https://tinyurl.com/ybukpe6l . Sheriff Mann ruled that an assignation of an “all sums due” standard security which did not specify the sum outstanding at the date of the assignation was invalid, and did not effectively convey the standard security. This is potentially problematic: many lenders have, in recent years, sold loan books by way of assignations which, if Sheriff Mann is correct, did not actually carry the securities covering same.
However, a potential panacea now exists. In the case of Shear v Clipper Holdings, the pursuer sought interim interdict against the operation of a calling up notice, relying on OneSavings and contending that Clipper did not have title to enforce the security. The matter was argued before Lord Bannatyne in the Commercial Court on 25 May 2017. The following day, Lord Bannatyne issued an ex tempore decision, refusing the motion for interim interdict. His Lordship is expected to write on the matter, but in the meantime the salient points from the judgment which he read from the bench are these:
Roddy Dunlop QC of Axiom appeared for the successful defenders, Clipper Holdings.
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