Court rules Interpretation & Legislative Reform (Scotland) Act 2010 does not apply to Scottish PAR, as repossession action dismissed as incompetent

Sheriff Reid at Glasgow Sheriff Court has ruled that the Interpretation and Legislative Reform (Scotland Act 2010 (ILR(S) Act 2010) does not apply to The Applications by Creditors (Pre-Action Requirements) (Scotland) Order 2010 (SSI 2010/317 - the 'PAR')) in finding that a lender had raised incompetent mortgage repossession proceedings which did not comply with the Scottish PAR, and fell to be dismissed.

In a very thoughtful and complex judgment in the case of FirstPlus Financial Group plc v. Pervez, Sheriff Reid explains how the term 'default' as it appears in the PAR must bear the same meaning as it does in the relevant primary legislation - the Conveyaning and Feudal Reform (Scotland) Act 1970 and the Heritable Securities (Scotland) Act 1894. This was necessary in terms of section 11 of the Interpretation Act 1978.

In so doing, the court preferred the construction of Sheriff Deutsch in the cases of NRAM, Santander, and Nationwide Building Society v. Doyle and four others (cases where GLC acted for all defenders) and not the approach that Sheriff Bicket took at Hamilton Sheriff Court in the case of Accord Mortgages v. Dickson, which GLC believes was wrongly decided in relation to Sheriff Bicket holding that the ILR(S) Act 2010 applied to the PAR which led to him not following the decisions of NRAM v. Millar and RBS plc v. McConnell (cases where GLC acted for all defenders).

The judgment in Pervez examines many other important issues in relation to Scottish repossession law, and clarifies the proper statutory construction that lenders should apply to the PAR. The case of Pervez represented a strategic attempt by Optima Legal - a top 100 UK firm - to challenge the ratio of Sheriff Deutsch's judgment in NRAM v Millar, which had been appealed to the Inner House by NRAM but then subsequently dismissed with expenses in favour of the defender.

The pursuer in the case of Pervez was represented by Mr Gannon of Optima Legal (Glasgow), and the Mr Pervez was represented by GLC's Principal Solicitor, Mike Dailly. FirstPlus Financial Group plc
is a subsidiary company of Barclays Bank plc.

Court rules Interpretation & Legislative Reform (Scotland) Act 2010 does not apply to Scottish PAR, as repossession action dismissed as incompetent

GLC to participate in free Scottish mortgage repossession conferences

GLC's Principal Solicitor will be speaking at a free conference focussing on recent legislative and case law changes in Scottish mortgage repossession law, in Glasgow on 3 December 2012.

The event is being hosted and sponsored by the Carrington Dean Group. Mike will provide a review of recent Scottish case law, with a focus on statutory pre-action requirements and the issue of legal costs and charges in repossession cases. Other confirmed speakers include, Citizen Advice Scotland, Irwin Mitchell Solicitors and Tom McEntegart, managing director of TLT Solicitors. The conference will include an afternoon panel debate session chaired by advocate and Scottish Legal Action Group chairman, Robert Sutherland.

The conference will be held in the Laprohaig Theatre, Teacher’s Building, Glasgow on the December 3, 2012. A shorter seminar will be held in the Ramada Encore Hotel in Inverness on December 6. Anyone interested should contact alanmcintosh@carringtondean.com in the first instance. Both events are free to advisers and solicitors working in the industry.

GLC to participate in free Scottish mortgage repossession conferences

Lenders new PAR arguments rejected in NRAM, Santander & Nationwide v. Doyle and 4 others

New legal arguments by Aberdein Considine & Co., solicitors on behalf of three UK lenders have been rejected in a Scottish judgement from Sheriff Deutsch at Glasgow Sheriff Court. The judgment pertains to five separate mortgage repossession actions which were heard together earlier this year, with GLC's Principal Solicitor acting for all five defenders.

The 'Doyle judgment' provides helpful discussion on what lenders need to do to satisfy the 2010 Pre-Action Requirements (PAR) Order, with examples of three cases which failed to meet the 'minimum standard' required under the 2010 Order, and two cases which met the statutory test.

The Pursuers' solicitors unsuccessful challenged the ratio in Northern Rock (Asset Management) Plc v. Millar 2012 SLT (Sh Ct) 58, but had also set forward a number of new legal arguments which had not been considered in Millar. A number of new propositions were advanced, including: that the Interpretation Act 1978 did not apply; 'default' was truly under standard condition 9(1)(b); there should be a flexible time for PAR compliance; and that there was no mandatory requirement to comply with regulation 2 of the 2010 Order. All of these arguments were rejected by the court.

The Pursuers' solicitors were able to show that there had been actual compliance with the PAR in two out of the five cases, and accordingly these were continued to determine further procedure, while three actions were dismissed as incompetent. The full judgment is available here (online PDF).

Lenders new PAR arguments rejected in NRAM, Santander & Nationwide v. Doyle and 4 others