Note:  This judgment is not connected to the Sheriff Appeal Court judgment of 7 July 2016.




[2016] SC LAN 58





In the cause








WILLIAM LINDSAY, executor nominate in the estates of EUAN McINTYRE LINDSAY




Pursuers:   Mr Kinnear, Advocate, instructed by TLT LLP, Solicitors

Defender:   Mr Stalker, Advocate, instructed by Wright, Johnston& Mackenzie LLP, Solicitors


LANARK, 5 August 2016

The Sheriff, having resumed consideration of the cause:


REPELS the defenders’ pleas-in-law 1 and 3; SUSTAINS the defender’s plea-in-law 5; FINDS it unnecessary to determine the defender’s remaining pleas-in-law; REPELS the pursuers’ pleas-in-law; DISMISSES the action; RESERVES meantime the question of expenses.




[1]        Put very briefly, this is an action in which the pursuers seek rectification of a standard security over the subjects known as Harperfield Farm, Sandilands, Lanark (“the subjects”), rectification of a calling up notice of that standard security, declarator that they are entitled to enter into possession of the subjects and warrant permitting the exercise of certain associated remedies. The defender resists the action on various grounds and seeks dismissal. The background is explained more fully below.

[2]        This matter called before me for debate on the defender’s motion on 29 January 2016. Unfortunately, it was not possible to complete the debate on that date and the debate required to be continued on two further occasions, 22 April 2016 and 20 May 2016 when I made avizandum. I regret that owing to pressure of other court business, it was not possible to pronounce this interlocutor and Note any earlier.


The background

[3]        The following matters were not in dispute and are agreed between the parties. The subjects comprise land and buildings known as Harperfield Farm. One of those buildings is used for residential purposes. On 29 September 2009, the late Euan McIntyre Lindsay (“the debtor”) entered into a loan agreement with the pursuers. The loan was £1,335,000 which was repayable in full on 30 September 2011. Interest on the loan was due each month of about £7,787. The debtor bound himself also to various other obligations which are not relevant for present purposes. In the event of default in the payment of the monthly interest, the agreement provided at clause 6 that the pursuer would call for immediate payment of the capital balance, plus interest due, plus additional interest on the sum outstanding at the rate of 0.1% per day until all sums were paid. In addition, costs incurred in the event of default would be added to the loan. Furthermore, clause 9 provided for other payments to be made by the debtor in the event of failure to pay sums due under the agreement including reimbursements of all losses and expenses incurred by the pursuer in consequence of default. The principal sum was loaned and interest was paid in terms of the agreement, at least initially.

[4]        Unfortunately, the debtor died on 3 June 2011. The defender is the executor nominate of the debtor. That death entitled the pursuers to call up the loan. They did not do. Instead, the pursuers told the defender that the loan could continue on the same terms so long as the contractual monthly interest was paid. The loan continued on that basis. The interest was paid up to and including October 2012 so that as at that month, the sum outstanding due to the pursuers remained the original loan amount of £1,335,000. Thereafter no payments have been made by the defender by way of interest or otherwise. The pursuers claim that outstanding balance due by the defender to the pursuers as at 15 September 2014, the date of the calling up notice, had risen to £2,610,169 and as at 23 December 2014, following the expiry of the calling up notice, was £2,884,539: an increase of about £274,000 in about 14 weeks. The sum outstanding as at the date of the debate was said to be in excess of £3M.

[5]        The loan agreement provided that the loan was to be secured over the subjects. To that end, an all-sums standard security was entered into which was executed by the debtor on 3 October 2009 and registered on 8 February 2010. The description of the subjects in that standard security contained both a description of the subjects by reference to the name of the subjects and by reference to a Sasines title recorded in the Register of Sasines on 24 November 1989 (all of which was accurate) as well as a particular description of the subjects contained in a schedule to the standard security. That particular description was taken from the description in the Sasines title and, as might be expected in the title to a sizable farm, is lengthy containing as it does various exceptions and reservations.

[6]        Unfortunately, the solicitor who prepared that schedule did so incorrectly. Missing from the particular description, in about the middle, are about 8 lines which includes the end of the second (of four) exceptions from title and most of the third exception. Unfortunately, nobody, including the Keeper, noticed this at the time. When the calling up notice was prepared and served by agents for the pursuer in October 2014, the draftsperson copied the description of the subjects, both by reference and in particular from the standard security not noticing that the particular description was inaccurate. It was only in the course of this action that the error was noticed by the defender (or more likely, those instructed by him) who now claims in this action that owing to the error in both the standard security and the calling up notice, the action is incompetent and falls to be dismissed.

[7]        The pursuers amended their pleadings seeking rectification of both documents in terms of sections 8 and 9 of the Law Reform (Miscellaneous Provisions) Scotland Act 1985 (“the 1985 Act”) (although their primary position is that rectification is not strictly speaking necessary but should be done anyway for clarity and convenience). The defender responds that rectification is essential but that in this summary application it is incompetent to seek rectification: that may only be done in an ordinary action in the Sheriff Court, or in the Court of Session. Furthermore, rectification must logically and legally precede commencement of this action. In addition, the defender says that the calling up notice is not a type of document that may be rectified under the 1985 Act. The defender says therefore that this action is incompetent and falls to be dismissed.

[8]        There is a further issue that arises in this case.  The parties have decided that the subjects include a building used “for residential purposes”, and therefore it follows that section 24(1C) of the Conveyancing and Feudal Reform (Scotland) Act 1970 (“the 1970 Act”), as amended by the Home Owner and Debtor Protection (Scotland) Act 2010 (“the 2010 Act”) applies. That section provides that before a creditor in a standard security may apply to the Court for the exercise of remedies as against a debtor who is in default, it must comply with the “pre-action requirements” imposed by section 24A of the 1970 Act. Those requirements in section 24A are to be read with the relevant Scottish Statutory Instrument being The Applications by Creditors (Pre-action Requirements) (Scotland) Order 2010, (“the Order”) and in particular article 2 thereof. The parties are agreed that “default” in this context occurred only after the expiry of the default notice. They are agreed that the only document relevant for this purpose which is relied on by the pursuer is a letter sent on their behalf by their agents to the defender on 23 December 2014 (“the December 2014 letter”).  Put short, the pursuer contends that that letter contained all that was necessary to comply with section 24A of the 1970 Act and the Order. The defender says otherwise and that therefore the action is incompetent and falls to be dismissed.


The submissions

[9]        The Court benefitted greatly from well-considered, detailed and knowledgeable submissions from junior counsel for both parties. Those submissions were clear, skilled and focused on the matters in dispute. The defender’s rule 22 note was well and concisely drafted. These matters are not at all straightforward. I am grateful to both counsel for the considerable assistance they provided to the Court. However, I hope that I will be forgiven if I do not attempt to rehearse their careful submissions here. Rather, I have referred to them above in my summary of the background to this case and will refer to them below in considering my decision on each of the principal issues put before me. I should make clear that I have taken account of all arguments put before the Court even if I do not make specific reference to every aspect of the submissions.

[10]      I should also note that I was referred to a large number of authorities. In addition to the legislation referred to above, I was taken to the following. For the pursuer, I was referred to: Stair Memorial Encyclopaedia, Vol 15, 20, Reissue 5; Halliday Conveyancing Law and Practice (2nd ed.); Higgins The Enforcement of Heritable Securities; Swift Advances PLC v James Bain Martin and Others [2015] CSIH 65;  Macphail Sheriff Court Practice Chp 24; Scottish Law Commission, Report 79, Report on Rectification of Contractual and Other Documents (1983); The Centre for Maritime and Industrial Safety Technology Ltd v Ineos Manufacturing Scotland Ltd [2014] CSOH 5; Rehman v Ahmad  1993 SLT 741; Matheson v Gemmell (1903) 5F 448; Murray’s Tr. v Wood  (1887) 14R 856; Northern Rock Asset Management) PLC v Doyle 2012 HousLR 94; Westfoot Investments Ltd v European Property Holdings Inc. 2015 SLT (Sh Ct) 201.

[11]      For the defender I was referred additionally to Scott v Livingston 1919 SC 1; Strathclyde Securities Co Ltd v Park 1955 SLT (Sh Ct) 79; Hill Samuel & Co Ltd v Haas 1989 SLT (Sh Ct) 68; Cedar Holdings Ltd v Iyyaz  1989 SLT (Sh Ct) 71; Clydesdale Bank plc v R. Findlay & Co 1989 SLT (Sh Ct) 77; Sheriff Courts (Scotland) Act 1907 (“the 1907 Act”); section 8 of the 1985 Act, as annotated by Professor JM Thomson; The Conveyancing Opinions of JM Halliday; Gretton and Reid Conveyancing (4th ed.); Macphail Sheriff Court Practice, Chp 26. An excerpt from Cusine and Rennie Standard Securities was included in the list authorities but not referred to by anyone. I have read it nonetheless.



[12]      The description of the subjects issue. I begin first with the question of the error in the particular description contained in the standard security, which was then carried over into the terms of the calling up notice. The short question is whether that error in some way invalidates these documents. If it does, then one would need to consider the effect of the invalidity and in particular whether rectification of those documents can be obtained and, if so, by what method. If the error does not invalidate those documents, the only question remaining is whether the pre-action requirements have been complied with.

[13]      I should first make some observations about the nature of the error in the standard security. The standard security clearly identifies the nature of the document, the parties and the obligations secured. It is properly executed. So far as the description of the subjects is concerned, this is done in three ways. First, the subjects’ address is accurately given in full with a postcode. It is then “more fully described in the schedule annexed…”. I shall come to that shortly. Before one gets to the schedule, the operative words of the standard security are expressed to be “over ALL and WHOLE the subjects and others described in the schedule annexed and signed as relative hereto…”. The subjects are then described by reference to the writs from which the proprietor (here, the debtor) acquired right. All that description by reference is accurately done. If one went to those writs, one would discern readily the full extent of the lands included and excluded within the Harperfield Farm title. When one turns to the Schedule, one finds 1½ pages of what purports to be a description of the subjects. It identifies the subjects briefly, specifies the exceptions and reservations (which appear to be parts of the subjects disponed to others well before 1989) with reference to the relevant deeds, it includes servitudes and servitude rights and then concludes: “which subjects are described in Disposition by Thomas Ronald Lindsay and others as trustees within mentioned in favour of Thomas Ronald Lindsay and Euan McIntyre Lindsay dated tenth and recorded in the said Division of the General Register of Sasines on Twenty fourth both days of November Nineteen hundred and eighty nine”.  Thus, if the subjects had been described only by the address and by reference, the exact extent of the subjects would be clearly capable of precise ascertainment. It is the addition of the erroneous particular description that has led to the present difficulty. If that erroneous description were put to one side, there would be no argument at all concerning the adequacy of identification of the subjects in the standard security. That would be equally true of the description in the standard security.

[14]      I note also that the pursuers admit at article 3 of Condescendence that it was the solicitor who prepared the conveyancing description for the standard security who omitted the passage. It is admitted that the standard security “relates to subjects at Harperfield Farm” and that a passage of text was omitted from the standard security and that the words omitted in error are those contained in the first crave. It is admitted that the omitted passage forms part of the exceptions to the title. Nonetheless it is averred that the standard security is “null and void” as it “does not describe the subjects of which the late Euan McIntyre Lindsay was the proprietor”. So far as the calling up notice is concerned, the principal position of the defender in Answer 6 is that since the standard security is “null and void”, the calling up notice is null and void and the calling up notice also misdescribes the subjects in the same way as the standard security.

[15]      In Halliday, one sees summarised the requirements for identification of unregistered land (such as the subjects) at paragraph 33-05 et seq.  At common law, the description of subjects in a conveyance must embrace everything that is intended to be disponed and the subjects shall be capable of clear and absolute identification. A description in any mode which secures identification of the land is enough. Even though a description in a disposition has omissions or errors in details, it is sufficient if the remainder of the description identifies the subjects conveyed. Description by reference is widely used in terms of statute[1] for unregistered land. The essential elements to be specified are the name of the county in which the subjects are located and the prior recorded deed which contains a particular description of the subjects which are in terms sufficient to identify the deed (which must include the recording date of the deed and the Division of the Register in which the deed is recorded). A short description of the subjects, for example by the postal address is desirable but unnecessary. Thus, according to Halliday, there are two acceptable methods of identifying the subject of a deed for conveyance: by particular description or by reference.

[16]      So far as the legal requirements for the form of a standard security are concerned, section 9(2) of the 1970 Act provides that “a standard security over any land or real right in land [is] to be expressed in conformity with one of the forms prescribed in schedule 2 …”. The relevant form is Form B.  Note 1 to the form used to provide inter alia that “Note 1. The security subjects shall be described by means of a particular description or by reference to a description thereof as in Schedule D to the Conveyancing (Scotland) Act 1924…”. That was the version of Note 1 lodged in Court by the pursuer and as I understood the submissions made to me, that was thought to be the relevant version of the schedule. Unfortunately, that version of Note 1 is now out of date. Counsel were perhaps misled by the fact that amendments to Note 1 made by schedule 12(23) to the Abolition of Feudal Tenure etc. (Scotland) Act 2000 (“the 2000 Act”), with effect from June 2000, have not found their way into the Westlaw version of schedule 2 to the 1970 Act which refers the reader to the unamended printed version of the schedule, now out of date. Note 1 now reads: Note 1.–The security subjects shall be described sufficiently to identify them; but this note is without prejudice to any additional requirement imposed as respects any register[2].” Thus, the prescribed means of description which had been one or either method has significantly changed. The test now appears to be whether the description is sufficient to identify the subjects, whatever method, or combination of methods, is used. It appears to give a rather greater latitude to the person drafting the deed. Nonetheless, whatever method is used must be such that the subjects can be sufficiently identified and if the method used fails to achieve that object, the security is not in the form prescribed. 

[17]      I did not invite further submissions on that matter once I discovered the amendment to the legislation while writing this judgement. That is because it seemed to me that the essential thrust of the contentions by both parties must still rest on similar ground: does the admitted error in description invalidate the deed in some way so as to prevent the pursuer from pursuing his remedies? I took the view that I had heard sufficient from the parties’ representatives to reach a conclusion.  I also took the view that despite the amendment to the legislation, it was still worthwhile to consider the case law under the previous legislation. Before doing so, I should finish my observations on the pertinent legislation.

[18]      So far as the requirements for the calling up notice are concerned, section 19(1) of the 1970 Act provides that a debtor wishing to require discharge of the debt and, failing discharge, to exercise the remedies permitted by section 19(1), shall serve a calling up notice “… in conformity with schedule 6 to the Act…” which contains the Form. That Form requires inter alia that the address of the subjects be inserted, which is then to be referred to as “the property”. In addition, the standard security over that property which is being thereby called up must be identified by reference to the parties to the standard security and the place and date of registration or recording. Unlike the Form for a standard security, there is no Note specifying the manner in which the subjects are to be described. Rather, the Form requires simply the address and a reference to the recording or registration of the standard security.

[19]      Section 53(1) of the 1970 Act (which was not amended by the 2000 Act) provides as follows:

It shall be sufficient compliance with any provisions in this Act which require any deed, notice, certificate or procedure to be in conformity with a Form or Note, or other requirement of this Act, that that deed, notice, certificate or procedure so conforms as closely as may be, and nothing in this Act shall preclude the inclusion of any additional matter which the person granting the deed or giving or serving the notice or giving the certificate or adopting the procedure may consider relevant.

[20]      Section 53(1) applies to both the calling up notice and the standard security. As I understand it, the phrase “as closely as may be…” means ‘as closely as may be appropriate to the circumstances of the case’, that is, some latitude may be allowed.  I note that this view was taken by Lord Glennie in Henderson v Foxworth Investments Ltd [2011] CSOH 66 and I adopt the same interpretation. Earlier statutes in the field, such as the Conveyancing Scotland Act 1874 and 1924, use the term “as nearly as may be” instead when detailing the type of specification required in analogous circumstances.  It was not suggested by counsel that there is any significant difference in meaning between these phrases and in my view, there is none.

[21]      Case law concerning erroneous descriptions found in different types of writs relating to heritage is of assistance. In Matheson, a decision of the Inner House, the seller of lands described those lands in the disposition by both a particular description (which was rather generalised and incomplete) and reference to a prior deed. Unfortunately, the reference was wrong in that it identified a Mrs Jane Robertson or Willis as the disponer of the land rather than Mr George Willis. The Court held that the question was “whether there is such a misdescription in the deed…as to invalidate the sale”. The Court concluded that there was not and held that “There is merely such a misdescription as falls under the category of falsa demonstratio and the deed referred to for the purposes of description is sufficiently identified by the family name of the disponer, the full name of the disponee and the date of the recording”. The court held that it was also possible to combine both a specific description and a description by reference to identify the subjects and that in this case, had it not been for the erroneous reference to a deed made by Mrs Willis, that combined description would have been effectual. The Court appears to have simply put aside that aspect of the deed which was misleading and then concluded that what was left “sufficiently identified” the subjects (a phrase which echoes the present statutory requirement in schedule 2 to the 1970 Act).

[22]      The Latin tag employed by the Court is, in my view, a shorthand reference to the brocard falsa demonstratio non nocet. That is explained in Traynor’s Latin Maxims as follows: “An erroneous description does not injure. Where the description is merely expository, an error in it will not vitiate if there be no doubt as to the identity of the person or thing intended to be specified.” Examples are given of its application, mostly concerning construction of testamentary writings but also the following:  “A conveyance of “my house in Queen Street occupied by A B” would be a good conveyance although the house was not occupied and had never been occupied by the tenant named”. The same text identifies a related brocard, derived from Justinian Institutes: falsa demonstration legatum non perimi, meaning that “a legacy is not rendered void by a false description”, which would appear to be a more particular expression of the former, more general brocard. I conclude that in analysing the effect of errors in description in deeds such as this standard security, it is permissible to apply the former brocard as an aid.

[23]      In Murray’s Tr. v Wood, a Mr Murray, a builder, granted a bond and disposition in security over land in favour of the defender in return for a loan of £1,000 from the defender.  Five years later, Mr Murray was sequestrated and the issue was whether the debt due to the defender would rank in the sequestration. The trustee disallowed it on the basis that the bond and disposition in security, taking advantage of the statutory option under the 1874 Act to describe the subjects by description, did not do so properly as the day of the month on which the reference deed was registered in the General Register of Sasines was omitted and it was therefore not possible to identify the land referred to in the bond and disposition in security. The Lord Ordinary rejected that argument, finding that a search in the Register for Writs registered over a number of days would enable the writ referred to be found and therefore the subjects identified. That was, he opined, sufficient in terms of the 1874 Act to identify the subjects, taking account of the statutory requirement that the reference be “as nearly as may be” in terms of the schedule. The Inner House, the Lord President in the Chair, upheld the Lord Ordinary. Although the statute required the date of the registration of the writ to be completed, that failure did not nullify the bond. It would be possible to discover what writ was referred to by a search of the Register over a given number of days and the statutory requirement was that the description be “in, or as nearly as may be” the form set forth in the schedule was complied with.

[24]      I take from this case the conclusion that a description of the subjects in a standard security which is faulty, will be sufficient so long as what is contained within the description is sufficient, if necessary after reasonable search and enquiry, to enable the subjects of the security to be correctly identified with certainty. Again, there are echoes here with the present statutory test in schedule 2 of the 1970 Act.   Further, in my view, although the cases of Murray’s Tr and Matheson are both examples of cases where the error was in the reference, in my view the same principle would apply where the error is found in the particular description.

[25]      Counsel for the defender in this case did not accept that there was that degree of latitude. He referred me to the following cases. Scott v Livingstone is a case involving construction of a notice to quit. The statutory regime applicable to that notice to quit (the 1907 Act) required that the notice be “as nearly as may be in Form H” which required inter alia a description of the subjects. The Court held that the notice was invalid. The description of the subjects was not “as nearly as may be” in the required Form, the description of the subjects was “as far away from that form as could well be” and was “rather misleading”. The Lord Justice Clerk also observed that the proceedings in that action for ejection were summary proceedings and that it was undesirable in cases of that kind “to increase the risk of litigation …by letting in facts and circumstances [to supplement the description] as supplying its place”.

[26]      I did not find this case of much assistance. In the first place, it concerned the validity of a notice to quit in an action for ejection, which is an area with its own specialised jurisprudence. Apart from the fact that both concern heritage, it is not sufficiently analogous to the area with which we are concerned here: the construction of legislation relating to securities over land and title to land. The reference to procedure in summary proceedings needs to be read in that context in my opinion.  In the second place, even if the foregoing observations are wrong, that was essentially a decision which turned on its own facts requiring a judgement by the Court as to whether, in the particular circumstances of that case, the description was “as nearly as may be” compliant with the terms of the statute.  The Court’s view was that it did not and that the description was as far from the required form as could be.

[27]      I was also taken to the decision of a Sheriff-Substitute in Strathclyde Securities Co Ltd v Park.  That concerned a description in a bond and disposition in security. The question there concerned the validity of that writ given that in some respects, the writ did not comply with the Form set out in the 1924 Act. In the view of that Sheriff, the omission of certain details meant that the bond was not “as nearly as may be” in the correct form and so dismissed the application. I did not find this case of much assistance. In the first place, it is the decision of a Sheriff Substitute rather than a higher court, to be given due respect of course, but not one that is binding on me or even persuasive. Secondly, the action was undefended and there does not even appear to have been any argument advanced by the pursuer. The value of the decision is therefore much reduced. Thirdly, the decision makes no reference at all to any of the case law.

[28]      I was also referred to the decision of Sheriff Principal Caplan of North Strathclyde in Hill Samuel & Co v Haas. In that action, the creditors under a standard security sought to enforce the action. He dismissed the action on the basis that the calling up notice was served on “R Haas and Mrs R. Hass” even though it was only Mrs Haas who had granted the standard security. In so deciding, the he held that “There is a clear principle that when significant rights depend on compliance with statutory formality the prescribed formality must be strictly observed”. I do not find that case of much assistance for the following reasons. Firstly, and regrettably, his attention was not drawn to section 53(1) of the 1970 Act which as has been seen does permit derogation from the strict terms of the statutory forms contained within that Act. Secondly, he appears not to have been referred to decisions of the more senior courts, some of which I note above. The statute and that case law do rather run counter to the principle upon which his decision appears to have been based. Furthermore, the facts turn on the failure of the pursuers to identity the correct recipient of the calling up notice rather than the question of misdescription of the subjects. In addition, that decision is in any event not binding on me. I therefore decline to follow it in so far as it may be thought that it expresses a principle that must be applied in cognate cases.

[29]      Conclusion on the description of subjects issue.  I conclude that there is in the standard security an error in that while the subjects were correctly described by reference, owing to a mere clerical error or oversight, part of the full particular description was omitted. So, if one sets aside the particular description, what remains is a fully sufficient description of the subjects, sufficient to accurately identify them without any reasonable doubt. That error has not led to any practical error in identifying the subjects of the standard security which is Harperfield Farm in the standard security. The precise boundaries of those subjects are apparent from the description by reference. The error has led to no confusion about that fact in anyone’s mind, not least, the present defender.  That is plain from the pleadings. The brocard falsa demonstratio non nocet applies to that erroneous description. Alternatively analysed, the property description is, in the circumstances of the case, as closely as may be in terms of the statutory form: it sufficiently identifies the subjects of the standard security.

[30]      So far as the calling up notice is concerned, since the principal argument of the defender is that the invalidity of the standard security thereby vitiates the calling up notice, and since I find that the standard security is valid, that argument falls. In any event, I find that the calling up notice is valid. It complies with the statutory Form in schedule 6 in so far as it gives the address of the subjects accurately and it accurately refers to the standard security by reference to the parties and where and when it was recorded. Although the draftsperson of the standard security has gone much further than he needed to in drafting the calling up notice by attempting to give as complete a description as possible of the subjects (and has failed to do so accurately as the same error in the standard security is repeated in the calling up notice), that error does not in my view invalidate the calling up notice. The identity of the property which is the subject of the calling up notice, and the identity of the standard security upon which the calling up notice proceeds, is made sufficiently clear in the notice. It is not claimed that there was any doubt as to what property or standard security the notice concerned. In my view, the calling up notice was compliant with section 19(1) being in a form as close as may be to the statutory Form in schedule 6 (taking account of section 53(1)), and is therefore valid.

[31]      In summary, I conclude that both the standard security and the calling up notice are valid. It follows that neither document is in need of rectification in terms of section 8 of the 1985 Act and I reject the defender’s arguments to the contrary. 

[32]      Rectification. However, in deference to the time and effort that those appearing before me put into argument on this matter, and in the event that I am wrong as regards the validity of the two documents, it is right that I set out my conclusions on the rectification matter.

[33]      The relevant parts of the 1985 Act are as follows.

8.— Rectification of defectively expressed documents.

(1) Subject to section 9 of this Act, where the court is satisfied, on an application made to it, that—

(a) a document intended to express or to give effect to an agreement fails to express accurately the common intention of the parties to the agreement at the date when it was made; or

(b) a document intended to create, transfer, vary or renounce a right, not being a document falling within paragraph (a) above, fails to express accurately the intention of the grantor of the document at the date when it was executed,

it may order the document to be rectified in any manner that it may specify in order to give effect to that intention.


(3) Subject to section 9 of this Act, in ordering the rectification of a document under subsection (1) above (in this subsection referred to as “the original document”), the court may, at its own instance or on an application made to it [and in either case after calling all parties who appear to it to have an interest][3], order the rectification of any other document intended for any of the purposes mentioned in paragraph (a) or (b) of subsection (1) above which is defectively expressed by reason of the defect in the original document.

(3A) If a document is registered in the Land Register of Scotland in favour of a person acting in good faith then, unless the person consents to rectification of the document, it is not competent to order its rectification under subsection (3) above.

(4) Subject to sections 8A and 9(4) of this Act, a document ordered to be rectified under this section shall have effect as if it had always been so rectified.

(5) Subject to section 9(5) of this Act, where a document recorded in the Register of Sasines is ordered to be rectified under this section and the order is likewise recorded, the document shall be treated as having been always so recorded as rectified.

(6) …..

(7) …..

(8) …...

(8A) …..

(9) In this section and section 9 of this Act “the court” means the Court of Session or the sheriff.


[34]      The first question is whether the two documents are in principle capable of rectification under the 1985 Act. So far as the standard security is concerned, there is no doubt in my view but that it is a document falling within section 8(1)(a) being a bilateral document intended to express or give effect to an agreement. There was no argument before me to the contrary.

[35]      So far as the calling up notice is concerned, counsel were unable to find any authority bearing on whether a calling up notice was a document capable of rectification. Counsel for the defender, focusing on the terms of section 8(1)(a), argued that it was not a document falling within that class of documents and did not fall within section 8(1)(b). Counsel for the pursuer argued that it fell within section 8(1)(b) as being a unilateral document intended to create a right which failed to express accurately the intention of the grantor in that the grantor had not intended to misdescribe the subjects of the security. I note that the section appears to apply to all documents other than those of a testamentary nature: section 8(6). I note also the view of the Commission that the legislation should apply to a wide range of documents, the power being generally unrestricted so long as the document fell within the section 8(1) categories and was not testamentary: see paragraph 3.4 of the Report.

[36]      In my view, a calling up notice is a document which is capable of rectification in terms of that paragraph. In so deciding, I have had regard to the whole of the report of the Scottish Law Commission which was the genesis of the rectification provisions in the 1985 Act. It is permissible when construing this part of the Act to take into account such a Report: see Rehman v Ahmad. It is quite plain from the terms of that Report that the Commission envisaged that rectification would apply both to bilateral documents as well as unilateral documents. See in particular paragraphs 3.6 et seq. The Commission notes at paragraph 3.7 that by unilateral documents, they meant documents which of themselves create or affect rights or obligations but which do not give effect to an agreement. The Commission notes that defective expression in a unilateral document may be attributable to acts or omissions very similar to those which cause problems for contracts, such as a simple typographical error, but that the principal difference between contractual and unilateral writings, for the purposes of rectification, relates to the proof of the intention which it is claimed has been defectively expressed.

[37]      In my view, a calling up notice is a notice which creates rights. One right which is created is the right to repayment of the loan from the debtor. Where that loan is not repaid in terms of the calling up notice, the creditor serving the calling up notice is given the right to take proceedings for the enforcement of the standard security. In my view, if one starts with rectification of the standard security, which would be logical, rectification of the calling up notice would also be competent in terms of section 8(3) of the Act on the basis that the reason for the defective expression of the subjects in the calling up notice is because the description there is taken directly from the standard security description which itself was incorrect. Although it was not argued, and I do not have to decide the matter here, it may well be that a standalone application to rectify the calling up notice would be competent in any case under section 8(1)(b).  In any event, in my view, rectification would in principle be available for both documents. Moreover, as section 8(4) and (5) make clear, the effect of rectification is retrospective (subject to certain qualifications which are not relevant here). Thus, the documents are treated as having always having been in the rectified version. Accordingly, contrary to arguments by the defender, it matters not that originally the calling up notice identified the subjects inexactly: the retrospective effect of rectification removes that difficulty. 

[38]      Accordingly, in my view, if it were possible in these proceedings to rectify those two documents, the effect of the legal fiction created by rectification would mean that both the standard security and the calling up notice correctly describe the subjects and therefore the only proper crave could be a crave referring to the full and correct description of the subjects and not the erroneous description. That is what has been done in these proceedings by the pursuer.

[39]      Would rectification be competent in these proceedings? The next question which divided the parties was whether if rectification of each document were in principle competent, whether it would be competent to seek rectification in these proceedings which commenced life (properly) as a summary application: see section 22(1D) of the 1970 Act. In other words, given that the original and principal purpose of these proceedings was enforcement of the standard security in terms of the 1970 Act, and such proceedings must be raised by means of a summary application, would it be competent in the same proceedings to seek rectification as a precursor to obtaining orders for the enforcement of the corrected standard security?

[40]      In my view, it would not be competent to do so. In my view, an action for rectification of the two documents has to be done in a separate process under ordinary procedure or in the Court of Session. I make that conclusion for the following reasons. First, section 39 of the 1907 Act provides as follows “Subject to the provisions of any Act of Parliament in force after the passing of this Act, the procedure in all civil causes shall be conform to the rules of procedure set forth in the first Schedule hereto annexed. Such rules shall be construed and have effect as part of this Act.” Of course, the rules of procedure in the first schedule are the Ordinary Cause Rules. Thus, the default position is that all civil causes proceed as ordinary causes unless there is statutory provision to a different effect. Therefore, an action for rectification must proceed as an ordinary action unless one can point to some other statutory basis for a different form of procedure to be used. The 1985 Act is completely silent on that question. It provides merely, reading section 8(1) with section 8(9), that an application for rectification may be made to either the Court of Session or the Sheriff Court. Neither are there any other rules relating to any other court procedure which specifically refer to applications for rectification. The Ordinary Cause Rules make no explicit reference to rectification, which does not take one further forward one way or the other. The same is true of the summary cause rules and small claims rules.

[41]      If one approaches it from another perspective, examining whether the law relating to summary applications permits that procedure for this purpose,  one sees that section 3(p) of the 1907 Act provides as follows: “Summary application means and includes all applications of a summary nature brought under the common law jurisdiction of the sheriff principal and all applications whether by appeal or otherwise brought under any Act of Parliament which provides or according to any practice in the sheriff court, which allows that the same shall be disposed of in the summary manner, but which does not more particularly define in what form the same shall be heard, tried and determined.” An application for rectification is of course not an application brought under the common law jurisdiction of the Sheriff Principal. Neither is it an application brought under an Act of Parliament which provides that the same shall be disposed of in a summary manner. As I say, the 1985 Act is silent. Neither can it be said that the application is brought under an act of Parliament which according to any practice in the Sheriff Court allows the same to be disposed of in a summary manner. There is not in my experience and knowledge any practice within the Sheriff Court which allows such applications to be disposed of in a summary manner. Neither did counsel for the parties bring any such practice to my attention. So, there is no Act of Parliament or secondary legislation explicitly providing for an alternative to ordinary procedure.

[42]      However, although the following was not suggested by counsel, it did occur to me that it might be argued that where in the course of proceedings concerned with a particular matter, one or either of the parties required to seek rectification as a mere adjunct to the principal action, that that might be permitted regardless of the form of procedure on the analogy that such rectification would be by way of exception and convenient, at least where it only affected the interests of the litigants themselves. The obvious analogy is the availability in the Sheriff Court to seek reduction of documents ope exceptionis.  If one recalls that prior to the introduction of the remedy of rectification, the remedies available were limited to reduction (often accompanied by declarator), that might seem to bolster the analogy.

[43]      However, I have come to the view that such an approach would not be permissible. In doing so, I adopt the carefully considered views of the Scottish Law Commission in their report supra at Part IX in the context of its consideration of whether the power of rectification should be available in both the Court of Session and the Sheriff Court. After referring to the decision of the Inner House in Donald v Donald 1913 SC 274 on the limited power of the Sheriff Court to set aside documents ope exceptionis, it concluded that:

this restricted jurisdiction permitting unlimited challenge of the document which could only be effective in respect of the litigating parties themselves would, we consider, be inappropriate in the context of the remedy of rectification which we have recommended. Such a remedy would be of general application if it were granted and would always be based on the prior consideration and protection of the interests of good faith third parties. Moreover, rectification, requiring proof of the very basis of the contract or a unilateral document, inevitably would affect the substance of the claim made by the party against whom it was sought and therefore it could not be equated with the limited challenges on the validity of documents currently admitted in the sheriff court. Consequently, we do not think that an ope exceptionis jurisdiction in the sheriff court would be suitable in the case of rectification.”

[44]      The Commission then left it to “the Government” to determine the most appropriate court jurisdiction. As I have noted, Parliament decided that both the Court of Session and the Sheriff Courts should have concurrent jurisdiction but so far as the Sheriff Court is concerned, did not go any further in determining the former procedure to be used[4]. In my view, standing the clear views of the Scottish Law Commission and in the absence of any other authority pointing towards the power of the Sheriff Court to deal with an issue of rectification in a like manner as the setting aside of documents ope exceptionis, there is no good argument that rectification might be sought in summary application proceedings as a mere adjunct to the principal cause of action. It may be that the Scottish Civil Justice Council might want to consider proposing an amendment to the Sheriff Court rules to make provision for procedure in such cases, as has already been done for the Court of Session.

[45]      Finally, on this subject, I should also consider whether notwithstanding the foregoing arguments, by implication section 24(1D) of the 1970 Act permits rectification in the same action. That section provides as follows: “An application under subsection (1B) above is to be made by summary application (regardless of whether it includes a crave for any other remedy)”. Section 24(1B) provides as follows: “A creditor in a standard security … [over land used to any extent for residential purposes] may, where the debtor is in default within the meaning of paragraph (a), (b) or (c) of standard condition 9(1) apply to the court for warrant to exercise any of the remedies which the creditor is entitled to exercise on a default within the meaning of standard condition 9(1)(a)”. The familiar remedies which a creditor in that situation is entitled to exercise are those set out in standard condition 10 which provides as follows:

10.— Rights of creditor on default.

(1) Where the debtor is in default, the creditor may, without prejudice to his exercising any other remedy arising from the contract to which the standard security relates, exercise, in accordance with the provisions of Part II of this Act and of any other enactment applying to standard securities, such of the remedies specified in the following sub-paragraphs of this standard condition as he may consider appropriate.

(2) He may proceed to sell the security subjects or any part thereof.

(3) He may enter into possession of the security subjects and may receive or recover [...] the rents of those subjects or any part thereof.

(4) Where he has entered into possession as aforesaid, he may let the security subjects or any part thereof.

(5) Where he has entered into possession as aforesaid there shall be transferred to him all the rights of the debtor in relation to the granting of leases or rights of occupancy over the security subjects and to the management and maintenance of those subjects.

(6) He may effect all such repairs and may make good such defects as are necessary to maintain the security subjects in good and sufficient repair, and may effect such reconstruction, alteration and improvement on the subjects as would be expected of a prudent proprietor to maintain the market value of the subjects, and for the aforesaid purposes may enter on the subjects at all reasonable times.

(7) He may apply to the court for a decree of foreclosure.


[46]      The creditor then can seek whatever of these remedies it wishes in the application under section 24(1B). But if the creditor, for example, wants decree for ejection or payment (or some other kind of ancillary remedy) in order to exercise a remedy given him by contract or standard condition 10, that may have to be craved in addition: decree of ejection or payment, for example, is not a standard condition 10 remedy. That will require therefore a separate crave. A standalone crave seeking warrant for ejection is found as matter of course in most such applications and indeed in the instant action. The reason why the statute was amended to include the proviso “(whether or not it includes a crave for any other remedy)” is to deal with the sort of difficulties that have arisen in the past about the appropriate form of procedure to be used where the creditor seeks decree under the 1970 Act and an ancillary order, such as for payment or ejection where it may be argued that a separate form of procedure is required for that ancillary order. That argument has caused difficulty and confusion in the past: see for example Hill Samuel & Co Ltd v Haas, Clydesdale Bank v R. Findlay & Co.  1989 SLT (Sh Ct) 77 and especially Cedar Holdings Ltd v Iyyaz. The purpose of section 24(1D), in my view, is to make clear that in a summary application for enforcement of a standard security, the creditor may combine in that action craves relating to contractual and standard condition 10 remedies together with craves which are merely ancillary to those craves necessary to give practical effect to those craves, such as ejection or payment. No separate action, proof or argument is required for those ancillary craves; they merely facilitate the enforcement of rights given elsewhere.

[47]      Such ancillary remedies are however very different from what is being sought here. If rectification were required, that would not be a merely ancillary crave or remedy. Rather, rectification would be a fundamental matter to be established as a precursor to decision on the principal matter of enforcement of the standard security.  On that footing, without rectification, there could be no granting of remedies for enforcement of the standard security.  In my view, one cannot draw from that section 24(1D) the power to have rectification dealt with in this summary action.  In my view, if rectification be necessary, that has to be sought by a separate and prior ordinary action in the Sheriff Court, or in the Court of Session.

[48]      In summary, if I had not concluded that the standard security and the calling up notice were each valid, I would have concluded that rectification was required, that it was incompetent to seek rectification in the course of these proceedings and I would therefore have dismissed the summary application on that basis.

[49]      Were the pre-action requirements met? I now turn to consider the final substantive matter raised in debate before me which can be put as follows. Given that the parties are agreed that the subjects were used to some extent for residential purposes; that before a creditor in a standard security may make an application to the court in terms of section 24(1B) for warrant to exercise remedies on default the creditor must comply with the pre-action requirements imposed by section 20A of the Act; that failure to comply with those requirements makes any such application incompetent: the question is whether this action is incompetent by reason of failure by the pursuer/creditor to comply with those requirements. If so, the parties are agreed that the action must be dismissed. The parties’ representatives were able to focus the question further as they were agreed that: the obligation under section 24A bites after the expiry of the calling up notice; the only pre-action requirement in question is the requirement in section 24A(2) of that section (read together with the terms of article 2 of the 2010 Order); and that there is only one document on which the pursuer relies as demonstrating that the requirements therein were met. I shall turn to that document shortly but first it is as well that I set out the relevant legislation.

[50]      Section 24A(2) of the 1970 Act provides as follows:

The creditor must provide the debtor with clear information about—

(a) the terms of the standard security;

(b) the amount due to the creditor under the standard security, including any arrears and any charges in respect of late payment or redemption; and

(c) any other obligation under the standard security in respect of which the debtor is in default.


The 2010 Order provides (so far as material) as follows

2.— Requirement to provide information about the default

(1) ….

(2) In providing the debtor with clear information for the purposes of section 5B(2) of the 1894 Act and section 24A(2) of the 1970 Act—

(a) information about the terms of the security must include a description of the nature and level of any charges that may be incurred by virtue of the contract to which the security relates if the default is not remedied; and

(b) information about the amount due to the creditor under the security, including any arrears and any charges in respect of late payment must be broken down so as to show—

(i) the total amount of the arrears; and

(ii) the total outstanding amount due including any charges already incurred.

(3) For the purposes of those sections “charges” do not include any expenses for which the debtor is personally liable to the creditor by virtue of paragraph 12 of Schedule 3 to the 1970 Act, as read with section 11 of that Act.

(4) The information required to be provided to the debtor by virtue of those sections must be provided as soon as is reasonably practicable upon the debtor entering into default.


[51]      It will be seen that even if one restricts examination of the pre-action requirements to this extent, they are detailed and fairly precise. The obligation under section 24A(2)(a) to provide “clear information” about the terms of the standard security is supplemented by a more specific obligation under Article 2(2)(a) to provide a description of the nature and level of any charges that may be incurred by virtue of the contract to which the security relates if the default is not remedied. The obligation under section 24A(2)(b) to provide “clear information” about the amount due to the creditor under the standard security including any arrears and any charges in respect of late payment or redemption is likewise supplemented by a more specific obligation under  Article 2(2)(b) to provide figures which are “broken down so as to show (i) the total amount of the arrears and (ii) the total outstanding amount due including any charges already incurred”.

[52]      The purpose of these mandatory provisions was described by Sheriff Deutsch in Northern Rock (Asset Management) plc v Doyle as being conceived for the benefit of the debtor and that they should be seen as part of the substantive provisions.  He was also of the view that the requirements were conceived in the public interest with a view to elimination of a perceived social injustice. With those observations I respectfully agree. In Westfoot v European Property Holdings Ltd, Sheriff Welsh QC stated at paragraph [17] that the court “has no power  … to grant an order for possession with a right of sale unless it is satisfied that the creditor has complied with the pre-action requirements…this judicial oversight and discretion to refuse decree constitutes a major debtor protection introduced by the legislation”. With those observations I also respectfully agree. In Swift Advances v James Bain Martin & Ors, Lord Malcolm, giving the judgment of the Court, said at paragraph [27] that “The pre-action requirements introduced by the 2010 Act in respect of residential borrowing are designed to ensure that there is a genuine exploration of the possibility of an arrangement being reached whereby, in due course, the default can be remedied, albeit this may require some indulgence on the part of the creditor. The whole tenor of section 24A(3) and (4) is of discussions aimed at an alternative agreement whereby the debtor’s obligations can be fulfilled… The process must be carried out in a reasonable and unhurried manner using “plain English”. If a court action is raised, the [Scottish Ministers’] guidance provides that the creditor must be in a position to demonstrate that he has complied with the pre-action requirements.” 

[53]      The legislation has to be interpreted with all these considerations in mind. In my view, the obligation in terms of section 24A(2) and Article 2(2) to provide clear information about the amounts due under the contract, the arrears and the charges in respect of late payments and so on is an obvious component of the pre-action requirements. The debtor needs to understand the total amount that is being sought and the basis for the calculation of that amount, with the sum being broken down so as to distinguish between the amount due under the security (the principal sum), the amount of the arrears and the amount due in respect of charges already incurred so that the debtor has a meaningful basis on which to check the amount said to be due and to consider how repayments might be made of the sums said to be due including the principal, arrears and charges. He also has an opportunity to query the amounts claimed and to seek to correct any erroneous calculation. Clear information about the size of any liability and how the liability has been incurred is in my view an essential component of a process leading to meaningful “discussions aimed at alternative agreement”. Furthermore, the legislation does not presume that the debtor has retained a complete and accurate understanding of the nature and level of charges that may be incurred under the contract and requires the creditor to provide that information afresh after the expiry of the calling up notice. The purpose of that, in my view, is so that the debtor is better able to understand how the liability to date has been incurred and is warned of his potential liability for future charges in the event that the default continues.

[54]      I turn now to consider the attack by the defender on the extent to which the pursuer has complied with section 24A(2) and Article 2 of the Order. The relevant parts of the letter dated 23 December 2014, (“the December 2014 letter”) (which is the sole basis on which the pursuer says that the pre-action requirements are satisfied) are as follows. Those parts not relevant to the attack are not reproduced. It is accepted that those other parts enable compliance with the other pre-action requirements.

“Dear Sir

Our client: Outlook Finance Ltd

Account: The Harperfield Loan

Account balance: £2,884,539.97

Account Arrears: £2,884,539.97

Your property: [….]

We refer to previous correspondence and in particular to the Calling Up Notice which was served on you. ….


Costs and Shortfall

You should also be aware that you will be liable for all costs and any arrears charges under the terms of your account terms and conditions that result from the default on your account. You will also be liable for any financial loss suffered by our client should your property be taken into possession and subsequently the sale results in a loss.

The details of any charges that may be incurred on your account (excluding legal charges) as a result of the default are detailed in the undernote below and have also already been sent to you by our client. You will also have already received statements detailing the position of your account including any charges to date on your account is [sic] contained in our client’s account terms and conditions.



Description of charge                                                                     amount

Increased interest rate on default                                                  0.1% per day “


[55]      It should be noted that although the letter makes reference to previous correspondence and statement detailing the position of the account and so on, none of that accompanied the letter.  Furthermore, that material was not referred to in the pleadings or produced at debate and counsel made no attempt to submit that the terms of this letter had to be read with any such material (or indeed any other material pre-dating or postdating this letter) or indeed that such material existed. The bald position of the pursuer was that within the four corners of the letter, without reliance on other material, compliance in full with the pre-action requirements could be demonstrated.

[56]      I deal first with the requirements under section 24A(2) and Article 2(2)(a) to provide information about the terms of the standard security including a description of the nature and level of charges that may be incurred under the contract to which it relates. As I have noted above, the contract stipulates a number of consequences of defaulting on payment of the monthly interest. Interest on the amount then outstanding of 0.1% per day is payable until the full amount outstanding is paid (both before and after judgement). The only reference to that charge is in the undernote in the letter of 23 December 2014 where that charge is glossed as “increased interest rate on default of 0.1% per day.” While in my view, that undernote does not fully reflect the terms of the charge as it is set out in paragraph 6 of the loan contract, and while I consider the matter is not entirely free from doubt, I consider that the reference to that charge in the undernote is a rough but acceptable reference to the full expression of the additional charge payable on default. Counsel for the defender did not seek to argue otherwise. Rather, the thrust of his attack was in respect of the specification of the amounts said to be due by the debtor to the creditor. I have already noted at paragraph [3] above that the contract of loan provided for other charges and costs in addition to the 0.1% charge. These are not specified in this letter. Counsel for the defender however made no argument about them. Possibly he considered that those charges were exempt from specification by Article 2(3) of the Order, which may be so. However, the existence of such additional charges is not irrelevant to the next issue, being the specification of sums said to be due. 

[57]      It is in my view a notable feature of this case that initial borrowing of about £1.3 million in 2009, where interest was fully paid until October 2012, has turned into an alleged liability of over £2.61 million by October 2014 which rose to £2,884,539.97 by 23 December 2014. I set out in paragraph [4] how the total amount due is said to have increased over time. However, it is quite impossible to tell from the terms of the letter how the figure of £2,884,539.97, which is said to be the account balance, is made up. All the debtor is told is that £2,884,539.97 is the total account balance and, oddly, that the arrears amount to the same sum. The statutory obligation is to provide “clear information” about the matters referred to in the legislation. Whether information is “clear” or not has to be judged in my view objectively. What the legislation has in mind in my view by the use of the words “clear information” is that the reader should be left in no reasonable doubt as to how the total amount said to be due by the creditor to the debtor has been arrived at, at least so far as an accounting is provided showing the principal sum borrowed, the arrears of payments due under that contract that have been incurred and also charges which have been incurred by the debtor pursuant to the contract attributable to the default. That has not been done here. Instead, one single global figure is given wherein the “account balance” is said to be equivalent to the “account arrears”. Furthermore, while it is evident that there has been a very large increase in the total sums said to be due by the debtor to the creditor, the creditor has chosen not to provide any explanation as to the way in which the total sum due has been arrived at. While one could of course deduct from the sum of £2,884,539.97 the original sum borrowed of £1,335,000 producing a figure of £1,549,539.97 and then conclude that some of that sum may be attributable to matters such as interest due on the original sum and the additional interest rate of 0.1% per day, there would always be doubt about that in the absence of a clear statement from the creditor. When one then considers that the contract provides for other charges and costs for which the debtor is said to be liable (see paragraph [3]) above, which are not mentioned at all in the letter, it is quite impossible for the reader to determine the way in which the whole figure has been arrived at. In any case, the obligation is on the creditor to provide the clear information, not for the debtor to attempt, perhaps wrongly, to infer the way in which the figure has been arrived at.

[58]      In this case, not only has the clear information and breakdown not been provided by the creditor, it cannot even be said that the information which the statute provides must be supplied can be deduced or inferred in some other way. Quite simply, at least so far as the material that has been relied on in this debate is concerned, the defender is faced with a simple bald and very large figure presented to him by the creditor without any attempt to explain how that figure has been arrived at. In my view, that approach does not comply with the requirements under section 24(A(2) and Article 2. The onus is on the pursuers to demonstrate compliance with the pre-action requirements. They have failed to do so. It follows therefore that this action is incompetent and falls to be dismissed.

[59]      So far as expenses are concerned, I will arrange for a hearing on that matter to be fixed in due course. If however the parties are content to agree between themselves the question of expenses, I would be content in principle to deal with that matter in chambers, without the necessity of a hearing, on receiving intimation by the parties to that effect.



Sheriff Derek O’Carroll, Advocate

Sheriff of South Strathclyde Dumfries and Galloway at Lanark

5 August 2016



[1] Conveyancing (Scotland) Acts 1874 and 1924.

[2] Such as the title number in the case of a registered title.


[4] By contrast, chapter 73 of the rules of the Court of Session make specific provision for the procedure to be followed where rectification in terms of section 8 is sought.