136. Entries of satisfaction and release of property from charge

Question 1

136. Entries of satisfaction and release of property from charge

Answer 1

General overview
[136.01] Where the loan has been repaid in full or in part or the property charged has been released in whole or in part, a notice in prescribed form has to be lodged with the registrar. The statement lodged by the company constitutes sufficient evidence of that payment, satisfaction or release. Although the person entitled to the charge may present evidence that the indebtedness is still outstanding, he will have an uphill task explaining why he lodged the “section 136” statement in the first place. Presumably, he will apply to the court under s 137 to rectify the misstatement of the particulars in the statement of satisfaction.

Question 2

Loan has been repaid or the charged property released

Answer 2

136.02] It states that the chargee has to endorse the discharge of the debt by the chargor. What if the chargee is unable to endorse as such because it is missing, dead or refuses to endorse or has been merged with another company – how can s 136(2) be complied with? The Report of the Steering Committee for Review of the Companies Act, April 2011, para 31 suggested that the court should verify the release, satisfaction or payment of the debt owing by the chargor.