SHERIFFDOM OF SOUTH STRATHCLYDE DUMFRIES AND GALLOWAY AT DUMFRIES
CASE Reference Number A80/11
JUDGMENT
of
SHERIFF GEORGE JAMIESON
In relation to validity of service of Pursuer's Notice of Calling up of Standard Security
in causa
BANK OF SCOTLAND PLC, a company incorporated under the Companies Act 1985 and having its registered office at The Mound, Edinburgh, EH1 1 YZ
PURSUER
against
MR WILLIAM JOHN STEVENSON, trading as Cargen Construction and residing at Waterside Cottage, Dalbeattie Road, Cargenbridge, Dumfries DG 2 8LW
DEFENDER
DUMFRIES: June 2012
Act: Martin on 26th March 2012 and Steele on 3rd May 2012.
Alt: Party in Person on both occasions.
The sheriff, having resumed consideration of Defender's Motion 7/3 of process, Finds: (1) section 19(6) of the Conveyancing and Feudal Reform (Scotland) Act 1970 does not contain exhaustive provisions for service of a calling up notice; (2) that the calling up notice was competently served on the Defender by sheriff officer in accordance with rule 5.4 of the Ordinary Cause Rules 1993, Therefore Refuses Defender's motion 7/3 to dismiss the action as incompetent, Appoints parties to be heard on: (1) the question of expenses arising from the preparation for and attendances in connection with Defender's motion 7/3 of process; and (2) the fixing of a new date for Debate ,within the Sheriff Court House, Buccleuch Street, Dumfries on : at 10:00 am.
Sheriff George Jamieson
NOTE:
Prelude
[1]. Although this action was commenced after the coming into force of section 2 of the Home Owner and Debtor Protection (Scotland) Act 2010 asp 6 on 30th September 2010, it proceeds as an ordinary cause, rather than a summary application, because the pursuer avers it does not concern standard security subjects used to any extent for residential purposes.
[2]. The defender denies this averment but the question of the correct form of action does not arise for consideration by the court at this stage.
[3]. The case was assigned for debate on 26th March 2012 on the parties' preliminary pleas. Previous to the debate the Defender intimated Motion 7/3 to the Pursuer, to which the Pursuer lodged a notice of opposition, for dismissal of the cause as incompetent because:
" [T]he Pursuers (sic) failed to serve the calling-up notice properly in terms of the Conveyancing and Feudal Reform(Scotland) Act 1970, section19(6). The notice was not served on the Defender personally, it was put through the letter box. See Santander UK v Gallagher, SLT (Sh Ct) 16/12/2011."
[4]. This motion called before me on 26th May 2012 alongside the debate.
[5]. I heard extensive submissions regarding the motion on that date.
[6]. It was apparent more time would be needed for parties to address me on the motion.
[7]. Further, it was possible that if the action were incompetent because the calling up notice had not been properly served, then that might result in the Defender's motion being granted and the action being dismissed without the need for further debate. For these reasons, I accordingly ex proprio motu discharged the diet of debate and continued consideration of the motion for further submissions to 3rd May 2012. Having heard those further submissions on 3rd May 2012, I then made avizandum in respect of the motion.
I. LEGISLATION
The Profession of officer of court
[8]. Section 60 of the Bankruptcy and Diligence (Scotland) Act 2007 intended to abolish the ancient offices of messenger-at arms and sheriff officer (officers of court) and replace them with "judicial officers".
[9]. This "needless abolition"( RA Macpherson, Mergers in Messengery: A Confusion of Livet and Clyde, page 92) was repealed by the Public Services Reform (Scotland) Act 2010, which by amendment of section 63 of the Bankruptcy and Diligence (Scotland) Act 2007 provided for designation by the Scottish Ministers of a professional association to which all officers of court must belong, the relevant designation in respect of the Society of Messengers-at-Arms and Sheriff Officers being made by regulation 3 of the Officers of Court's Professional Association (Scotland) Regulations 2011 (SSI 2011/90).
[10]. The profession is regulated by rules made by the Court of Session under section 75 of the Debtors(Scotland) Act 1987, currently the Act of Sederunt(Messengers-at-Arms and Sheriff Officers Rules) 1991 ( "the 1991 Rules"), and its members are subject to elaborate disciplinary procedures set out in section s 80-82 of that Act. Every officer of court must carry an official identity card when carrying out his functions: 1987 Act, section 86(1). By virtue of section 77(2) of the Debtors (Scotland) Act 1987, a messenger-at-arms is not authorised by his commission to execute a warrant granted by the sheriff or sheriff clerk.
[11]. So far as relevant to this Judgment, section 75 of the Debtors(Scotland) Act 1987 provides:
Regulation of organisation, training, conduct and procedure
(1) The Court of Session may, by Act of Sederunt, in respect of officers of court-
(d) regulate the scope of their official functions;
(e) make provision prohibiting the undertaking by them of activities other than their official functions (referred to in this Part of this Act as "extra-official activities") which appear to the Court to be incompatible with their official functions;
(f) make provision permitting the undertaking by them for remuneration of other
extra-official activities, not appearing to the Court to be incompatible as aforesaid, and the Act of Sederunt may attach conditions to any such permission;
(2) No extra-official activity (not being an activity prohibited or regulated by an Act of Sederunt made under subsection (1)(e) or (f) above) may be undertaken by an officer of court for remuneration unless the officer of court obtains the permission of the sheriff principal from whom he holds a commission to his undertaking the activity, but the sheriff principal shall not withhold such permission unless it appears to him that the undertaking by the officer of court of the activity would be incompatible with the officer of court's official functions.
[12]. Rules 14 and 15 of the 1991 Rules currently prescribe the "official functions" and the "extra-official activities" of officers of court. So far as relevant to this Judgment, these rules provide:
14- Official functions
(1) Without prejudice to..... any functions under any other enactment, an officer of court may exercise the following official functions-
(a) subject to paragraph (2) below, collect any debt constituted by decree or recoverable by summary warrant;
(b) execute diligence; or
(c) execute a citation or serve any document required under any legal process, in any place in respect of which he holds a commission as an officer of court.
15- Extra-official activities
(1) Subject to paragraph (2) below, the extra-official activities of an officer of court may include-
(b) in the absence of any statutory provision to the contrary, service on a person for remuneration of any notice which is required to be served under any enactment.
(2) An officer of court who performs an extra-official activity under paragraph (1) above shall not state or imply that he is acting in his capacity as an officer of court.
[13]. Sheriff officers are :
"not an agent or servant of [a party's] own selection but the officer of law appointed for the purpose of serving writs which the party interested cannot effectually serve for himself (emphasis added)": McGregor v McLaughlin (1905) 8 F 70 at 77, per Lord Kinnear.
Repossession under the Conveyancing and Feudal Reform (Scotland) Act 1970("the 1970 Act")
[14]. The judgment of the Supreme Court in Royal Bank of Scotland plc v Wilson 2010 SLT 1227 authoritatively establishes that the creditor is obliged to serve a calling up notice on certain persons before applying to the sheriff for a warrant to enter into possession of the security subjects in terms of section 24(1) of the Conveyancing and Feudal Reform (Scotland) Act 1970("the 1970 Act").
[15]. Since in the present action the Pursuer seeks a section 24 warrant, it was accordingly necessary for it to serve a calling up notice on the defender before making that application to the court. So far as relevant to this Judgment, the provisions of the 1970 Act concerning service of a calling up notice are as follows
19- Calling-up of standard security
(1) Where a creditor in a standard security intends to require discharge of the debt thereby secured and, failing that discharge, to exercise any power conferred by the security to sell any subjects of the security or any other power which he may appropriately exercise on the default of the debtor within the meaning of standard condition 9(1)(a), he shall serve a notice calling-up the security in conformity with Form A of Schedule 6 to this Act (hereinafter in this Act referred to as a "calling-up notice"), in accordance with the following provisions of this section.
(2) Subject to the following provisions of this section, a calling-up notice shall be served on the person having the last recorded title to the security subjects and appearing on the record as the proprietor, and should the proprietor of those subjects, or any part thereof, be dead then on his representative or the person entitled to the subjects in terms of the last recorded title thereto, notwithstanding any alteration of the succession not appearing in the Register of Sasines.
(3) Where the person having the last recorded title to the security subjects was an incorporated company which has been removed from the Register of Companies, or a person deceased who has left no representatives, a calling-up notice shall be served on the Lord Advocate and, where the estates of the person having the last recorded title have been sequestrated under the Bankruptcy (Scotland) Act 1913, the notice shall be served on the trustee in the sequestration (unless such trustee has been discharged) as well as on the bankrupt.
(4) If the proprietor be a body of trustees, it shall be sufficient if the notice is served on a majority of the trustees having title to the security subjects.
(5) It shall be an obligation on the creditor to serve a copy of the calling-up notice on any other person against whom he wishes to preserve any right of recourse in respect of the debt.
(6) For the purposes of the foregoing provisions of this section, 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, or, in the case of the Lord Advocate, at the Crown Office, Edinburgh, 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.
(7) For the purposes of the last foregoing subsection, an acknowledgment of receipt by the said Extractor on a copy of a calling-up notice shall be sufficient evidence of the receipt by him of that notice.
(8) A calling-up notice served by post shall be held to have been served on the next day after the day of posting.
(9) Where a creditor in a standard security has indicated in a calling-up notice that any sum and any interest thereon due under the contract may be subject to adjustment in amount, he shall, if the person on whom notice has been served so requests, furnish the debtor with a statement of the amount as finally determined within a period of one month from the date of service of the calling-up notice, and a failure by the creditor to comply with the provisions of this subsection shall cause the calling-up notice to be of no-effect.
19A Notice to occupier of calling-up
(1) Where a creditor in a standard security over land or a real right in land used to any extent for residential purposes serves a calling-up notice, he shall serve a notice in conformity with Form BB (notice to occupier) of Schedule 6 to this Act together with a copy of the calling-up notice.
(2) Notices under subsection (1) above shall be sent by recorded delivery letter addressed to "The Occupier" at the security subjects.
(3) If a creditor fails to comply with subsections (1) and (2) above, the calling-up notice shall be of no effect.
19B Notice to local authority of calling-up
(1) Where a creditor in a standard security over an interest in land used to any extent for residential purposes serves a calling-up notice, the creditor shall give notice of that fact to the local authority in whose area the security subjects are situated, unless the creditor is that local authority.
(2) Notice under subsection (1) shall be given in the form and manner prescribed under section 11(3) of the Homelessness etc. (Scotland) Act 2003 (asp 10).
[16]. Section 11(3) of the Homelessness etc. (Scotland) Act 2003 provides that the Scottish Ministers may by regulations made by statutory instrument prescribe the forms of notice to be given under that subsection (1) of that section and "the manner in which such notices are to be given".
[17]. By virtue of regulation 3 of the Notice to Local Authorities (Scotland) Regulations 2008 (SSI 2008/324) the notice to be given under section 11(3) of the Homelessness etc. (Scotland) Act 2003 "must be sent by post or transmitted electronically".
II. STATUTORY PROVISIONS FOR SERVICE OF PROCESS
Legislation relating to citation previous to the Citation Amendment (Scotland) Act 1882
[18]. Firstly, the Citation Act 1540 (repealed in relation to procedure in the Court of Session) provides as follows:
"Item For eschewing of grett Inconvenientis and fraude done to our souerane lordis liegis be Summoning of thame at thare duelling places And oft tymes falslie and gettis neuer knawlege thairof It is statute and ordanit that In tymes cuming quhare ony officiar or schireff in that part passis at the command of The kingis lettrez or the schireffis stewartis barone or balyeis precept to Summond ony party geif thai can nocht apprehend thame personalie thai sall pass to the yett or durr of the principale duelling place quhare the persoune to be Summond duellis and has thair actuale residence for the tyme and thare sall desire to haif Enteres quhilk gif It be grantit thai sall first schaw the cause of thare cuming And gif thai can nocht gett the party personalie thai sall schaw thair lettres or precept befor the seruandis of the house or vther famouse witnesse and sall execute thair offices and charge and thaireftir sall offir the copy of the saidis lettrez or precept to ony of the servandis quhilk gif thai refuse to do that thai affix the samin vpoune the yett or dure of the personis Summondit And siclik gif thai gett na Enteres thai first knokand at the dure vj knokis thai sall execute thair office befor famouse witnesse at the said house and duelling place and affixt the copy vpoune the yett or dure thairof as said Is quhilk sall be lauchtfull and sufficient Summoning and deliuering of copy And the party nor officiar sall nocht be haldin to gif ony vthir copy bot at thair awin plesour And euery officiar In his indorsatioune sall mak mentioune of his executioune In maner forsaid And the party at quhais instance the lettre or precept Is direct sall pay to the officiar executour the expense of the copy affixt As said Is And salbe taxt and gevin agane to him at the geving of the decrete or sentence gif he happinnis to optene And gif the officiar beis fundin culpable in the executioune of his office he salbe put In our souerane lordis prisoune and punist In his persoune and gudis at the kingis grace will."
[19]. The Citation Act 1592 provides that:
"[A]ll copys of summoundis and lettres quhilkis salbe deliuerit to ony pairtie be subscryuit be the officiar executour thairof ."
[20]. The Citation Act 1686 provides that:
"[A]ll Citations ...be subscrived by the executor therof and the witnesses therto Otherways to be null and void..."
[21]. The Citation Act 1693 provides that:
"[A]ll Copies of Summonds Charges Inhibitions Arrestments or other Letters whatsoever given to the Party shall bear at length and not in figures the day and date of the delivery thereof As also the names and designations of the Witnesses in such sort as the Execution and Indorsation did and doth bear the same Certifyeing the Messenger who shall omitt to insert the said day and date and witnesses in his Copy that he shall incurre deprivation and tinsell of his Office."
[22]. These old Acts demonstrate a long policy. The stated policy objective in the Citation Act 1540 of entrusting service of process (citation) and execution of diligence to messenger-at arms and sheriff officers as officers of court is that this is:
" For eschewing of grett Inconvenientis and fraude done to our souerane lordis liegis be Summoning of thame at thare duelling places And oft tymes falslie and gettis neuer knawlege thairof."
[23]. In recognition of the importance attached to citation and executions by officers of court, citations not subscribed by the officer and executions of citation not signed by the officer and witness are "null and void" in terms of the Citation Acts 1592 and 1686. Accordingly, decrees in absence following thereon may be reduced or suspended by the Court of Session: see Beattie v Lee (1823) 2S 220; Blackfriars (Scotland) Ltd v Shetland Salmon Co's Trustee 2001 SLT 315.
Only one witness required for service
[24]. Section 32 of the Debtors (Scotland) Act 1832 (as amended) provides in relation to citation in the sheriff court( it has been repealed in relation to the Court of Session) that:
"Extracts, citations, deliverances, schedules, and executions may be either printed or in writing, or partly both, and more than one witness shall not be required for service or execution thereof (emphasis added)".
[25]. Section 1 of the Citations (Scotland) Act 1846 provides that section 32 :
"[S]hall apply to all citations on all summonses, and to all cases whatsoever of services and execution, and more than one witness is not and shall not be required for service or execution in any case(emphasis added)".
[26]. This rule that one witness is sufficient for the execution of citation is set out expressly in rule 5.2(4) of the Ordinary Cause Rules 1993.
The Citation Amendment (Scotland) Act 1882
[27]. Previous to the Citation Amendment (Scotland) Act 1882, section 3, citation "through delivery by an officer of court" was "the only way competent" in respect of initiating writs in the sheriff court: Dove Wilson, Sheriff Court Practice(4th edition 1891), page 110.
[28]. The Citation Amendment (Scotland) Act 1882, section 3 authorised postal citation of parties or "judicial intimation" by a solicitor or officer of court "in any civil action or proceeding in any court" as a "substitute, in every civil case, for service by an officer of Court" Dove Wilson, Sheriff Court Practice (4th edition 1891), at page 119.
[29]. By virtue of the Recorded Delivery Service Act 1962, section 1(1), the reference to service by registered letter in the Citation Amendment (Scotland) Act 1882 now refers to service by either registered letter or by the recorded delivery service.
Provisions of the Ordinary Cause Rules 1993 relevant to service of process
[30]. "Service within Scotland by sheriff officer" is regulated by rules 5.2(4)-(6) and 5.4 of the Ordinary Cause Rules 1993.So far as relevant to this Judgment, and taking them in reverse order, these rules as currently enacted provide:
5.4: (1) An initial writ, decree, charge, warrant or any other order or writ following upon such initial writ or decree served by a sheriff officer on any person shall be served-
(a) personally;
(3) Where a sheriff officer has been unsuccessful in executing service in accordance with paragraph (1), he may, after making diligent enquiries, serve the document in question-
(a) by depositing it in that person's dwelling place or place of business;
(4) ....where service is executed under paragraph (3), the sheriff officer shall, as soon as possible after such service, send a letter containing a copy of the document by ordinary first class post to the address at which he thinks it most likely that the person on whom service has been executed may be found.
(6) Where service is executed under paragraphs ... (3), the document and the citation or notice of intimation, as the case may be, must be placed in an envelope bearing the notice "This envelope contains a citation to or intimation from (insert name of sheriff court)"and sealed by the sheriff officer.
5.2: (4) Where citation is by a sheriff officer, one witness shall be sufficient for the execution of citation.
(5) Where citation is by a sheriff officer, the certificate of citation shall be signed by the sheriff officer and the witness and shall state-
(a) the method of citation; and
(b) where the method of citation was other than personal or postal citation, the full name and designation of any person to whom the citation was delivered.
(6) Where citation is executed under paragraph 3 of rule 5.4 (depositing ....by sheriff officer), the certificate shall include a statement-
(a) of the method of service previously attempted;
(b) of the circumstances which prevented such service being executed; and
(c) that a copy was sent in accordance with the provisions of paragraph (4) of that rule.
Provisions of the Summary Applications, Statutory Applications and Appeals, etc Rules 1999 relevant to service of process
[31]. The 1999 Rules make identical provisions for citation by sheriff officer as do the Ordinary Cause Rules 1993: see rules 2.7(9)-(11) and 2.11.
Act of Sederunt (Sheriff Court Rules) (Miscellaneous Amendments) 2011 (SSI 2011/193)
[32]. This Act of Sederunt amended the Ordinary Cause Rules 1993 and the Summary Application Rules 1999 in respect of service of process with effect from 4th April 2011, by substituting for the old alternative of affixing (rather than depositing) service:
"by leaving it at that person's dwelling place or place of business in such a way that it is likely to come to the attention of that person";
see now OCR 1993, rule 5.4(3)(b) and SAR 1999, rule 2.11(3)(b).
[33]. Also with effect from 4th April 2011, rule 5.4(6) and 2.11(6) were added respectively to the OCR 1993 and SAR 1999:
"(6) Where service is executed under paragraphs (1)(b) or (3), the document and the citation or notice of intimation, as the case may be, must be placed in an envelope bearing the notice "This envelope contains a citation to or intimation from (insert name of sheriff court)" and sealed by the sheriff officer".
III. STATUTORY PROVISIONS FOR SERVICE OF NOTICES REQUIRED BY STATUTE
Introduction
[34]. There are many statutes which require service of notices as a necessary preliminary to litigation.
Some statues use permissive language
[35]. Some of these appear to be in permissive terms only. A typical example is section 54 of the Housing(Scotland) Act 1988, relative to assured and short assured tenancies, which provides that a notice served or given under Part II of the Act "may be served or given" to the person concerned (emphasis added)-
(a) by delivering it to him;
(b) by leaving it at his last known address; or
(c) by sending it by recorded delivery letter to him at that address.
[36]. Section 40(1) of the Housing (Scotland) Act 2001 similarly provides that a notice or other document authorised or required to be given to a person by Chapter 1 of Part 2 of the Act relative to a Scottish secure tenancy or Scottish short secure tenancy "may be given" to the person concerned(emphasis added)-
(a) by delivering it to that person,
(b) by leaving it at that person's proper address, or
(c) by sending it by recorded delivery letter to that person at that address.
Some statues use imperative language
[37]. An example of imperative language is found in section 176 of the Consumer Credit Act 1974, sub-section (1) of which provides that:
"A document to be served under this Act by one person ("the server") on another person ("the subject") is to be treated as properly served on the subject if dealt with as mentioned in the following subsections"(emphasis added).
[38]. This is relevant to repossession cases where the debt secured is regulated by the Consumer Credit Act 1974 as "land mortgages" securing regulated agreements are enforceable "on an order of the court only"(section 129), and that after prior service of a default notice under section 87(1)(e) of the Act.
The Interpretation Act 1978
[39]. Section 7 of the Interpretation Act 1978 makes provision for postal service of statutory notices in relation to Acts of the United Kingdom Parliament:
"Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expression "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post"(emphasis added).
IV. SANTANDER UK PLC v GALLAGHER
[40]. In Santander UK plc v Gallagher 2011 SLT (Sh Ct) 203, Sheriff Mackie held that section 19(6) of the 1970 Act did not imply that service of a calling up notice could be effected by any of the modes of service specifically provided for in the rules of court.
[41]. In paragraph [15] of her Judgment, she stated:
"It appears to me that what Parliament intended was that the calling up notice was not simply left within a property. If personal service is not effected the creditor is not frustrated in the process. The subsection provides for service upon the Extractor of the Court of Session where the debtor's address is not known or if the recorded delivery package is returned with intimation that it could not be served. Service on the extractor is equivalent to service on the person".
V. SERVICE OF THE CALLING UP NOTICE IN THIS CASE
[42]. The "Certificate of Execution of Calling up Notice" appears at item 5/3 of process.
[43]. It is dated 14th February 2011(typed in length and not in figures per the Citation Act 1693).
[44]. It is signed by both the executing officer and a single witness in compliance with the Citation Act 1686, the Debtors (Scotland) Act 1832, section 32, the Citations (Scotland) 1849, section 1, and rules 5.2(4) and (5) of the Ordinary Cause Rules 1993.
[45]. It certifies the calling up notice was served on the Defender by depositing a full copy through the letter box on the door of his dwelling place ( as required by the decision in Docherty v Docherty 1981 SLT (Notes) 24 ) as "after diligent enquiry" the sheriff officer was not able to find the Defender "personally or any person within his dwelling place to accept service, but established that he resided at the above address, and having given six audible knocks upon the said door as use is I could not gain access thereto", in compliance with rule 5.2(5)(a) of the OCR 1993.
[46]. This method of service was in compliance with the Citation Act 1540(particularly the references to attempting personal service and to the "six audible knocks" when this was not possible) and rule 5.4(3) (a) of the OCR 1993.
[47]. The certificate further complies with rules 5.2 (6) (a) and (b) of the OCR 1993 in that it specifies the method of service previously attempted and the circumstances which prevented that service being executed.
[48]. Finally it certifies that a copy of the calling up notice was sent to the Defender by ordinary first class post (in compliance with rules 5.2(6) (c) and 5.4(4) of the OCR 1993).
VI. SUBMISSIONS IN THIS CASE
The Defender's submissions
[49]. The Defender urged me to follow the decision in Santander UK plc v Gallagher.
[50]. He argued that section 19(6) of the 1970 Act prescribed the only methods for service of a calling up notice and as service of that notice was the foundation for the present proceedings (as decided by the Supreme Court in Royal Bank of Scotland plc v Wilson), it followed the present proceedings had been incompetently raised because the calling up notice had not been served by a method prescribed by section 19(6).
Pursuer's reply
Submissions made by Ms Martin on 26th March 2012
[51]. Ms Martin made a number of points in reply to the defender's submissions at the initial hearing of the Defender's motion 7/3 of process on 26th March 2012.
Santander UK plc v Gallagher did not apply on the facts
[52]. Ms Martin argued the facts in the present case were distinguishable from those in Santander UK plc v Gallagher, because:
(1) there had been no appearance in that case whereas the Defender had entered appearance in the present case; and
(2) the Defender had admitted receipt of the calling up notice in the present case in his pleadings.
[53]. In relation to her second point, she referred in particular to Household Mortgage Corporation plc v Diggory, Unreported Property Cases from the Sheriff Court, page 455, and argued it was sufficient the calling up notice had been delivered to the defender "by some means".
Service by depositing equated to personal service
[54]. She argued depositing by sheriff officers was in the circumstances of the case equivalent to personal delivery, given the defender's admission he had in fact received the calling up notice.
Santander UK plc v Gallagher was wrongly decided
[55]. Finally, Ms Martin argued Santander UK plc v Gallagher was wrongly decided and ought not to be followed by me.
[56]. Inter alia she submitted the sheriff had misunderstood the significance of the 1991 Rules and that a sheriff officer was carrying out his official functions in serving a calling up notice.
Submissions made by Ms Steele on 3rd May 2012
[57]. Ms Steele addressed a concern about service of a calling up notice by depositing in a dwellinghouse by a sheriff officer.
[58]. Since section 19(6) of the 1970 Act did not refer to this method of service, how could it be established when service was effected for the purpose of the running of the two month period in respect of the calling up notice?
[59]. She referred me to the pursuer's productions 5/3-5/5 of process to show that by letter dated 24th March 2011 to the pursuer the defender was aware the calling up notice had been served on him. Moreover, she referred to his Answer 3, admitting the Pursuer sent him a calling up notice dated 14th February 2011.
[60]. She informed me the Pursuer's writ in this action was not warranted until 8th June 2011, and accordingly it was plain the Defender had had benefit of the full two month period before proceedings were raised against him.
The Defender's Reply on 3rd May 2012
[61]. The Defender again submitted the calling up notice was the foundation of the Pursuer's action and as it had not been served in accordance with section 19(6), the Pursuer's action should be dismissed. He again urged me to follow the decision in Santander Bank UK plc v Gallagher.
VII. DISCUSSION
Introduction
[62]. I would have benefited from a fuller citation of authority by the Pursuer for two of their submissions, for the authorities are probably against them on these points.
Did the Defender's appearance in the action cure any defect in service of the calling up notice?
[63]. Firstly, it has already been judicially determined that where methods of service of pre-litigation notices are "exhaustive", then failure to follow those methods renders service of the notice ineffective; the defect cannot be cured by the Defender entering appearance in the subsequent court action: Department of Agriculture for Scotland v Goodfellow 1931 SC 556.
Does service by depositing equate to personal service?
[64]. Secondly, it is not possible to equate service by depositing with personal service. I agree with Sheriff Mackie in Santander UK plc v Gallagher that Household Mortgage Corp v Diggory deals with a different point and that it is not enough to argue the Defender got the calling up notice in his hands "by some means". Moreover, it has already been judicially established that the two forms of service cannot be equated: Rae v Calor Gas Ltd 1995 SC 214; applied in Landau v Go Debt Ltd, Sheriff Way, Dundee Sheriff Court, 9th August 2010.
Santander UK plc v Gallagher
[65]. The decision in Santander UK plc v Gallagher proceeded upon two bases:
(1) the Pursuer conceded a sheriff officer was not acting in his official capacity in terms of rule 14 of the 1991 Rules in serving a calling up notice [para 12]; and
(2) the sheriff took the view the certificate of execution of the calling up notice in that case confirmed this was so [para 13].
[66]. However, neither of the points is valid in this case. Firstly, no such concession was made by Ms Martin; indeed, on 26th March 2012, she submitted Santander UK plc v Gallagher was not correctly decided because inter alia a sheriff officer was acting in his official capacity in serving a calling up notice. Secondly, as I have noted above at paragraphs [42]-[48] of this Judgment, the sheriff's officer's certificate of execution of the calling up notice in this case complied in all respects with the legislation and rules of court bearing on citation of process. This therefore indicates that the sheriff officer in this case did in fact consider he was exercising his official functions as an officer of court in serving the calling up notice. For these reasons, I am therefore of the view Santander UK plc v Gallagher is not binding on me.
VIII. OPINION
Approach
[67]. In my opinion, the correct approach to understanding section 19(6) of the 1970 Act is firstly to consider general principles of statutory interpretation concerning the use of "may" and "shall" in statutes; then to ask whether, as a matter of statutory interpretation, section 19(6) of the 1970 Act sets out exhaustive provisions for service of a calling up notice, or whether its provisions are permissive only (cf Department of Agriculture for Scotland v Goodfellow 1931 SC 556); thereafter to consider if a sheriff officer may competently serve the calling up notice in his capacity as officer of court in accordance with the rules of the sheriff court as an alternative to the methods of service of a calling up notice provided by section 19(6) of the 1970 Act; and finally, to consider the implications for the running of time if a calling up notice may be competently served by a sheriff officer in his official capacity as an officer of court in accordance with the rules of the sheriff court.
General principles of statutory interpretation
[68]. This therefore brings me first of all to a consideration of general principles of statutory interpretation in relation to the use of "may" and "shall" in statutes. As already noted, it is commonplace for statutes to make provision for service of notices. The difficulty for the court is in each case to establish whether those provisions are permissive only; or whether they in fact prescribe the only competent methods for service: Department of Agriculture for Scotland v Goodfellow 1931 SC 556.
[69]. It is notorious that sometimes the use of the word "may" in an enactment really means "shall": see for example, Department of Agriculture for Scotland v Goodfellow 1931 SC 556, in which it was held that the alternative methods of service in relation to service of statutory notices under sections 34-38A of the Sheriff Courts (Scotland) Act 1907 (notices of removal in respect of tenancies) and associated rules of court (now OCR 1993, rules 34.5- 34.9), provided by the 1907 Act and Ordinary Cause Rules were "exhaustive", despite the use of the word "may" in relation to those methods of service.
[70]. Conversely "shall" is not always to be taken literally (see, for example, Williams v Williams 1931 SC 196 in relation to the methods of service of a consistorial action), though "shall" has been held to have that literal effect in relation to the necessity of service of a calling up notice prior to an application to the sheriff for warrant to enter into possession under section 24 of the 1970 Act: see Royal Bank of Scotland v Wilson per Lord Rodger at para [46], Lord Hope at para [73], and Lord Clarke at paras [84] and [85].
Interpretation of section 19(6) of the 1970 Act
[71]. In approaching this task, I note section 19(6) of the 1970 Act stands out from the other subsections in section 19 of the 1970 Act. In stark contrast to these other provisions, section 19(6) of the 1970 Act uses the word "may", not "shall", in relation to methods of service of a calling up notice.
[72]. The word "shall" is used in subsection (1) about the necessity of serving a calling up notice, it is used in subsections (2) - (4) which prescribe on whom the notice may be served, and it is used in subsection (5) requiring service of a copy of the notice on the person against whom the creditor "wishes to preserve a right of recourse in respect of the debt".
[73]. Subsection (9) uses "shall" in relation to furnishing the debtor with a statement of amount where the debt is liable to adjustment; failure to comply with this provision "shall cause the calling up notice to be of no effect".
[74]. Section 19A (where applicable) uses "shall" in relation to service of a copy calling up notice on the occupier; subsection 19A (3) provides that if this is not done, "the calling up notice shall be of no effect".
[75]. Section 19B (where applicable) uses "shall" in relation to notification to the local authority, but provides no specific sanction for non-service of the notice.
[76]. So far as related legislation in repossession cases is concerned, section 176 of the Consumer Credit Act 1974(where applicable) sets out an imperative scheme for service of pre-litigation default notices where it is sought to enforce a "land mortgage" regulated under that Act.
[77]. And by virtue of regulation 3 of the Notice to Local Authorities (Scotland) Regulations 2008 (SSI 2008/324) the notice to be given under section 11(3) of the Homelessness etc. (Scotland) Act 2003 "must be sent by post or transmitted electronically"(emphasis added).
[78]. Unlike the service of statutory notices under sections 34-38A of the Sheriff Courts (Scotland) Act 1907 (notices of removal in respect of tenancies) and associated rules of court (now OCR 1993, rules 34.5- 34.9), considered by the Court in Department of Agriculture for Scotland v Goodfellow 1931 SC 556, section 19 of the 1970 Act provides only a partial scheme for service of a calling up notice.
[79]. Section 19(6) refers to two methods of service only:
(1) "delivery to the person on whom [the calling up notice] is desired to be served"; or
(2) by registered or recorded delivery postal service to that person, failing which service on the extractor of the Court of Session.
[80]. In relation to the first of these two methods of service of a calling up notice, section 19 does not specify who may serve the calling up or how or by whom this method of service is to be authenticated.
[81]. By contrast, detailed provision is made for service by registered or recorded delivery post by the creditor or his agent (Form D, schedule 6) and authentication of registered or recorded delivery postal service in Form D "accompanied by the postal receipt" (section 19(6)), and for sufficient evidence of service on the extractor by an acknowledgement of service by him, in the event registered or recorded delivery postal service is not successful (section 19(7)).
[82]. Further, in relation to registered or recorded delivery postal service under section 19(6), it is provided that the calling up notice "shall be held to have been served on the next day after the day of posting (section 19(8)), thus displacing section 7 of the Interpretation Act 1978 by virtue of "contrary intention".
[83]. Thus while section 19 of the 1970 Act seeks to regulate registered or recorded delivery postal service in some detail, it is clear from Form D in schedule 6 that this method of service is to be carried out by the creditor or its agent. This is a sensible provision for it avoids the unnecessary expense of instructing a sheriff officer, if that can be avoided.
[84]. If that method of service proves unsuccessful, the creditor may then serve on the extractor. But if that were the only other method of serving the calling up notice, and it were not possible to instruct a sheriff officer to attempt personal service, which failing service on a resident, or by depositing in the debtor's dwellinghouse, the likelihood is the debtor would not actually know the calling up notice had been served, whereas it is more likely he would know it had been served if it were deposited by a sheriff officer in his dwellinghouse. That method of service is as good as registered or recorded delivery postal service, and is sufficiently authenticated by the sheriff officer's certificate of execution.
[85]. The whole purpose of the calling up procedure is to give the debtor a two month opportunity to clear the debt before court proceedings are raised (see Royal Bank of Scotland v Wilson, per Lady Hale at paragraph [80]), and that would less likely be achieved by interpreting section 19(6) as requiring service on the extractor if personal delivery or registered or recorded postal service did not succeed.
[86]. For these reasons, I construe section 19(6) of the 1970 Act in the sense of permitting certain methods of service of a calling up notice by the creditor or its agent; the word "may" as used in that sub-section is in my opinion literally to be taken to mean what it says; in other words, it sets out optional methods of service of a calling up notice, to be adopted by the creditor or its agent and does not contain exhaustive provisions regarding service of a calling up notice.
May a sheriff officer serve a calling up notice in his official capacity as an officer of court?
[87]. Prior to section 75 of the Debtors (Scotland) Act 1987, the sheriff officer's "official functions" were limited to: (1) citation (service of process) and; (2) the execution of diligence.
[88]. The effect of section 75 of the 1987 Act was to allow the Court of Session, by act of sederunt, to extend those "official functions" to other areas of work, and in addition to allow a sheriff officer to engage in regulated "extra-official activities".
[89]. Rule 14 of the Act of Sederunt (Messengers-at-Arms and Sheriff Officers Rules) 1991, made under section 75 of the 1987 Act, has extended the sheriff officer's official functions to permit him to "execute a citation or serve any document required under any legal process" (1991 Rules, rule 14(1) (c)) (emphasis added).
[90]. One implication of this is that the officer must when carrying out an official function, carry his official identity card and produce it when required: 1987 Act, section 86. It is noticeable that by contrast, when engaging in "extra-official activities, a sheriff officer must not imply he is acting in his capacity as an officer of court: 1991 Rules, rule 15(2).
[91]. The issue is therefore resolved by asking whether a sheriff officer would be carrying out an "official function" when serving a calling up notice and in my opinion this issue is resolved in turn by asking whether a particular statutory pre-litigation notice fits the description of a "document required under any legal process".
[92]. And since a calling up notice must be served prior to a section 24 application to the court, it seems to me it must fit that description (Royal Bank of Scotland v Wilson); accordingly, I am of the opinion that in serving a calling up notice, a sheriff officer acts in his "official capacity".
[93]. It follows from this opinion that in serving a calling up notice in his capacity as an officer of court, a sheriff officer ought to follow the rules relating to citation (service of process), set out in the legislation dating back to 1540 and which the rules of court are but a restatement and refinement.
[94]. That the rules of court (for example the opening statement in rule 5.4(1), OCR 1993) and rule 5.4(6), OCR 1993 (deposited writs to be in an envelope referring to court proceedings) are framed with regard to citations and executions of diligence, is in my opinion of no moment.
[95]. The 1991 Rules merely extend a sheriff officer's official functions in relation to citations and executions of diligence, to service of a " document required under any legal process" and accordingly the rules of court applicable to the process in question (ordinary cause or summary application) apply mutatis mutandis to service of those documents as they do to citations and intimations in connection with the process itself.
The running of time
[96]. Form A in schedule 6 to the 1970 Act is the prescribed form of a calling up notice.
[97]. The Form warns the debtor that the creditor may exercise certain remedies "failing full payment of the said sum and interest thereon, and expenses within two months after the date of service of this demand (emphasis added)".
[98]. The Form makes it clear that the two month period is computed with reference to the date of service of the calling up notice; it is accordingly important to ascertain what that date is in any given case.
[99]. Even though, on the facts of this case, there was at least a two month gap between service of the calling up notice and the raising of the proceedings, I am of the opinion that such a matter ought not to be left to be determined on a case by case basis; it is important in the interests of legal certainty that there be a reliable method of ascertaining when time begins to run under the notice.
[100]. It is evident that depositing a calling up notice in the debtor's dwellinghouse, or even posting a calling up notice to the debtor, does not necessarily equate to his receipt of the notice; hence the displaced presumption in section 7 of the Interpretation Act 1978 that a document served by post is deemed , unless the contrary is proved, to have been effected at the time "at which the letter would be delivered in the ordinary course of post" in favour of the provision in section 19(8) of the 1970 Act that the calling up notice "shall be held to have been served on the next day after the date of posting".
[101]. While I did initially have concerns that service by a sheriff officer by depositing in the debtor's dwellinghouse created a legal gap, in that there was no specific provision in the Act for determining when alternative methods of service would be effected and therefore determining the date from which time would run under the calling up notice, I now consider this not to be a difficulty at all.
[102]. This is because once it is accepted that a sheriff officer may competently serve a calling up notice in accordance with the rules of the sheriff court, the normal rule of law that service is effected on the date of its execution (not receipt, if different) applies to that service (Gibson v Clark (1895) 23 R 294), and that therefore leaves no room for doubt as to the "date of service".
IX.RESULT
[103]. It was not necessary for the pursuers to serve the calling up notice in accordance with section 19(6) of the 1970 Act; the sheriff officer was entitled to serve it acting in his official capacity as officer of court in accordance with the rules for citation set out in the relevant legislation and rules of court; those rules were followed by the sheriff officer; the date of service was the date of its execution; accordingly, the calling up notice was competently served on the Defender.
X. DISPOSAL OF DEFENDER'S MOTION 7/3 OF PROCESS
[104]. It follows these proceedings are not incompetent for reason the calling up notice was not served on the Defender in accordance with section 19(6) of the 1970 Act. I therefore refuse the Defender's motion 7/3 of process to dismiss the action for that reason and appoint the parties to be heard on the question of expenses arising in connection with it.