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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Philip
Lord Kingarth
Lord Eassie
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[2007] CSIH 46
XA134/05
OPINION OF THE COURT
delivered by LORD PHILIP
in
APPEAL
From the Sheriffdom of Grampian
Highland and Islands at Peterhead
in the cause
THE GOVERNOR & COMPANY
OF THE BANK OF SCOTLAND
Pursuers and Appellants;
against
ELEANOR RITCHIE TAIT or
FORMAN (A.P.)
Defender and Respondent:
_______
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Act: Moynihan, Q.C.; Anderson Strathern
Alt: Clive; A & W.M. Urquhart
6 June 2007
[1] This is an
appeal against an interlocutor of the sheriff at Peterhead pronounced on 8
August 2005
after a partly heard proof, dismissing the action at the instance of the
pursuers and appellants against the defender and respondent. In the action, which was raised as an
ordinary action, the pursuers seek: (i) declarator that they are entitled to sell
heritable subjects at 17 Derbyhall Avenue, Fraserburgh occupied by the defender
in respect of the defender's default in payment of instalments, interest and
other monies agreed to be paid by her to the pursuers in terms of a standard
security, details of which we set out below;
(ii) decree of removing; and (iii)
failing removal, warrant for ejection.
[2] The averments
on which the pursuers proceeded to proof were in the following terms. The defender granted a standard security in
favour of the pursuers registered on 23 September 1983 over her house at 17 Derbyhall Avenue, Fraserburgh, in security of all sums
due and that might become due to the pursuers by her. On 11 September 1988 the pursuers served
a calling-up notice on the defender in terms of section 19 of the
Conveyancing and Feudal Reform (Scotland) Act 1970 ("the Act") requiring her to
make payment of £265,237.80 plus interest of £1,504.59, said to be owing to
them by the defender as at 10 August 1998.
The defender made no payment during the two month period of notice. She was, it was averred, accordingly in
default in terms of standard condition 9(1)(a) of Schedule 3 to the Act. She had been called on to quit the subjects
but had refused to do so. The pursuers' pled
that they were entitled to the decrees sought because the defender was in
default in terms of standard condition 9, the statutory period of calling-up
having expired.
[3] In her defences
the defender admitted that she had granted the standard security, but averred that
she understood that the principal sum referred to in the calling-up notice
represented sums allegedly due to the pursuers by a company, Norlea
Developments Limited (NDL). NDL was not
however in fact indebted to the pursuers in those sums or at all. During 1986 and 1987 the pursuers had
transferred, without the authorisation or knowledge of NDL or their directors,
substantial sums from NDL's account to the account of a firm named Angus &
Forman in order to reduce that firm's indebtedness to the bank. That firm, of which the defender's husband
was a partner, ceased to trade in 1986. The
defender averred further, that the calling-up notice was inept, and pled inter alia that it should be reduced ope exceptionis.
[4] It is
convenient to set out at this point the provisions of the Conveyancing and
Feudal Reform (Scotland) Act 1970 governing standard
securities which have application in this case.
[5] Section 11(2)
of the Act provides:
"(2) Subject
to the provisions of this Part of this Act, the conditions set out in Schedule
3 to this Act, ... (which conditions are hereinafter in this Act referred to as
'the standard conditions'), shall regulate every standard security."
Standard conditions 9 and 10 of Schedule 3 (so far as
relevant) are in the following terms:
"9.- Default.
(1) The
debtor shall be held to be in default in any of the following circumstances,
that is to say-
(a) where
a calling-up notice in respect of the security has been served and has not been
complied with;
(b) where
there has been a failure to comply with any other requirement arising out of
the security;
(c) where
the proprietor of the security subjects has become insolvent.
...
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."
Sections 19 to 24, which are contained in Part II of the Act,
provide (so far as relevant):
"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.
...
(11) A
calling-up notice shall cease to have effect for the purpose of a sale in the
exercise of any power conferred by the security on the expiration of a period
of five years, which period shall run-
(a) in
the case where the subjects of the security, or any part thereof, have not been
offered for or exposed to sale, from the date of the notice,
(b) in
the case where there has been such an offer or exposure, from the date of the
last offer or exposure.
...
20.- Exercise
of rights of creditor on default of debtor in complying with a calling-up
notice.
(1) Where
the debtor in a standard security is in default within the meaning of standard
condition 9(1)(a), the creditor may exercise such of his rights under the
security as he may consider appropriate and any such right shall be in addition
to and not in derogation from any other remedy arising from the contract to
which the security relates or from any right conferred by any enactment or by
any rule of law on the creditor in a heritable security.
(2) Where
the debtor is in default as aforesaid, the creditor shall have the right to
sell the security subjects, or any part thereof, in accordance with the
provisions of this Part of this Act.
(3) A
creditor in a standard security who is in lawful possession of the security
subjects may let the security subjects, or any part thereof, for any period not
exceeding seven years or may make application to the court for warrant to let
those subjects, or any part thereof, for a period exceeding seven years ...
(5) There
shall be deemed to be assigned to a creditor who is in lawful possession of the
security subjects all rights and obligations of the proprietor relating to-
(a) leases,
or any permission or right of occupancy, granted in respect of those subjects
or any part thereof, and
(b) the
management and maintenance of the subjects and the effecting of any
reconstruction, alteration or improvement reasonably required for the purpose
of maintaining the market value of the subjects.
21.- Notice
of default.
(1) Where
the debtor in a standard security is in default within the meaning of standard
condition 9(1)(b), and the default is remediable, the creditor may, without
prejudice to any other powers he may have by virtue of this Act or otherwise,
proceed in accordance with the provisions of this section to call on the debtor
and on the proprietor, where he is not the debtor, to purge the default.
(2) For
the aforesaid purpose the creditor may serve on the debtor and, as the case may
be, on the proprietor a notice in conformity with Form B of Schedule 6 to this
Act (hereinafter in this Act referred to as a 'notice of default') which shall
be served in the like manner and with the like requirements as to proof of
service as a calling-up notice.
...
(4) Notwithstanding
the failure to comply with any requirement contained in the notice, a notice of
default shall cease to be authority for the exercise of the rights mentioned in
section 23(2) of this Act on the expiration of a period of five years from the
date of the notice.
22.- Objections
to notice of default.
(1) Where
a person on whom a notice of default has been served considers himself
aggrieved by any requirement of that notice he may, within a period of fourteen
days of the service of the notice, object to the notice by way of application
to the court; and the applicant shall, not later than the lodging of that
application, serve a copy of his application on the creditor, and on any other
party on whom the notice has been served by the creditor.
(2) On
any such application the court, after hearing the parties and making such
inquiry as it may think fit, may order the notice appealed against to be set
aside, in whole or in part, or otherwise to be varied, or to be upheld.
...
23.- Rights
and duties of parties after service of notice of default to which objection is
not taken, or where the notice is not set aside.
(1) Where
a person does not object to a notice of default in accordance with the
provisions of the last foregoing section, or where he has so objected and the
notice has been upheld or varied under that section, it shall be his duty to
comply with any requirement, due to be performed or fulfilled by him, contained
in the notice or, as the case may be, in the notice as so varied.
(2) Subject
to the provisions of section 21(4) of this Act, where a person fails to comply
as aforesaid, the creditor, subject to the next following subsection, may
proceed to exercise such of his rights on default under standard condition
10(2), (6) and (7) as he may consider appropriate.
...
24.- Application
by creditor to court for remedies on default.
(1) Without
prejudice to his proceeding by way of notice of default in respect of a default
within the meaning of standard condition 9(1)(b), a creditor in a standard
security, where the debtor is in default within the meaning of that standard
condition or standard condition 9(1)(c), may apply to the court for warrant to
exercise any of the remedies which he is entitled to exercise on a default
within the meaning of standard condition 9(1)(a) ... ".
[6] The case went
to proof before answer in Peterhead Sheriff Court on 9 May 2005.
The sheriff records in the note to his interlocutor that the question at
issue in the proof appeared to be whether NDL was in debt to the pursuers. It also appears from his note that the
parties understood that the pursuers' claim proceeded on the basis that by
virtue of a deed of variation in 1988 the standard security granted by the
defender secured all sums due by NDL to the pursuers, notwithstanding that no
reference was made to the deed of variation in the pleadings. On the second day of the proof, while the
first witness for the pursuers was still giving evidence, counsel for the
defender made a submission to the effect that, in terms of section 19(11) of
the Act, the calling-up notice of 11 September 1998 had ceased to have effect
for the purpose of the sale of the security subjects under the standard security
on the expiry of five years from the date of the notice. In those circumstances the action was no
longer competent. A minute of amendment for
the defender introducing a plea to the competency based on the provisions of
section 19(11) was allowed to be received.
The sheriff allowed the pursuers to lodge answers within 28 days and
appointed a continued diet of proof before answer for 29 June
2005. No further evidence was led in the proof.
[7] In the answers
subsequently lodged on their behalf, the pursuers sought to introduce two new
craves; (i) for declarator that the defender was in
default within the meaning of standard condition 9(1)(b) of Schedule 3 in
respect of her failure to pay on demand all sums due to the pursuers following
upon the "demand letter" dated 11 September 1998 sent to her in terms of the
standard security; (ii) for warrant in terms of section 24 of the Act
to enter into possession of the subjects and to exercise all powers competent
to a creditor in terms of standard condition 10. The pursuers also proposed an additional
article of condescendence in which they averred that the defender was in
default within the meaning of standard condition 9(1)(b) by virtue of her failure
to pay on demand to the pursuers all sums due to them following on the "demand
letter" of 11 September 1998.
[8] At the
continued diet on 29 June 2006 counsel for the defender moved that
the record be amended in terms of his minute of amendment, but not in terms of
the pursuers' answers, and moved for dismissal of the action as
incompetent. Counsel for the pursuers
moved that any amendment of the record should include his answers and that the
proof before answer should resume. In
doing so he expressly conceded that the action as then framed could not succeed
because of the effect of section 19(11) of the Act.
[9] The sheriff,
relying on a passage at paragraph 10.04 of Macphail
on Sheriff Court Practice, (2nd Edition) held that after the expiry of five
years from the date of the calling-up notice the remedy sought by the pursuers
in the craves of the initial writ was one which the court had no power to
grant. In that situation there was no
"existing cause" which was capable of competent amendment. The action had become a nullity and could not
be amended into validity. An action
which was fundamentally incompetent from the start could not be made competent
by amendment. The same applied to the
present action which had become incompetent by virtue of the operation of section
19(11).
[10] The sheriff
went on to hold that the action, even if amended in terms of the pursuers' answers
which specifically alleged that the defender's own failure to pay the debt
amounted to default by her, would be irrelevant because the pursuers had failed
to aver any basis for liability on the part of the defender for sums due by
NDL. It was not averred that she had a
personal obligation to pay the sums due by NDL or that she was in breach of any
personal bond. The personal bond referred
to in the standard security obliged her only to pay sums that might become due
to the pursuers by her. In the absence
of the necessary averments the case based on standard condition 9(1)(b) could
not be relevant.
[11] Finally, the
sheriff indicated that, had he not dismissed the action on grounds of
competency and relevancy, he would have exercised his discretion in favour of
the pursuers by allowing amendment and allowing the proof before answer to
continue.
[12] Before this
court counsel for the pursuers and appellants intimated that he wished to
withdraw the concession made on behalf of the pursuers at the proof before answer. He no longer accepted that, in the light of
the terms of section 19(11) of the Act, the action, as then framed, could not
succeed. Contrary to the sheriff's
conclusion, the action as framed at the time of the proof before answer was
competent and could have proceeded as it stood.
Where a calling-up notice was not complied with the creditor had a range
of remedies of which the power of sale was only one. That was the only remedy which was limited to
a five year period. Accordingly, craves
2 and 3, for removal, which failing, ejection, were not time-barred and could
be proceeded with.
[13] Counsel also tendered
a fresh minute of amendment which sought to amend crave 1, for declarator of
entitlement to sell, by narrating that the default by the defender took the
form of failure to comply with the requirements arising out of the standard
security, rather than failure to make payment of monies due by the
defender. The minute also sought to
amend crave 1 by adding reference to the deed of variation already referred to,
dated 29 January and 18 July 1988, which varied the terms of the standard
security, and to add a new crave seeking warrant to enter into possession and
to exercise all powers competent to the pursuers as creditor in terms of
standard condition 10, including power to sell the subjects under the power of
sale. The minute sought to add averments
to the following effect. The deed of
variation of 1988 extended the security to cover all sums due to the pursuers
by NDL in terms of a personal bond granted by NDL dated 7
February 1986. NDL had gone into liquidation. The calling-up notice of 11
September 1998 had been served on NDL as well as on the defender. The sums outstanding were due by NDL. NDL had failed to discharge the debt within
the two month period, and were accordingly in default in terms of standard
condition 9(1)(a) of the Act. It was a
requirement arising out of the security that, in the event of default, the
defender as proprietor of the security subjects would give the pursuers vacant
possession of the security subjects to enable them to be sold, or, in any
event, would give vacant possession within the five year period specified in
section 19(11) of the Act. The defender,
having refused to give vacant possession and to permit a sale for more than the
five year period, as a consequence of disputing the debt, had failed to comply
with a requirement within the meaning of standard condition 9(1)(b) and was
accordingly in default within the meaning of that condition. The pursuers were entitled to apply for a
warrant to exercise their remedies under section 24(1) of the Act. Lastly, the minute sought to amend the
pleas-in-law in support of craves 1, 2 and 3 so that decrees were sought on the
basis of the default of NDL rather than that of the defender, and a fourth plea
in law was added to the effect that, NDL being in default in terms of standard
condition 9(1)(b), the pursuers were entitled to a warrant in terms of section
24(1) to exercise any of the remedies to which they were entitled on default
within the meaning of standard condition 9(1)(a), including sale of the
security subjects.
[14] Counsel for
the pursuers argued that the minute of amendment which he now tendered had the
effect of rendering the action relevant, and that this court should exercise
its discretion in favour of allowing the amendment, having regard to the
provisions of the Mortgage Rights (Scotland) Act 2001 ("the 2001 Act") which,
while they did not apply to the present action in its unamended form, would
apply to any fresh action which might be raised in its place, and would also
apply if the Minute of Amendment introducing a crave for warrant under
section 24(1) were to be allowed. The
removal of the power of sale meant that the only remedy open to the pursuers as
security holders in the action as presently framed was recovery of possession,
along with which went the power to let the subjects and to receive the
rents. If, after entering into possession,
the pursuers wished to sell the subjects they would require either to serve a
further calling-up notice or to commence proceedings under section 24(1) for
warrant to sell. In either case the 2001
Act would be engaged and the defender would be protected.
[15] Counsel
observed that a day and more of proof had already been heard on the question of
whether or not a debt existed. The
action should be allowed to proceed as it would serve the practical purpose of
resolving that question. If the dispute
were to be resolved in the pursuers' favour, they would obtain vacant
possession in terms of craves 2 and 3.
Because it would not make sense to have two actions relating to the same
subject-matter, the pursuers sought to add a crave seeking warrant to sell in
the new crave 4.
[16] It is
important to record that counsel expressly indicated that he would not, apparently
for a number of pragmatic reasons which were not fully explored, seek to move
the minute of amendment if the view was taken
(for whatever reason) that the action in its unamended form could not
competently be proceeded with by reason of the application of
section 19(11). In such
circumstances, it was indicated that the pursuers would seek instead to take
new action, whether by service of a further calling-up notice or otherwise, to
enforce the security. The consequence
was, counsel submitted, that if the court took the view, as he submitted it
should, that the action could competently proceed even in its unamended form, there
were two alternatives. The court could either refuse the minute of amendment
and allow the action to proceed in its original form, or allow the minute of amendment,
thus enabling the sheriff to deal with all the issues between the parties,
including those arising from the 2001 Act.
[17] Counsel
explained that NDL was a family company which, according to the pursuers, was
indebted to them to the extent of between £200,000 and £265,000. The defender and her son Michael Forman had
both granted standard securities in favour of the pursuers in security of NDL's
obligations. A calling-up notice had
been served in September 1998 on Michael Foreman as well as on the
defender. The action had been raised in
March 1999. Despite the raising of the
action, the pursuers had lost their power to sell after the expiry of five
years because they had not sought a warrant to sell in the action. If they had sought such a warrant the expiry
of the five year period would not have prevented the court from granting
it. A warrant was a link in title which would
have given the creditor a title to sell independently of the title arising from
the unsatisfied calling-up notice. The
calling-up notice continued to constitute authority for recovery of possession.
[18] It had been
established in Bank of Scotland v Millward 1989 S.L.T. 901 that a
calling-up notice and a notice of default could be used in identical situations. Accordingly, counsel submitted, a default
under standard condition 9(1)(b), must include failure to comply with a
calling-up notice. The defender had
refused to give possession of the subjects.
That was a default in terms of standard condition 9(1)(b).
[19] In response to
these submissions counsel for the defender moved us to refuse to allow the new
minute of amendment for the pursuer to be received, to refuse the appeal and to
affirm the sheriff's interlocutor dismissing the action. He argued that craves 2 and 3 were ancillary
to crave 1. The pursuers' position had
always been that they wished to sell the subjects. The nature of the default now relied on by
the pursuers for their contention that in its current form the action was
competent and could proceed was the failure of the defender to give possession
of the subjects to facilitate their sale.
There was no obligation on the defender to give possession voluntarily
for that purpose. To allow the pursuers
to proceed with the unamended action, as they wished to do, would be oppressive
and would achieve no purpose. They did
not wish to let the property which was the only practical remedy open to them,
the calling up notice being no longer effective for the purposes of a sale.
[20] Counsel for
the defender argued that there was a distinction between failure to comply with
a calling-up notice and other forms of default.
A calling-up notice was only appropriate where the creditor wished
repayment of the debt. The action of the
creditor in calling up the debt gave rise to the default. On failure to comply with a calling-up notice
the various remedies provided for by standard condition 10, including the power
of sale, became operative as a matter of law.
A notice of default, on the other hand, was appropriate in relation to
all other forms of default. When a
notice of default had been served the creditor had no automatic right to put
his remedies into effect. He required to
apply to the court for permission to do so.
Cedar Holdings v Iyyaz 1999 SCLR 236, per Sheriff
Principal Caplan at page 238. As the
pleadings stood there was no suggestion of any form of default other than a failure
to comply with a calling-up notice in terms of standard condition 9(1)(a). By the new minute of amendment the pursuers sought
to achieve a power of sale by contending that the defender was in default under
section 9(1)(b) because she had failed to vacate the subjects.
[21] Counsel went
on to submit that the appeal raised two new questions, firstly, whether the
action could proceed as an ordinary action without crave 1, and secondly,
whether the defender could be in default by failing to vacate the
subjects. In relation to the first
question, an action designed solely to achieve eviction of the proprietor or
recovery of possession required to be raised as a summary cause in terms of
section 35(1)(c) of the Sheriff Court (Scotland) Act 1971. The action had been competently raised as an
ordinary action because it included a crave for declarator. Counsel, however, accepted that the sheriff
could transfer the action with the remaining craves to the summary cause
roll.
[22] In relation to
the second question, whether the defender could be in default by failing to
vacate the subjects, there was a distinction between recovering vacant
possession in the sense of ejecting the occupant, and the concept of entering
into possession as referred to in standard condition 10. The latter was primarily for the purpose of
obtaining the rents. The pursuers now
sought to achieve the former in order to sell the subjects. They could not rely on section 5 of the Heritable
Securities (Scotland) Act 1894 because the proprietor had no obligation to make
payment of principal or interest, see Halliday's
Conveyancing Law and Practice, 2nd edition, vol. 2, paragraph 48.14.
[23] Standard
condition 9(1)(b) applied where standard condition 9(1)(a) did not and vice
versa. The sheriff had found that by seeking,
in their answers, to amend to aver that the defender was in default in terms of
standard condition 9(1)(b) by failing to vacate the subjects, the pursuers were
attempting to re-label a default which was truly a default in terms of standard
condition 9(1)(a), a failure to comply with the calling-up notice.
[24] The existing
action was irrelevant because it was drafted on the basis that the defender was
the debtor of the pursuer. Further, the minute
of amendment was irrelevant for two reasons.
In the first place there was no obligation on the defender to give
vacant possession following upon service of the calling-up notice and the
failure of the debtor to repay the debt.
Secondly, it represented an attempt to re-label non-compliance with a
calling-up notice as a default in terms of standard condition 9(1)(b). Finally, counsel for the defenders invited
the court in the exercise of its discretion to refuse to allow the minute of amendment
now tendered.
[25] Given the
position clearly adopted at the outset by counsel for the pursuers in relation
to the limited circumstances in which he would move the minute of amendment, we
consider this appeal can be disposed of relatively shortly.
[26] As we have
already recorded, the sheriff, having allowed the record to be amended in terms
of the defender's minute of amendment adding a plea to the competency of the
action, refused to allow amendment of the pleadings for the pursuers in terms
of the pursuers' answers, sustained the defender's plea to the competency and
dismissed the action. He refused to
allow amendment in terms of the pursuers' answers because in his view, as a
result of the provisions of section 19(11) of the Act, the action had become a
nullity and so could not be amended.
Following the approach suggested by the learned author of Macphail on Sheriff Court Practice he
found that there was no "existing cause" because the action had become a nullity,
and so the remedy sought was one which the court had no power to grant.
[27] In the passage
in Macphail the learned author
suggested examples of circumstances in which it might be said that there was no
existing cause. One of his examples was
where the remedy sought was one which the court had no power to grant. The sheriff took the view that on the expiry
of five years from the date of the calling-up notice this case fell into that
category. We do not agree. The learned author was referring to cases in
which the court could not in any circumstances have the power to grant the
remedy sought. In the present case there
is no doubt that the court had the power to grant the remedy sought in crave 1
when the action was raised. In our view
the operation of section 19(11) did not render the action a nullity on the
expiry of the quinquennium. It simply
put a statutory bar on the pursuers' further ability to use only the calling-up
notice as a link, or warrant, in the exercise of their power of sale. In that situation, and in the absence of a
crave for judicial warrant for sale, it would be appropriate for the court to
refuse the declarator sought in crave 1 on the ground that the pursuers were no
longer entitled to sell the subjects by virtue only of the operation of a
calling up notice under section 19(1).
We therefore consider that the sheriff was wrong to hold that the action
was a nullity.
[28] The question
of whether craves 2 and 3 could only be proceeded with by way of summary
cause (on which we reserve our opinion) does not appear to us to be a matter of
significance, since both counsel agreed that the sheriff could, if so
persuaded, readily transmit the cause to the appropriate roll.
[29] A real
question still, in our view, remains as to whether the pursuers can competently
proceed with the action in its unamended form. Counsel for the pursuers' argument was that,
having withdrawn the concession, he was entitled to proceed with craves 2 and 3
because only crave 1 was affected by section 19(11). It is of course true that the other remedies
open to the pursuers in terms of standard condition 10 were not cut off by
section 19(11) and, accordingly, the pursuers may enter into possession of the
security subjects, receive or recover the rents, grant leases, and manage and
maintain the subjects, all with a view to obtaining payment of the debt from the
rents, if any. The pursuers, however, do
not indicate in their unamended pleadings that they wish to gain vacant
possession for any of the above purposes.
The whole action is directed at enabling them to sell the subjects and
there is no indication in the averments, nor was there in submission, that the
decrees of removal and ejection are sought for any purpose other than to
facilitate the sale. Nor did the pursuers
in their answers to the defender's minute of amendment seek to amend their
pleadings to indicate that craves 2 and 3 were designed to enable them to
achieve the other remedies to which we have referred. In these circumstances we consider that counsel
for the defender was justified in arguing that craves 2 and 3 were always
intended to be, and remain, ancillary to crave 1 and, since their purpose was
to enable the pursuers to sell the subjects by virtue of the right said to
arise on non compliance with the calling-up notice, could not competently be
sought after the expiry of five years from the date of the calling-up notice. Putting it another way, the pursuers could not
be said, in the absence of crave 1, to have any interest to seek craves 2
and 3 alone. We therefore take the view
that the pursuers' argument that the action could proceed unamended is
ill-founded.
[30] In these
circumstances, given the clear position of counsel for the pursuers, the appeal
must be refused. It is therefore unnecessary
(and perhaps inappropriate standing the prospect of further proceedings, which
may include similar averments) for this court to say anything on the questions
raised as to the basic relevance of the averments in the proposed minute of amendment,
in particular as to whether the defender could, in the circumstances averred,
relevantly be said to have been in default.
On that issue we reserve our opinion.
[31] We can,
however, indicate that we would not in any event, for other reasons, have been
inclined to exercise our discretion in favour of allowing the present action to
be amended in the way sought. The action
has been in court for a very substantial period with numerous exercises in
adjusting or amending the pleadings and this is the second attempt since the
commencement of the proof before answer to amend pleadings which have not been
adequate from the outset. It is accepted
by counsel for the pursuers that the first amendment proposed (by way of
answers to the minute of amendment for the defender) could not be
supported. More importantly, there are,
it seems, significant new issues arising under the Mortgage Rights (Scotland)
Act 2001 which would require to be addressed if the amendment were to be
allowed. These issues could potentially
render of little use the limited evidence already given, and are best addressed
in any fresh action which the pursuers may seek to bring.
