Scottish Sheriff Court Decisions

SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT BANFF

Judgement

Of

Sheriff Philip Mann

In causa A23/12

NRAM otherwise known as NORTHERN ROCK (ASSET MANAGEMENT) PLC and previously known as NORTHERN ROCK PLC a company registered under the Companies Acts (Company No. 03273685) and having its Registered Office at Northern Rock House, Gosforth, Newcastle Upon Tyne

Against

Stuart Douglas Fowlie formerly residing at the Pines Lodge, Raglan, roes Bychan, Usk, Gwent, NP15 2JQ and whose present whereabouts are unknown

Banff 25 September 2012

1. This is an ordinary action in which the Pursuer craves the court to find and declare:

i. that in respect of certain heritable property the defender is in default within the meaning of Standard Condition 9(1) of Schedule 3 to the Conveyancing and Feudal Reform (Scotland) Act 1970;

ii. that the property, though a residential property, is not occupied and is not being used to any extent for residential purposes;

iii. and as such, the Pursuer has a right to sell......and to exercise all powers competent to a creditor in lawful possession of the subjects under the Conveyancing and Feudal Reform (Scotland) Act 1970.

2. It is in precisely the terms of the action which was before Sheriff Braid in the case of Accord Mortgages Limited v Edwards 2012 G.W.D. 22-445, the official transcript of which can be accessed at http://www.scotcourts.gov.uk/opinions/A59_12.html. In that case Sheriff Braid, with whom I agree, held that where a Pursuer maintains that, as at the date of raising action, residential property is, in fact, unoccupied he is entitled to claim that the property is not being used to any extent for residential purposes. That being the case the pursuer is entitled to proceed by way of action for declarator and is not required to follow the procedure set out in section 24(1B) of the 1970 Act. The pursuer, however, takes the risk that if it turns out that the property is occupied for residential purposes the action will turn out to have been incompetent.

3. This case came before me today in chambers on the pursuer's motion for decree in absence, the defender having failed to lodge a notice of intention to defend within the period of notice. In considering the pursuer's motion I have noted that when presenting the initial writ for warrant the pursuer had lodged an inventory of productions comprising various documents including a Field Agent Report and a Sheriff Officer Report both of which concluded that the subjects were unoccupied. That seems to me to be an appropriate way to proceed. In applications under section 24(1B) of the 1970 Act valuable protective rights are given to debtors and entitled residents by way of requiring the creditor to comply with certain pre-action requirements before making an application to the court. In such actions section 24(3) of the 1970 Act requires that notices be served on the debtor and occupier in Forms E and F. These forms, inter alia, advise the debtor and occupier of their right to make representations to the court including that it is not reasonable to grant the orders sought. What concerns me is that if these forms are not served then the debtor and occupier, in ignorance of their rights, may elect not to oppose an action raised as an ordinary cause. It seems to me, therefore, that it is a matter of some importance that creditors are not allowed to raise proceedings by way of declarator by ordinary cause unless they are in a position to demonstrate that, prima facie, the subjects are unoccupied and thus not being used for residential purposes.

4. I mention one other matter for the sake of completeness. Rule 3 of the Act of Sederunt (Sheriff Court Rules) (Enforcement of Securities over Heritable Property) 2101/324 provides that an application or counter-application under Part II of the 1970 Act other than in terms of sections 24(1B) and 24D(1) (that is, other than relating to property used to any extent for residential purposes) must be brought as an ordinary cause where any other remedy is craved and as a summary application where no other remedy is craved. There is, therefore, a question whether or not this action is an application under Part II of the 1970 Act. If it is then it is incompetent as it should have been raised as a summary application

6. I have come to the view that an action of declarator such as this cannot be described as an application under Part II of the 1970 Act. This is an action at common law for declarator that the pursuer has acquired certain rights under the 1970 Act. It is not an application for enforcement of any such rights. Part II of the Act nowhere refers to or seeks to regulate such an action of declarator.

7. I have accordingly granted decree in absence.

Sheriff Philip Mann