APPEAL BY (FIRST) THERESA STIRLING AND (SECOND) WILLIAM STIRLING AGAINST LANDMARK MORTGAGES LIMITED (FORMERLY NRAM PLC AND NORTHERN ROCK (ASSET MANAGEMENT) PLC)
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2016] CSIH 89
XA19/16
Lady Paton
Lord Bracadale
Sheriff Principal Dunlop QC
OPINION OF THE COURT
delivered by LADY PATON
in the Appeal
by
(FIRST) THERESA STIRLING
Defender and appellant
(SECOND) WILLIAM STIRLING
Entitled resident and appellant
against
LANDMARK MORTGAGES LIMITED (FORMERLY NRAM PLC AND
NORTHERN ROCK (ASSET MANAGEMENT) PLC)
Pursuers and respondents
Defender and appellant: Party
Entitled resident and appellant: Party
Pursuers and respondents: McIlvride QC; TLT LLP
6 December 2016
Dispute concerning calling-up notice and attempted repossession of heritable property
[1] In 2002, the pursuers made a loan to the defender to assist in the purchase of heritable property at 233 Talla Road, Glasgow. The loan was to be secured over that property. Per incuriam, the standard security referred to number 223 instead of number 233. Despite the discrepancy between the title deed and the standard security, the Keeper of the Land Register recorded both, allocating a unique reference number to the heritable subjects. That unique number was correctly stated in the charge certificate.
[2] In 2011, the pursuers presented a summary application in Glasgow Sheriff Court seeking repossession of the subjects with averments that a calling-up notice dated 7 October 2011 had been served upon the defender and had expired without payment. The defender contested the application. After a proof, the sheriff granted decree. The defender appealed to the Sheriff Principal (C A L Scott). The appeal was refused. The defender then appealed to the Court of Session.
[3] At the appeal hearing on 22 October 2013, Mr McIlvride QC on behalf of the pursuers withdrew opposition to the appeal, on the basis inter alia that the calling-up procedure had not complied with current authorities. There was therefore no dispute that the appeal should be allowed. However the defender sought absolvitor from the summary application; the pursuers sought dismissal. Ultimately the court allowed the appeal, recalled the interlocutors of the sheriff and the sheriff principal, and dismissed the application, senior counsel having given the following undertaking:
“McIlvride for the pursuers and respondents stated and hereby states to the court that the pursuers and respondents undertake that they will not at any time in the future seek warrant to exercise any of the remedies competent to a heritable creditor in respect of the subjects owned by the defender and appellant on the ground that the notice of calling up of standard security served upon the defender and appellant on or about 7 October 2011 has expired without payment.”
The court issued a brief opinion (XA46/13), and found the pursuers liable in expenses.
[4] Thereafter in late 2013 and early 2014 the defender corresponded with the pursuers’ solicitors (TLT) about the expenses of that litigation.
[5] In early 2014 the pursuers commenced a fresh calling-up procedure by seeking to have a new calling-up notice dated 21 February 2014 served by recorded delivery upon the defender, and a Form BB (with copy calling-up notice) served upon her husband Mr Stirling as the entitled resident in terms of section 24C of the Conveyancing and Feudal Reform (Scotland) Act 1970, followed by delivery, on 5 March 2014, of a copy of the calling-up notice to the Extractor of the Court of Session. It is this calling-up procedure which is the subject of the present appeal.
[6] On 10 July 2014, the pursuers presented another summary application in Glasgow Sheriff Court, seeking rectification of the error in the description of the subjects in the standard security; declarator that the pursuers were entitled as heritable creditors to enter into possession of the subjects and to exercise remedies under the 1970 Act; and ejection of the occupants. The action was defended. On 26 and 27 February 2015 a proof was held before Sheriff S Reid. Submissions were made on 3 March 2015. Throughout the Proof, the defender represented herself. Mr Stirling had legal representation for a period, and then represented himself.
[7] Evidence for the pursuers comprised productions and oral evidence from their employee, Mr Rutherford. The defender did not give or lead evidence, although she made submissions. Mr Stirling for his part gave oral evidence and referred to productions. Several lines of defence were adopted, the main ones being (i) no jurisdiction; (ii) res judicata; and (iii) failure to serve the calling-up notice on either the defender or Mr Stirling.
[8] On 3 March 2015, having heard submissions, the sheriff granted decree for rectification, declarator as sought, ejection and expenses, and gave an ex tempore judgment. The defender appealed. Mr Stirling also appealed: see paragraph [4] of the sheriff principal’s judgment dated 14 January 2016 (page 143 of the appeal print) superseding paragraph [6] of the sheriff’s note dated 21 April 2015 (page 32 of the appeal print).
The sheriff provided a note dated 21 April 2015 (appeal print pages 31 to 74). The defender lodged a transcript of the evidence (appendix pages 107 to 305).
[9] At the appeal hearing before Sheriff Principal Lockhart on 1 December 2015, the pursuers’ solicitor sought to lodge the original certificate of execution of service of Form BB on the occupier, 233 Talla Road. As recorded in the sheriff principal’s note dated 1 December 2015 (pages 134 to 136 of the appeal print), the pursuer’s solicitor explained that:
“… the question of the service of Form BB had not been put in issue by the entitled resident or the defender in their answers as contained in the closed record (no 12 of process). There was nothing in the answers to challenge the effect on the calling-up notice in the event of no service of the Form BB. This matter had been put in issue now that the position of the entitled resident and the defender had been finally clarified in their written submissions of 26 November 2015. That issue now having been put in issue at appeal, the solicitor for the pursuers stated that she was instructed to tender at the bar the original certificate of execution of the Form BB on the entitled resident.”
The appeal was continued to 2 December 2016 to allow submissions on that matter.
[10] Thereafter, having heard submissions, the sheriff principal issued the following interlocutor (appeal print page 138):
“ … Grants motion made at the bar by the solicitor for the pursuers to lodge execution of service of the Form BB on the entitled resident and assigns it as no 24 of process; allows parties to question Thomas McEntegart, solicitor, Glasgow, in respect thereof …”
Evidence was then led from Mr McEntegart, a solicitor in TLT who had dealt with the service of Form BB. Further submissions were made. The appeal was then continued to 22 December 2015.
[11] On 22 December 2015 the sheriff principal allowed the defender to lodge additional productions and written arguments, and heard submissions. He then made avizandum. He subsequently issued a judgment dated 14 January 2016 (appeal print pages 140 to 162). At the outset, the sheriff principal made an additional finding-in-fact 24A, in the following terms:
“24A. No 24 of process is the certificate of execution of service of the Form BB on the entitled resident dated 21 February 2014”.
The sheriff principal’s judgment contains the following passages:
“ [2] …a previous action between the same parties was dismissed in the Court of Session on 22 October 2013. That case related to a calling-up notice dated 7 October 2011 and the undertaking given by the pursuers not to exercise any of the remedies competent to a heritable creditor in respect of the subjects at 233 Talla Road were based on that notice. The present action is based on a separate calling-up notice dated 21 February 2014. Accordingly there is no merit in the grounds of appeal of res judicata, abandonment, or lis alibi pendens …
[7] … the sheriff … made … findings in fact and law:
(4) The calling-up notice is deemed to have been served upon the defender on 22 February 2014, being the next day after the day of posting, by virtue of the section 19(8) of the Conveyancing and Feudal Reform (Scotland) Act 1970 …
(5) The Form BB (Notice to Occupier), and the copy of the calling-up-notice attached thereto, as prescribed by section 19A of the 1970 Act, is deemed to have been served upon the entitled resident on 22 February 2014, being the next day after the day of posting, by virtue of the sections 19(8) and 19A(2) of the 1970 Act …
(6) The defender has failed to comply with the calling-up notice.
(7) The defender is in default within the meaning of standard condition 9(1) in Schedule 3 to the 1970 Act.
(8) The defender has entered into default in terms of section 5(1) of Heritable Securities (Scotland) Act 1894 …
(9) In respect of the present proceedings, the pursuers have complied with the pre-action requirements prescribed by virtue of section 24A of the 1970 Act and section 5B of the 1984 Act …
[8] … with the two exceptions undernoted, I agree entirely with all the conclusions which the sheriff reached and for the reasons which he has set out.”
[12] Thereafter the sheriff principal dealt with the two exceptions as follows.
(i) The question of service on the defender: section 19(6): The sheriff principal found it necessary to adjust the reasoning in paragraph [96] (iii) of the sheriff’s note, leading to the sheriff’s finding-in-fact-and law (4). Thereafter the sheriff principal concluded that the pursuers had proved, on a balance of probabilities, that the calling-up notice had been served on the defender in accordance with section 19(6) of the 1970 Act.
(ii) The question of service on the entitled resident: section 19A: For the reasons given in his judgment, the sheriff principal, having taken into account all the evidence, including the further evidence led before him during the appeal (namely the original certificate of execution of service of Form BB with copy calling-up notice on the entitled resident, and the oral evidence of Mr McEntegart) concluded that the pursuers had proved, on a balance of probabilities, that Form BB together with a copy of the calling up notice attached, had been served on Mr Stirling in accordance with section 19A.
Discussion
[13] Before considering the grounds of appeal, we emphasise the restricted role of an appeal court when considering facts found proved by a first instance judge. In this case, certain findings-in-fact have been made by the courts below. In particular:
“(20) On 21 February 2014, the pursuer’s solicitors (TLT Scotland Limited, Glasgow) posted to the defender a calling-up notice dated 21 February 2014 in a first class recorded delivery envelope addressed to the defender at the subjects …
(24A) No 24 of process is the certificate of execution of service of the Form BB on the entitled resident dated 21 February 2014”.
The guidance given by the Supreme Court in McGraddie v McGraddie 2014 SC (UKSC) 12, particularly paragraph [28] et seq, and in Henderson v Foxworth Investments Ltd 2014 SC (UKSC) 203 at paragraphs [62] to [68], is particularly relevant in this context.
[14] Against that background, we deal with the 32 grounds of appeal grouped under subject-headings as follows.
The question of service of the 2014 calling-up notice on the defender (grounds of appeal 4, 20, 21, 24 and 26)
[15] The defender’s position is that she never received the 2014 calling-up notice. It should be noted that this was a matter of assertion in submission, and was not a matter on which the defender gave evidence. She submitted however that the sheriff and the sheriff principal erred in finding it proved, on a balance of probabilities, that the 2014 notice had been served upon her.
[16] The requirements for service are set out in section 19(6) of the Conveyancing and Feudal Reform (Scotland) Act 1970, as follows:
“(6) … the 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 post or by the recorded delivery service to him at his last known address … and an acknowledgment, signed by the person on whom service has been made, in conformity with Form C of Schedule 6 to this Act, or, as the case may be, a certificate in conformity with Form D of that Schedule, accompanied by the postal receipt shall be sufficient evidence of the service of that notice; and if the address of the person on whom the notice is desired to be served is not known, or if it is not known whether that person is still alive, or if the packet containing a calling-up notice is returned to the creditor with an intimation that it could not be delivered, that notice shall be sent to the Extractor of the Court of Session, and shall be equivalent to the service of a calling-up notice on the person on whom it is desired to be served.”
[17] Form C of Schedule 6 is in the following terms:
“FORM C
I, A.B., above named, hereby acknowledge receipt of the foregoing Notice of (Calling-up), (Default) of which the foregoing is a copy of the notice adding where appropriate ‘and I agree to the period of notice being dispensed with (or shortened to ………)’.
Dated this …….. day of ………
(To be signed by the person on whom notice is served, or by his agent, who will add his designation and the words Agent of the said A.B.).”
[18] Form D of Schedule 6 is in the following terms:
“FORM D
Notice of (Calling-up) (Default), of which the foregoing is a copy, was posted (or otherwise, as the case may be) to A.B. above named on the …….. day of ………..
(To be signed by the creditor, or by his agent, who will add his designation and the words Agent of the said C.D. and if posted the postal receipt to be attached.)”
[19] In the case of the defender, the sheriff, having heard the evidence, made findings-in-fact (1) to (29) all as set out in paragraph [50] of his note. In particular:
“(20) On 21 February 2014, the pursuer’s solicitors (TLT Scotland Limited, Glasgow) posted to the defender a calling-up notice dated 21 February 2014 in a first class recorded delivery envelope addressed to the defender at the subjects.
(21) On 5 March 2014, a true copy of the calling-up notice was delivered to the Extractor of the Court of Session (‘the Extractor’) by the pursuer’s agents.
(22) Item 5/2 of process is a true copy of the calling-up notice and of the Extractor’s docquet thereon acknowledging receipt thereof on 5 March 2014.”
[20] The sheriff principal, while making an adjustment to the sheriff’s analysis of the evidence (at paragraph [96] (iii) of the sheriff’s note), did not criticise or change any of the sheriff’s findings-in-fact in relation to the service of the calling-up notice upon the defender. In our opinion the sheriff principal was correct in his approach, and cannot be criticised. Thus, on the basis of all the evidence led, and the judgments of the sheriff and the sheriff principal, it is our opinion that finding-in-fact (20), noted above, cannot be challenged.
[21] Nevertheless two arguments were presented by the defender. She submitted that:
(i) the calling-up notice may have been “posted”, but it was never “received” by her;
(ii) the fact that the pursuers used the Extractor option in terms of section 19(6) proved that the defender could not and had not received the calling-up notice.
[22] We take as our starting point the guidance given by the Supreme Court in Royal Bank of Scotland plc v Wilson 2011 SC (UKSC) 80, particularly by Lady Hale at paragraph [81] where she explained:
“ … a formal requisition, at least for repayment of the principal [is required]. The calling up procedure supplies this, although no doubt there are other ways. The policy is the same. A debtor should be given an opportunity of remedying his default before he is dispossessed …”.
It is in that context that section 19(6) of the 1970 Act sets forth the steps which creditors such as the pursuers must take in order to be held to have satisfied the requirement of service of the calling-up notice on the defender. Compliance with this procedure is expressly declared to be sufficient evidence of service. As is set out in the sheriff’s note at paragraph [98], and the sheriff principal’s judgment at paragraph [12] et seq, on the evidence led, the pursuers demonstrated that they had fulfilled the statutory requirements of service on the defender of the calling-up notice by proving posting by recorded delivery service to her at her address at 233 Talla Road, Glasgow: see the 1970 Act section 19(6); and Higgins, The Enforcement of Heritable Securities (3rd ed 2010) paragraphs 2.7.1, 2.9, 5.20, and 5.21 (the latter two paragraphs referring to different, but analogous, statutory provisions concerning the sufficiency of evidence of service). In the result we are not persuaded that either the sheriff or the sheriff principal erred on this matter.
[23] Standing the fulfilment of the statutory requirements (see above) it was unnecessary, in our opinion, for the pursuers to resort to the Extractor option. We therefore agree with the sheriff principal’s observations at paragraph [14] of his judgment. With the benefit of hindsight, such a course may have been inadvisable, even if intended to be a “failsafe” measure (presumably adopted because, we were advised, the Post Office had been able to confirm that the calling-up notice had been received into their custody for the purposes of posting, but apparently could not confirm actual receipt of the notice by the defender; cf paragraph [14] of the sheriff principal’s judgment).
[24] The use of the Extractor option gave rise to further arguments advanced by the defender including the following: (i) The defender was in e-mail correspondence with the pursuers’ agents TLT at the relevant time: the pursuers’ agents therefore well knew where she was. (ii) The Extractor could not have accepted the calling-up notice without a postal receipt: no postal receipt was contained in the Extractor’s file. (iii) A different page/document was received by the Extractor: a fraud had been perpetrated on the Court of Session. (iv) The use of the Extractor option categorically proved that service of the calling‑up notice had not been effected on the defender. As already noted, the Extractor option was superfluous and unnecessary, as the statutory requirements for recorded delivery postage had been fulfilled (see paragraph [22] above). Accordingly it is not necessary for this court to address those further arguments. Nevertheless, as an allegation of a fraud being perpetrated on the Court of Session is a serious matter, and as the defender’s arguments (iii) and (iv) may be thought to be inter‑linked to some extent, we record our position in relation to these arguments as follows. Argument (iii): senior counsel for the pursuers advised the court that what was delivered to the Extractor on 5 March 2014 was a computer-generated copy of the three pages which had been sent by recorded delivery to the defender. One of the three pages contained Form A (the terms of the calling‑up notice) followed by a docquet in the style of Form C (see paragraph [17] above but personalised to “Theresa Stirling”), whereby the debtor could, if so advised, sign to acknowledge receipt of the calling‑up notice, and to agree to a shorter (or no) period of notice; the other two pages, while containing Form A, did not contain a Form C docquet (one contained a Form D docquet). For the purpose of exercising the Extractor option, Mr McEntegart had added his signature where necessary to each of the three copy pages generated by the computer before they were delivered to the Extractor. On receipt of the computer‑generated three pages, the Extractor selected one page (containing Form A but no Form C docquet), and stamped and returned that page to TLT, thus acknowledging receipt. This explanation accounted for the differences between pages 56 and 316 of the supplementary appendix. With that explanation, senior counsel confirmed that what was delivered to the Extractor was not the principal calling‑up notice (which had been posted to the defender). There was accordingly no question of a fraud on the court; nor, in these circumstances, could it be said that the adoption of the Extractor option proved that the defender could not have received the calling‑up notice. Argument (iv): We refer to the foregoing explanation. We accept that what was sent to the Extractor was a 3‑sheet computer‑generated copy of the calling‑up notice. Accordingly, we do not accept the defender’s fourth argument.
[25] We are not persuaded that any stateable defence or argument arises from the use of the Extractor option. As indicated above, the statutory requirements of service of the calling-up notice upon the defender have been proved to have been fulfilled. There was no evidence, or at least no evidence which was found to be credible and reliable, that service had not been effected. In particular, the defender did not give evidence, and while Mr Stirling gave evidence, his evidence was rejected by the sheriff as “unreliable and lacking in credibility”: paragraph [62] of the sheriff’s note (page 51 of the appeal print). We have not been persuaded therefore that this court could or should interfere with the findings-in-fact relating to service of the calling‑up notice (cf McGraddie v McGraddie, Henderson v Foxworth Investments Ltd) or that either the sheriff or the sheriff principal erred in any way.
The question of service of Form BB (with a copy of the calling-up notice) on the entitled resident (grounds of appeal 1, 2, 3, 5, 6, 21, and 24)
[26] Mr Stirling stated that he had not received Form BB with a copy of the 2014 calling-up notice. That was the evidence which he had given to the sheriff, and the sheriff was wrong to reject it. The sheriff principal also erred by not accepting his evidence, by allowing further evidence from Mr McEntegart of TLT, and by permitting what purported to be a certificate of posting to be lodged late.
[27] Initially Mr Stirling further contended that the certificate of posting (a photocopy of which was available as a production) showed a peel-off label addressed to the occupier at 233 Talla Road superimposed upon the actual recipient’s name and address – in other words, the actual recipient had been someone other than himself. However in the course of the appeal, the original orange postal receipt became available, and examination did not bear out Mr Stirling’s contention. That having been clarified, Mr Stirling submitted that the orange document had not been formally date-stamped by the post office, and was therefore not a proper “postal receipt”.
[28] Our response to those submissions is as follows.
[29] The sheriff was entitled to form the view that the evidence given by Mr Stirling was neither credible nor reliable (see the sheriff’s note paragraphs [56] to [63]). This court cannot interfere with that assessment (McGraddie, Henderson v Foxworth Investments Ltd). While we agree with the sheriff principal that the sheriff should not thereafter have relied upon the presumption omnia rite acta esse praesumuntur, the additional evidence heard by the sheriff principal, and the additional finding-in-fact 24A (see paragraph [11] above), taken with all the other relevant evidence, provided a sufficiency of evidence and established to the court’s satisfaction, on a balance of probabilities, that the statutory requirements of service of the Form BB with a copy of the calling-up notice had been fulfilled. That finding-in-fact and the legal reasoning and conclusion reached after a consideration of the whole evidence cannot, in our view, be criticised.
[30] In relation to the question whether the sheriff principal was entitled to allow further evidence in the course of the appeal before him, the Sheriff Courts (Scotland) Act 1907, section 27 (which was applicable at the relevant time) provided inter alia:
“27. Appeal to sheriff
… It shall be competent for the sheriff principal, when the action is before him on appeal on any point … to allow further proof.”
[31] It was therefore competent for the sheriff principal to allow further proof, in the exercise of his discretion. Nothing said in the course of this appeal has persuaded us that the sheriff principal erred in the exercise of his discretion in deciding to allow further proof. Standing the reasoning set out in his judgment, it cannot be said that, in so doing, he acted unreasonably or perversely, or that he adopted an approach which no reasonable sheriff principal would have adopted (cf Cook v Crane 1922 SC 631; Britton v Central Regional Council 1986 SLT 207). Accordingly the additional evidence was properly before the court. The sheriff principal then had a sufficiency of evidence from which he was entitled to find it proved that the statutory requirements of service of Form BB with a copy of the calling-up notice upon the entitled resident had been fulfilled, in particular the requirements of section 19A of the 1970 Act.
[32] In the result we are not persuaded that there is any merit in the grounds of appeal relating to this matter.
Res judicata (grounds of appeal 14, 23 and 25)
[33] The defender submitted that the present case was barred by res judicata. The earlier case based on the 2011 calling-up notice had been decided in October 2013, when the appeal was allowed and the action dismissed. Thus the substantive dispute between the parties had already been determined by the Court of Session (Thomson v Coutts, Peterhead Sheriff Court, June 2001 unreported; Smith v Sabre Insurance 2013 SC 569). That this was so, in the defender’s submission, was confirmed by a letter dated 18 March 2015 from the Deputy Principal Clerk of Session (the defender’s appendix number 35 of process, page 103, tab 50) stating:
“I can advise that the merits of the action were disposed of as noted in the interlocutor dated 22 October 2013.”
[34] The defender developed her submission by pointing out that the two litigations involved:
- the same cause of action
- the same parties
- the same issues in controversy
- the same order sought (repossession)
- and the action being “prorogated” in two different courts at the same time
all as set out in her note of argument, page 33. Accordingly the present action should not be allowed to proceed.
[35] Mr McIlvride submitted that an action which had been dismissed could never found a plea of res judicata (Waydale v DHL 2000 SC 172 at pages 183-184). In any event, the first action concerned a default which had occurred when the 2011 calling-up notice expired without payment, whereas the current action concerned a default which occurred when the 2014 calling-up notice expired without payment. Each action was therefore based upon a different default.
[36] In our opinion, senior counsel for the pursuers is correct. In the result we have not been persuaded that either the sheriff or the sheriff principal erred in repelling the plea of res judicata.
Irresponsible lending (grounds of appeal 8 and 15)
[37] Although the defender sought to make submissions concerning irresponsible lending on the part of the pursuers, possibly resulting in certain consequences in terms of consumer and other legislation, there was in our opinion no basis in the written pleadings or in the evidence for such a challenge to be made. We are therefore unable to entertain such an argument.
No title to sue; assignation of the creditor’s interest in the debt to another party (grounds of appeal 10, 11, 16, 25 and 29 )
[38] The defender submitted that the pursuers had no right, title or interest to seek to enforce the standard security (cf the sheriff’s note paragraph [42]). The pursuers were a different entity from that which had the title and interest as creditor in the standard security.
[39] We have seen no material or information to suggest that the creditor’s title or interest in the relevant debt has been assigned to another party, or that the current pursuers have no title to sue. Certificates of change of name have been produced, but that is all.
[40] Ultimately we have identified no error on the part of either the sheriff or the sheriff principal in repelling any plea of no title to sue.
Failure to provide prescribed information in compliance with pre-action requirements (grounds of appeal 7 and 26)
[41] The defender submitted that the pursuers had failed to comply with legislation requiring the giving of full information to her prior to any action seeking to enforce the standard security (cf the sheriff’s note paragraph [40]).
[42] In response, senior counsel for the pursuers referred to Form 11C and associated documents contained in the Core Bundle. He submitted that all necessary steps had been taken and information provided, including information about fees, charges and costs.
[43] We have considered the documents referred to, and the views reached by the sheriff and sheriff principal. We are not persuaded that they erred in any respect in this context.
Failure to ensure a fair hearing (ground of appeal 9 and 28 )
[44] Nothing in the written or oral material before us has suggested any failure on the part of either the sheriff or the sheriff principal to conduct a fair hearing, or any breach of Articles 6 or 8 of the European Convention on Human Rights.
Failure to comply with the Law of Property (Miscellaneous Provisions) Act 1989 (grounds of appeal 12, 17 and 30)
[45] Scots law applies to heritable property situated in Scotland (including 233 Talla Road, Glasgow) and also to any standard security over that property, including the enforcement of that standard security. We do not accept that enforcement of that standard security is governed to any extent by English law, even following upon the reorganisation of the defender’s loan in 2005.
[46] Section 6(2) of the Law of Property (Miscellaneous Provisions) Act 1989 provides: “This Act extends to England and Wales only.” Thus the 1989 Act is not part of Scots law, and is irrelevant in the present case.
Issues relating to rectification (grounds of appeal 13, 31)
[47] The defender and the entitled resident contended that the sheriff and the sheriff principal erred in law by disregarding the material and prejudicial effect upon the defender and the entitled resident of permitting rectification of the standard security by changing 223 to 233. The statutory provisions for permitting rectification were not fulfilled. In particular, the pursuers, through their law agents, knew or ought to have known that the written document failed to reflect the common intention of the parties (cf the sheriff’s note paragraph [43]).
[48] Having considered the pleadings and the productions in this case, and having heard the submissions, we are satisfied that all relevant circumstances were taken into account when the issue of rectification was assessed in the courts below. It is our opinion that the sheriff and the sheriff principal were entitled to reach the conclusions they did. If, as Mr Stirling contended, he expended time and effort on improving the property, he may or may not have a claim (such as unjustified enrichment) against the defender, but that has no bearing on the issues before this court.
[49] In the result, we are not persuaded that this ground has any merit.
No jurisdiction; action “prorogated” in another court; action premature and incompetent (grounds of appeal 17, 22, 24 and 25)
[50] The defender submitted that the sheriff court had no jurisdiction in respect of the summary application as (a) English law applied (and therefore jurisdiction lay with the English courts: ground of appeal 17); and in any event (b) jurisdiction had been “prorogated” to the Court of Session (cf the sheriff’s note paragraph [34]). The defender also submitted that (c) the present action was premature and incompetent: the earlier application based on the 2011 calling-up notice remained in subsistence and could only validly be dismissed after the expenses awarded in her favour had been paid (cf the court rules on abandonment: the sheriff’s note paragraph [37]). The action was also incompetent, as a reorganisation of the defender’s loan in 2005 meant that the standard security did not secure the post‑2005 loan (cf the sheriff’s note paragraph [39]).
[51] In relation to (a) and the issue relating to English law, we refer to paragraph [45] above, and to the sheriff’s note paragraph [67], with which we agree.
[52] In relation to (b), the case being “prorogated” to the Court of Session, we note that the current action based on the 2014 calling-up notice was commenced by summary application in Glasgow Sheriff Court. The case has been appealed to the sheriff principal and to the Court of Session. The action is accordingly following the appropriate hierarchy of appeals involving different courts. The earlier action based on the 2011 calling-up notice (in which there were also appeals) has been dismissed, although we understand that questions of expenses are still to be finalised. But that does not, in our opinion, in some way render the present action premature or incompetent, nor is there any question that either the sheriff, or the sheriff principal, or the Court of Session, did not have jurisdiction.
[53] In relation to (c), the reorganisation of the defender’s loan in 2005, we agree with the sheriff (paragraphs [102] to [105] of his note) and the sheriff principal that the 2005 reorganisation did not render the standard security inapplicable, unenforceable, or irrelevant.
Not the original standard security; defects in the standard security (ground of appeal 27)
[54] Some of the criticisms made by the defender in the sheriff court were as follows: (i) The document appended to the charge certificate was not the original standard security; (ii) in any event, the document was defective in that it named the wrong heritable property; (iii) half a page was missing from the document; and (iv) the document failed to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 in that it had not been signed by both parties (sheriff’s note paragraph [38]).
[55] Our response is as follows: (i) In the course of the appeal, senior counsel for the pursuers produced and exhibited the original principal standard security to the court. That document appeared to have been duly signed by the defender. Without relevant pleadings and evidence led in the lower courts, this appeal court cannot entertain any contention that the signature on the principal standard security is not that of the defender. We are accordingly satisfied that the summary application proceeds upon the basis of the original standard security which bears the defender’s signature. We note the defender’s response to senior counsel’s production and exhibition of that document, namely that she had not signed it, and that she intended to raise an action of reduction. But in our opinion, unless and until the standard security is reduced, it must be treated as valid and enforceable. (ii) The sheriff has granted a decree rectifying the address in the standard security. As noted in paragraph [48] above, he was, in our opinion, entitled to do so. In terms of section 8(4) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, the standard security is to be treated as if it had always contained the correct address. (iii) The standard security is a pro forma document which leaves a space of about half a page for the insertion of the description of the property over which the security is to be granted. In the pursuer’s standard security, part of that blank space appears after a fairly brief conveyancing description. We note the defender’s observation that she would never have left such a blank space in a document before signing the document, she would have drawn a line through the blank space, but these are matters for pleading and proof in the courts below. The standard security, as it stands, is valid and enforceable. (iv) Scottish heritable property such as 233 Talla Road, Glasgow, is governed by Scots law, including the Conveyancing and Feudal Reform (Scotland) Act 1970. English legislation such as the Law of Property (Miscellaneous Provisions) Act 1989 does not apply to Scottish heritable property.
Failure properly to assess the credibility and reliability of witnesses (grounds of appeal 18, 19 and 32)
[56] The defender submitted that the court failed properly to assess the credibility and reliability of the witnesses Mr Rutherford and Mr McEntegart, particularly in the context of computer records and the steps taken by each witness. However assessment of credibility and reliability is primarily for the judge at first instance (McGraddie v McGraddie, Henderson v Foxworth Investments Ltd). Nothing in this appeal has persuaded us that there has been any failure in that respect.
Decision
[57] In the result, we refuse the appeal.