The transfer of Loan Assets from NAB/Clydesdale to the various Promontoria entities is a NOVATION and is therefore invalid.
NOTE: This analysis is provided by one of our members. DO NOT rely on this as advice, always seek your own independent legal advice on these matters.
This is an important paper for all those NAB/Clydesdale (and Yorkshire) victims who had TBL loans converted to overdraft facilities and subsequently transferred to one of the numerous Promontoria (Cerberus) entities.
Your overdraft facility letter
"The Bank may (1) assign any of its rights or benefits and /or (2) transfer by novation any of its obligations, under this letter or any other Relevant Document to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities and other financial assets or to any other person or persons and /or (3) otherwise deal with its rights, benefits and/or obligations under this letter or any other Relevant Document, in whole or in part".
"each of the Seller and /or Clydesdale (as applicable): (i) are released of all of their respective obligations under the Relevant Documents; and (ii) resigns from each Relevant Document in its capacity as the Lender "
"the Buyer becomes a party to each Relevant Document in the capacity of the Lender and is bound by obligations equivalent to those from which the Seller and/or Clydesdale are released under paragraph (b) above--------------"
"The Buyer agrees that with effect on and from the Effective Time: (a) it accepts the assignment of rights ----------------------------" (b) it shall assume, perform and comply with the terms of and the obligations of the Lender under the Relevant Documents as if originally named as a party in the Relevant Documents in place of the Seller and/or Clydesdale (as applicable) --------------"
Assignment and novation are different concepts in law.
Notwithstanding what it says in the title of the Deed, a NOVATION of obligations has taken place without your CONSENT and as a consequence the transfer is INVALID.
There is now an un-redacted copy of the transfer deed in the public domain which is very helpful.
Redacted clause 5 is the key >
Remember NAB, the seller, does not own your loan, it still resides with Clydesdale. Clause 5 places an undertaking on Clydesdale to
"take reasonable steps to obtain the consent of any third party or entering into any transfer documentation in respect of any relevant loan asset".
It also requires this to be done within 3 months of completion.
As borrower and guarantor you are the third party. In every case Clydesdale did not seek or obtain third party consent which is probably why the clause was redacted. NAB, Clydesdale and Promontoria will have been well aware that no third party would consent to a transfer of their loans to an unregulated off shore entity let alone a US vulture fund.
In summary therefore the Deed confirms that Obligations were transferred and Promontoria took the place of Clydesdale as Lender – the Deed is therefore a Novation and was executed without your consent. It is invalid.
- Promontoria cannot rely on a Banking Licence held by its agents.
- The Licence held by Engage only authorises them the administer certain regulated mortgage products and certain regulated insurance products. Engage’s licence does not extend to the operation of overdraft facilities.
- any transferring lending would be managed in accordance with the standards of a reasonably prudent mortgage lender managing facilities of the type made available to the transferring borrowers
- any transferring lending would be managed in compliance with all applicable laws and regulations, including the directions of any regulatory authority
- Engage Commercial (a trading name of Pepper UK Ltd which is regulated by the FCA) holds all licences, consents, approvals and permissions as are required in order to service the transferred lending on behalf of Promontoria
" As you have highlighted, clauses 2.2(b) and (c) and 2.2(b) of the Assignment Deed provide for Promontoria to assume and perform the obligations of the Former Lenders but these clauses are not intended to constitute a novation of those obligations"