Citation: [2024] UKPC 33
Success for David Thomas KC in the Privy Council
David Thomas KC has successfully argued before the Privy Council that the decision of the Court of Appeal of Trinidad and Tobago in EMBD v Junior Sammy Contractors should be upheld.
The Judge, upheld by the Court of Appeal, had granted Junior Sammy summary judgment on seven unpaid interim certificates relating to infrastructure works for a major housing development in Trinidad. The Respondent government company argued before the Privy Council that the judgment should be set aside because there was reason to believe that the certificates had been obtained fraudulently and in any event Junior Sammy had no right to bring the claim because there had been an absolute assignment of the debt to their bank.
In a judgment handed down on 29 October 2024 the Privy Council (Lord Reed, Lord Hodge, Lord Leggatt, Lord Stephens and Lady Rose) dismissed the allegations of fraud as being of no substance. However, the judgment gives helpful guidance on the legal principles of the law of assignment and the distinction between an absolute legal assignment and an assignment by way of charge only. The board approached the matter by considering all the terms of the relevant instruments. Giving the judgment of the Board Lord Stephens found that there were several provisions of the documents concerned - a factoring agreement, a notice of assignment and an assignment agreement - that indicated an intention that the assignment was absolute, not least the parties being termed “buyer” and “seller” and the repeated use of the words “assigned absolutely” and similar. However, the relevant instruments had to be construed as a whole, and the essential question was whether the bank had granted a loan secured by a charge on the debt or had actually acquired the debt owed by the Employer to Junior Sammy. The phraseology of absolute assignment was supportive of an intention to pass all rights in the debt to the assignee, but it was not determinative.
There was other terminology that suggested that the transaction was intended to be a loan such as the use of the word “facility” and provision for a “facility fee”. Further the “Facility Amount” was less than the entirety of the debt. A key provision that suggested a loan secured by a charge was that the factoring agreement provided that it was Junior Sammy that retained the right to bring proceedings against the Employer. This was a powerful indicator that the assignment was not absolute. The Board did not consider that existing authorities went so far as to say that the retention of such a right was determinative that an assignment was not absolute. In the current case there were a number of provisions indicating the intention was for a charge only and so it was unnecessary to express a concluded view on the matter. However, the Board stated that when the matter does arise for decision much may be said in favour of the proposition that it did entail that the assignment was by way of charge only.
