Scottish Sheriff Court Decisions

APPLICATION BY GLASGOW CITY COUNCIL UNDER SECTION 60 OF THE DEBTORS (SCOTLAND) ACT 1987 FOR A CONJOINED ARRESTMENT ORDER [2000] ScotSC 12 (1st May, 2000)

D436/99

NOTE:

An application was made to the Court in terms of section 60 of the Debtors (Scotland) Act 1987 (the Act) for a Conjoined Arrestment Order. Glasgow City Council had effected two arrestments in their own hands in which the wages of one of their employees were attached. Each arrestment had been effected under section 46 of the Act. The question which arose was whether it was competent for an employer to arrest wages owed to its employee, which employee was also a debtor of the employer. Could the City Council arrest in their own hands?

The applicants' solicitors were good enough to provide for the benefit of the Court a judgment by Sheriff Jessop dated 30 November 1990 and the opinion of Mr Maher, advocate, dated 5 April 1990. Having considered that judgment and the opinion and also the terms of the Act I was persuaded that it was competent for an employer to arrest wages in terms of section 46 of the Act in his own hands.

At common law it was generally accepted that a creditor could not arrest wages, or indeed other items of moveable property which were in his own hands. Surprisingly there was no clear authority expressing this proposition. In a footnote to the report of the case of Lochhead v Graham 1883 11R 201, the rationale for the proposition was said to be that an arrestment is a diligence in personam which operated as a restraint against third parties. Such third parties were prohibited from performing the obligations in favour of the debtor until the right of the arresting creditor had been satisfied. This was then contrasted with a poinding. A poinding was said to be a right in rem. Thus goods in the possession of the creditor could be poinded by that creditor. In other words the effecting of an arrestment was an incomplete diligence in that until such time as there was a decree of furthcoming the creditor had no right in the wages or goods arrested. All he had was an order restraining the holder of the goods from dispossessing himself of the arrested goods. The new diligence introduced by section 46 of the Act differs from an arrestment at common law in two important respects. Firstly, the arrestment is authority for the arrestee to pay over the arrested funds to the arresting creditor. No furthcoming is necessary. In the second place an arrestment at common law attached only such money or goods which were in the possession of the arrestee and for which, at the time of the arrestment, the arrestee had a duty to account to the debtor. In terms of section 46 an arrestment was effective against wages which might become due in the future. Thus weekly or monthly arrestments are not necessary. Wages for which the employer comes under a duty to account to the debtor in the future, are also attached until such time as the arresting creditor's decree is satisfied.

Erskine, III, i, 2, states: "A real right, or jus in re, whether of property or of an inferior kind - as servitude - entitles the party vested with it to possess the subject as his own; or, if it be possessed by another, to demand it from the possessor, in consequence of the right which he has in the subject itself; whereas the creditor in a personal right or obligation has only a jus ad rem, or a right of action against the debtor or his representatives, by which they may be compelled to fulfil that obligation, but without any right in the subject which the debtor is obliged to transfer to him." It therefore seems to me that the arrestment introduced by section 46 of the Act is much closer to a real right than a personal right.

It is also instructive to consider the interpretation section (section 73) of the Act. One there finds "employer" being said to mean "any person who pays earnings to a debtor under a contract of service or apprenticeship....". Had it been Parliament's intention to exclude the employer of the debtor from this definition it would have been very easy so to do. Parliament not having made such an exclusion must be deemed to have intended that the employer of the debtor is included in the definition. That being so it seems to me that on this basis alone a creditor can attach the earnings of his employee by making use of the diligence introduced by section 46 of the Act.

Accordingly the application for a conjoined arrestment falls to be made given that the arrestments are competent.