Statutory demands—assignees of debt beware (Dowling v Promontoria (Arrow) Ltd)

Statutory demands—assignees of debt beware (Dowling v Promontoria (Arrow) Ltd)

The decision in Dowling v Promontoria (Arrow) Ltd [2017] Lexis Citation 292, [2017] All ER (D) 82 (Sep), which resulted from an application to set aside a statutory demand, demonstrates that assignees of debt need to exercise care if they are to enforce their claim by the summary bankruptcy route.

The decision highlights practical points that assignees should bear in mind, as well as the impact of the purview doctrine in relation to guarantees.


The Bankruptcy High Court set aside a statutory demand, which hadbeen served on the applicant guarantor, where the respondent, having hadits title put in issue, hadfailed properly to prove its status as assignee in respect of the debt forming the subject matter of the statutory demand. The court further held that the applicant hadraised a strongly arguable case that a second facility, which the respondent relied on in respect of the statutory demand, was not within the purview of the first guarantee and, further, that any rights which the respondent might have hadto enforce the applicant's obligations under the first guarantee appeared to be statute barred.

What are the practical implications of this case?

Creditors who are the assignee of a debt should ensure that:

  • they are able to establish a chain of title, entitling them to pursue the debt
  • the dates on which the applicable limitation period commences and expires are noted, and that action is taken by the assignee before the latter date to prevent being statute barred.

Further, where a lender grants further facilities to a borrower and the borrower’s pre-existing liabilities are guaranteed, to ensure that either the further facilities are covered by that existing guarantee, or that a fresh guarantee is obtained.

What was the background to this case?

The applicant, Mr Dowling, was an Irish property developer. He hadgranted an unlimited personal guarantee on 6 December 2006 (the first guarantee) in favour of Anglo Irish Bank Corporation Plc (the bank) for the debts of a company called Danum

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