Appeal By (first) Theresa Stirling And (second) William Stirling Against Landmark Mortgages Limited (formerly Nram Plc And Northern Rock (asset Management) Plc)
| Jurisdiction | Scotland |
| Judge | Sheriff Principal R.A. Dunlop, Q.C.,Lord Bracadale,Lady Paton |
| Neutral Citation | [2016] CSIH 89 |
| Date | 06 December 2016 |
| Docket Number | XA19/16 |
| Court | Court of Session |
| Published date | 06 December 2016 |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2016] CSIH 89
XA19/16
Lady Paton
Lord Bracadale
Sheriff Principal Dunlop QC
OPINION OF THE COURT
delivered by LADY PATON
in the Appeal
by
(FIRST) THERESA STIRLING
Defender and appellant
(SECOND) WILLIAM STIRLING
Entitled resident and appellant
against
LANDMARK MORTGAGES LIMITED (FORMERLY NRAM PLC AND
NORTHERN ROCK (ASSET MANAGEMENT) PLC)
Pursuers and respondents
Defender and appellant: Party
Entitled resident and appellant: Party
Pursuers and respondents: McIlvride QC; TLT LLP
6 December 2016
Dispute concerning calling-up notice and attempted repossession of heritable property
[1] In 2002, the pursuers made a loan to the defender to assist in the purchase of heritable property at 233 Talla Road, Glasgow. The loan was to be secured over that property. Per incuriam, the standard security referred to number 223 instead of number 233. Despite the discrepancy between the title deed and the standard security, the Keeper of the Land Register recorded both, allocating a unique reference number to the heritable subjects. That unique number was correctly stated in the charge certificate.
[2] In 2011, the pursuers presented a summary application in Glasgow Sheriff Court seeking repossession of the subjects with averments that a calling-up notice dated 7 October 2011 had been served upon the defender and had expired without payment. The defender contested the application. After a proof, the sheriff granted decree. The defender appealed to the Sheriff Principal (C A L Scott). The appeal was refused. The defender then appealed to the Court of Session.
[3] At the appeal hearing on 22 October 2013, Mr McIlvride QC on behalf of the pursuers withdrew opposition to the appeal, on the basis inter alia that the calling-up procedure had not complied with current authorities. There was therefore no dispute that the appeal should be allowed. However the defender sought absolvitor from the summary application; the pursuers sought dismissal. Ultimately the court allowed the appeal, recalled the interlocutors of the sheriff and the sheriff principal, and dismissed the application, senior counsel having given the following undertaking:
“McIlvride for the pursuers and respondents stated and hereby states to the court that the pursuers and respondents undertake that they will not at any time in the future seek warrant to exercise any of the remedies competent to a heritable creditor in respect of the subjects owned by the defender and appellant on the ground that the notice of calling up of standard security served upon the defender and appellant on or about 7 October 2011 has expired without payment.”
The court issued a brief opinion (XA46/13), and found the pursuers liable in expenses.
[4] Thereafter in late 2013 and early 2014 the defender corresponded with the pursuers’ solicitors (TLT) about the expenses of that litigation.
[5] In early 2014 the pursuers commenced a fresh calling-up procedure by seeking to have a new calling-up notice dated 21 February 2014 served by recorded delivery upon the defender, and a Form BB (with copy calling-up notice) served upon her husband Mr Stirling as the entitled resident in terms of section 24C of the Conveyancing and Feudal Reform (Scotland) Act 1970, followed by delivery, on 5 March 2014, of a copy of the calling-up notice to the Extractor of the Court of Session. It is this calling-up procedure which is the subject of the present appeal.
[6] On 10 July 2014, the pursuers presented another summary application in Glasgow Sheriff Court, seeking rectification of the error in the description of the subjects in the standard security; declarator that the pursuers were entitled as heritable creditors to enter into possession of the subjects and to exercise remedies under the 1970 Act; and ejection of the occupants. The action was defended. On 26 and 27 February 2015 a proof was held before Sheriff S Reid. Submissions were made on 3 March 2015. Throughout the Proof, the defender represented herself. Mr Stirling had legal representation for a period, and then represented himself.
[7] Evidence for the pursuers comprised productions and oral evidence from their employee, Mr Rutherford. The defender did not give or lead evidence, although she made submissions. Mr Stirling for his part gave oral evidence and referred to productions. Several lines of defence were adopted, the main ones being (i) no jurisdiction; (ii) res judicata; and (iii) failure to serve the calling-up notice on either the defender or Mr Stirling.
[8] On 3 March 2015, having heard submissions, the sheriff granted decree for rectification, declarator as sought, ejection and expenses, and gave an ex tempore judgment. The defender appealed. Mr Stirling also appealed: see paragraph [4] of the sheriff principal’s judgment dated 14 January 2016 (page 143 of the appeal print) superseding paragraph [6] of the sheriff’s note dated 21 April 2015 (page 32 of the appeal print).
The sheriff provided a note dated 21 April 2015 (appeal print pages 31 to 74). The defender lodged a transcript of the evidence (appendix pages 107 to 305).
[9] At the appeal hearing before Sheriff Principal Lockhart on 1 December 2015, the pursuers’ solicitor sought to lodge the original certificate of execution of service of Form BB on the occupier, 233 Talla Road. As recorded in the sheriff principal’s note dated 1 December 2015 (pages 134 to 136 of the appeal print), the pursuer’s solicitor explained that:
“… the question of the service of Form BB had not been put in issue by the entitled resident or the defender in their answers as contained in the closed record (no 12 of process). There was nothing in the answers to challenge the effect on the calling-up notice in the event of no service of the Form BB. This matter had been put in issue now that the position of the entitled resident and the defender had been finally clarified in their written submissions of 26 November 2015. That issue now having been put in issue at appeal, the solicitor for the pursuers stated that she was instructed to tender at the bar the original certificate of execution of the Form BB on the entitled resident.”
The appeal was continued to 2 December 2016 to allow submissions on that matter.
[10] Thereafter, having heard submissions, the sheriff principal issued the following interlocutor (appeal print page 138):
“ … Grants motion made at the bar by the solicitor for the pursuers to lodge execution of service of the Form BB on the entitled resident and assigns it as no 24 of process; allows parties to question Thomas McEntegart, solicitor, Glasgow, in respect thereof …”
Evidence was then led from Mr McEntegart, a solicitor in TLT who had dealt with the service of Form BB. Further submissions were made. The appeal was then continued to 22 December 2015.
[11] On 22 December 2015 the sheriff principal allowed the defender to lodge additional productions and written arguments, and heard submissions. He then made avizandum. He subsequently issued a judgment dated 14 January 2016 (appeal print pages 140 to 162). At the outset, the sheriff principal made an additional finding-in-fact 24A, in the following terms:
“24A. No 24 of process is the certificate of execution of service of the Form BB on the entitled resident dated 21 February 2014”.
The sheriff principal’s judgment contains the following passages:
“ [2] …a previous action between the same parties was dismissed in the Court of Session on 22 October 2013. That case related to a calling-up notice dated 7 October 2011 and the undertaking given by the pursuers not to exercise any of the remedies competent to a heritable creditor in respect of the subjects at 233 Talla Road were based on that notice. The present action is based on a separate calling-up notice dated 21 February 2014. Accordingly there is no merit in the grounds of appeal of res judicata, abandonment, or lis alibi pendens …
[7] … the sheriff … made … findings in fact and law:
(4) The calling-up notice is deemed to have been served upon the defender on 22 February 2014, being the next day after the day of posting, by virtue of the section 19(8) of the Conveyancing and Feudal Reform (Scotland) Act 1970 …
(5) The Form BB (Notice to Occupier), and the copy of the calling-up-notice attached thereto, as prescribed by section 19A of the 1970 Act, is deemed to have been served upon the entitled resident on 22 February 2014, being the next day after the day of posting, by virtue of the sections 19(8) and 19A(2) of the 1970 Act …
(6) The defender has failed to comply with the calling-up notice.
(7) The defender is in default within the meaning of standard condition 9(1) in Schedule 3 to the 1970 Act.
(8) The defender has entered into default in terms of section 5(1) of Heritable Securities (Scotland) Act 1894 …
(9) In respect of the present proceedings, the pursuers have complied with the pre-action requirements prescribed by virtue of section 24A of the 1970 Act and section 5B of the 1984 Act …
[8] … with the two exceptions undernoted, I agree entirely with all the conclusions which the sheriff reached and for the reasons which he has set out.”
[12] Thereafter the sheriff principal dealt with the two exceptions as follows.
(i) The question of service on the defender: section 19(6): The sheriff principal found it necessary to adjust the reasoning in paragraph [96] (iii) of the sheriff’s note, leading to the sheriff’s finding-in-fact-and law (4). Thereafter the sheriff principal concluded that the pursuers had proved, on a balance of probabilities, that the calling-up notice had been served on the defender in accordance with section 19(6) of the 1970 Act.
(ii) The question of service on the entitled resident: section 19A: For the reasons given in his judgment, the sheriff principal, having taken into account all the evidence, including the further evidence led before him during the...
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