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Royal Bank of Scotland v Jamieson: Another Brick in the Protective Framework for Residential Debtors in Enforcement of Standard Securities

Document Cited authorities 6 Cited in Related
Vincent
Date01 September 2020
Published date01 September 2020
DOI10.3366/elr.2020.0654
Pages405-410
INTRODUCTION

The decision of the Sheriff Appeal Court in Royal Bank of Scotland Plc v Jamieson1 adds to the growing case law on enforcement of a standard security by way of a calling-up notice under section 19 of the Conveyancing and Feudal Reform (Scotland) Act 1970 (“the 1970 Act”).2 The case required interpretation of section 19(6), relating to the circumstances in which a heritable creditor is entitled to serve notice on the Extractor of the Court of Session rather than the debtor. Valid service was required for a competent warrant to be issued under section 24 of the 1970 Act, allowing the creditor to enforce the standard security. On an inflexible interpretation of the subsection, the court held that service on the Extractor was invalid in the circumstances of the case. Therefore, the creditor's summary application for warrant to exercise power of sale in respect of the security subjects was dismissed.

The decision can be framed in the context of the recent legislative trend toward protection for (particularly residential) debtors. Although the decision may produce difficulties in practice for creditors seeking to enforce standard securities, the outcome is justified by the policy objective of preventing debtors from unjustly being deprived of their homes.3

 CALLING-UP STANDARD SECURITIES UNDER THE <a href="https://vlex.co.uk/vid/conveyancing-and-feudal-reform-808257949">CONVEYANCING AND FEUDAL REFORM (SCOTLAND) ACT 1970</a>

Where a debtor under a standard security defaults on repayment of the secured loan, a creditor who wishes to enforce repayment by exercising their remedies under the security must first call up the security using the section 19 procedure.4 In short, this involves service of a calling-up notice on the debtor demanding repayment of the debt in full within two months.5 On expiry of this period, if the debt has not been repaid, creditors may seek to exercise their power of sale.6 If the security is held over land used to any extent for residential purposes, this power can only be exercised by warrant of the court under section 24.7

Service of the calling-up notice is regulated by section 19(6) of the 1970 Act. Under this provision, the calling-up notice must be served either by personal or recorded delivery or registered post to the person upon whom it is wished to be served (the debtor). However, sometimes delivery to the debtor is not possible, so section 19(6) provides for service to be made instead on the Extractor of the Court of Session in enumerated circumstances. These are where the address of the debtor is unknown, where it is unknown whether the debtor is alive, or “if the packet containing a calling-up notice is returned to the creditor with an intimation that it could not be delivered”.8 If any of these criteria are fulfilled, service may be made on the Extractor and this service will be treated as valid, allowing competent application under section 24.

 FACTS

Ross Jamieson granted a standard security over his home to the Royal Bank of Scotland Plc (“RBS”) in 2004. After he fell into arrears in relation to repayments of the debt secured by the standard security, RBS sought to enforce it. They did so by submitting applications to the Sheriff Court on multiple occasions under section 24.9 The case concerned the most recent of these.

RBS had sought to serve a calling-up notice on Jamieson by recorded delivery service. However, delivery had failed. RBS had been made aware of this by the “Track and Trace” portal on the Royal Mail website stating that there had been “no answer” upon attempt of delivery.10 They submitted that this method of ascertaining delivery was “common, modern practice”.11 RBS had, on this basis, proceeded to effect service on the Extractor instead, which they argued they were entitled to do.12

Jamieson submitted that RBS was not entitled to serve on the Extractor since none of the requirements justifying this under section 19(6) were fulfilled.13 The case accordingly turned on whether the requirements allowing service on the Extractor had...

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