Sheriff Principal rules 'sheriff went too far too quickly by granting decree': Bank of Scotland v. Gallacher judgment

Sheriff Principal Bowen Q.C. has ruled that a sheriff at Glasgow Sheriff Court 'went too far too quickly by granting decree on the basis of the information he had before him'.

In the case of Bank of Scotland v. Gallacher, the defender's solicitor has sought a continuation, which was refused and had thereafter sought to state a defence and fix an evidential hearing; the sheriff had refused to fix a proof and proceeded to grant decree on the information before him, which included undisputed mortgage arrears of over £18,000.

The defender's solicitor had argued that the court at first instance had failed to properly take into account certain factors which he was required to do by statute before he proceeded to exercise his discretion. It was argued that the sheriff had proceeded to grant decree on the basis of certain assumptions, when he ought to have fixed an evidential hearing to reach a proper determination of questions of fact. Nothing had been said to the sheriff about the ability of the defender to find alternative accommodation (one of the factors in s.24(7) of the Conveyancing and Feudal Reform (Scotland) Act 1970).

The Sheriff Principal had sympathy with the view that the circumstances as disclosed were sufficient to raise substantial doubt as to whether there was any real prospect of the defender meeting his obligations under the standard security within a reasonable time. But the Sheriff Principal said 'I am clear that the requirement to "have reagrd to" the ability of the defender to secure alternative accommodation cannot be met by a lack of information or the absence of a request for a continuation to secure accommodation ... The provision of [the ability of the debtor and any other person residing at the security subjects to secure reasonable alternative accommodation, 24(7)(e), 1970 Act] is, however, an important one to which more than lip service should be paid'.

Agents for the pursuers were Irwin Mitchell Solicitors - Ms Scott; while the defender was represent by Govan Law Centre - Mr Dailly. The judgment is available here as a PDF.

GLC to participate in free Scottish mortgage repossession conferences

GLC's Principal Solicitor will be speaking at a free conference focussing on recent legislative and case law changes in Scottish mortgage repossession law, in Glasgow on 3 December 2012.

The event is being hosted and sponsored by the Carrington Dean Group. Mike will provide a review of recent Scottish case law, with a focus on statutory pre-action requirements and the issue of legal costs and charges in repossession cases. Other confirmed speakers include, Citizen Advice Scotland, Irwin Mitchell Solicitors and Tom McEntegart, managing director of TLT Solicitors. The conference will include an afternoon panel debate session chaired by advocate and Scottish Legal Action Group chairman, Robert Sutherland.

The conference will be held in the Laprohaig Theatre, Teacher’s Building, Glasgow on the December 3, 2012. A shorter seminar will be held in the Ramada Encore Hotel in Inverness on December 6. Anyone interested should contact alanmcintosh@carringtondean.com in the first instance. Both events are free to advisers and solicitors working in the industry.

Aberdein Considine refuse to give copies of pre-action mortgage documents in Scottish repossession cases

Govan Law Centre (GLC) is concerned to note a change in practice by one of the panel firms of solicitors who represent lenders in Scottish mortgage repossession actions. Aberdein Considine and Co., Solicitors have advised us that they will no longer provide copies of formal mortgage correspondence sent to customers before court proceedings were raised. This change in practice will adversely affect many of our clients in future.

We are required to check such correspondence in order to properly advise our clients of their legal rights.  Not all customers retain all such documentation, particularly where they are under financial pressure or have health or other problems. All other lender’s firms in Scotland currently provide defenders' advisors with copies of pre-litigation correspondence when requested, which is often available in electronic form and can be readily provided by e-mail.

GLC is concerned to note that Aberdein Considine and Co., Solicitors will no longer provide us with copies of formal pre-litigation letters send by their clients. The Financial Services Authority's MCOB rules requires authorised firms to deal fairly with any customer who is arrears of his or her mortgage (R13.3.1).  This extends to agents acting on behalf of firms. Firms are also expected to liaise with a customer’s advisor regarding payment or sale shortfalls.  

GLC doesnot believe that the policy approach of Aberdein Considine and Co., is in the interests of lenders' customers and appears to be at odds with the FSA’s Principles of Business (Principle 6).Accordingly, GLC intends to formally take these policy issues up with lenders in the first instance. 

Free know-how on Scottish repossession competency arguments disseminated by GLC

In response to requests, having regard to our public legal education ethos, and considering the wider potential public interest and the need for advisers to consider the potential need to protect the interests of their own clients, Govan Law Centre (GLC) is making its competency arguments in the test cases of NRAM v. Millar and RBS plc v. McConnell publicly available for free (see below).

The decision of Sheriff Deutsch in the said test cases is expected sometime in February 2012, and advisers will need to consider what steps, if any, they may wish to take to safeguard the interests of their own clients pending the outcome of that judgment, and any implications and developments that may arise following thereon.

GLC's arguments are presented in the format of an illustrative set of Defences (known as 'Answers' as repossession procedure in Scotland is now by way of summary application procedure).  Please note the disclaimer, namely that this document contains information only and does not constitute legal advice; you should obtain your own independent qualified legal advice from a Scots law practitioner and must not rely upon this document which is illustrative only.

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