OF THE LAW SOCIETY OF SCOTLAND - The Journal Online

More documents

Recommendations

Info

Journal Repossession Serving notices under the Mortgage Rights Act May 2002 Volume 47 No 5 22 Mark Higgins clarifies whether debtors can avoid repossession simply by refusing to accept a recorded delivery notice Of all the matters changed by the Mortgage Rights (Scotland) Act 2001, that which has received the most publicity is how notices will be served. In particular, it has been suggested that debtors in arrears can avoid repossession by simply refusing to answer their door to receive a recorded delivery notice and cannot then receive service by way of sheriff officer. A distinction requires to be made between the service of a calling-up notice, notice of default or court proceedings on the one hand and service of notices to occupiers and explanatory notices to accompany court proceedings on the other. In other words, there is a difference in the law as it applies to the existing forms and procedures to be followed, which have been adjusted by the 2001 Act, and the new forms which have been introduced by the 2001 Act. Service of forms adjusted by the 2001 Act and of court proceedings The Conveyancing and Feudal Reform (Scotland) Act 1970 provides that service of a calling-up notice may be made by delivery to the person on whom it is desired to be served or the notice may be sent by registered or recorded delivery post to him at his last known address1 . In certain circumstances, service should be made on the Extractor of the Court of Session. Section 21(2) of the 1970 Act provides that the notice of default “… shall be served in the like manner and with the like requirements as to proof of service as a calling-up notice.” In the case of court proceedings under the 1970 Act, they may be served by the normal rules governing service of writs2 . In the case of court proceedings under the Heritable Securities (Scotland) Act 1894, service of the writ again falls to be governed by the standard rules on service3 . Although the form of calling-up notice and notice of default are revised by
the 2001 Act, none of the rules on service detailed above is changed. It is therefore clear that service of calling-up notices and notices of default continue to be governed by the 1970 Act and that either recorded delivery or personal service of those notices is entirely competent under section 19(6) of the 1970 Act. Similarly, as regards service of court writs (as opposed to the notices specified to accompany them), there is nothing in the 2001 Act which precludes service by the normal service methods, including by sheriff officer4 . It is therefore submitted that it is incorrect to say that personal service is now incompetent generally in repossession actions or, indeed, that there is any change to the existing methods of service of calling-up notices, notices of default or court proceedings. Service of forms introduced by the 2001 Act These forms include firstly each of the forms which must be served on the occupier, namely Forms BB & F of Schedule 6 to the 1970 Act and Form 2 of Part 2 of the Schedule to the 2001 Act. Secondly, the forms include the forms which must be served along with court proceedings, namely Form E of Schedule 6 to the 1970 Act and Form 1 of Part 2 of the Schedule to the 2001 Act.There are in fact three arguments as to how service of these notices should be effected, each of which is considered below. Given the confusion which has arisen over this issue, it is worth repeating the relevant statutory provisions in full. The first argument is based on a literal reading of the new provisions in relation to service, inserted into the 1970 Act by the 2001 Act. Section 24 of the 1970 Act now provides: “(3) Where the creditor applies to the court under subsection (1) above, he shall… ■ serve on the debtor and (where the proprietor is not the debtor) on the proprietor a notice in conformity with Form E of Schedule 6 to this Act, and ■ serve on the occupier of the security subjects a notice in Journal Repossession conformity with Form F of that Schedule. (4) Notices under subsection (3) above shall be sent by recorded delivery letter addressed- ■ in the case of a notice under subsection (3)(a), to the debtor or…proprietor… ■ in the case of a notice under subsection (3)(b), to ‘The Occupier’…” The argument goes that as the Act simply requires the notices to be sent by recorded delivery, the creditor does not require to establish receipt by the debtor, whether through the recorded delivery service or otherwise. The creditor fulfils his requirements under the Act when the letter is sent.This argument is supported by Cathie Craigie5 and by the Scottish Executive. This argument is an attractive proposition on a reading of s24(4) but matters are complicated by the mandatory requirement on the creditor in terms of s24(3) to “serve…a notice”. Nonetheless, it is submitted that the two subsections must be read together. Doing so suggests that the method of the service mentioned in s24(3) is that provided for in s24(4).This leads to the conclusion that a creditor will indeed have complied with his duties if he simply sends the notices in Forms E & F by recorded delivery irrespective of whether actual service results. The same argument appears to hold good in relation to the notice to the occupier which must accompany service of a calling-up notice or notice of default. The effect of the second argument, if it was successful, would be to make repossession extremely difficult if a debtor did not answer his door to accept recorded delivery packages, or if the debtor or occupier was not present at the subjects for any reason. The nature of the second argument is simply to rebut the premise of the first that sending the explanatory notices which accompany proceedings or the notices to the occupier is sufficient service. If service cannot be effected by recorded delivery, the argument goes, it remains incumbent on the creditor to
Page 1 and 2: VOLUME 47 NO 5 MAY 2002 THE JOURNAL
Page 3 and 4: President’s report Journal Viewpo
Page 5 and 6: Journal News Information from the R
Page 7 and 8: Journal News Obituaries LEONARD ELL
Page 9 and 10: Journal News Authors Wanted The Soc
Page 11 and 12: No increase in funding commitment W
Page 13 and 14: Photographs of people featured can
Page 15 and 16: Sleeping with the enemy Journal Opi
Page 17: etrospective legislation was not be
Page 21 and 22: e: MH@golds.co.uk Journal Repossess
Page 23 and 24: “Some pleasure has been expressed
Page 25 and 26: Minutes of Tender Manson v Skinner
Page 27 and 28: “Back in 1999 when I was elected
Page 29 and 30: Journal New Rules May 2002 Volume 4
Page 31 and 32: Journal President The Preston front
Page 33 and 34: Journal Websites www.scottishlaw.or
Page 35 and 36: Journal IT Opening a target in a ne
Page 37 and 38: Journal Risk Management Omissions c
Page 39 and 40: Journal e: In Practice bruceritchie
Page 41 and 42: Journal Videoconferencing May 2002
Page 43 and 44: Godard, the Academic Director for t
Page 45 and 46: I will be very happy to receive rev

OF THE LAW SOCIETY OF SCOTLAND - The Journal Online

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?