Scottish Sheriff Court Decisions

SHERIFFDOM OF GRAMPIAN HIGHLANDS AND ISLANDS AT BANFF

Judgement

Of

Sheriff Philip Mann

In Causa

NRAM otherwise known as NORTHERN ROCK (ASSET MANAGEMENT) PLC and previously known as NORTHERN ROCK PLC a company registered under the Companies Acts (Company No. 03273685) and having its Registered Office at Northern Rock House, Gosforth, Newcastle Upon Tyne

PURSUERS

Against

DAVID GEORGE YOUNGSON residing at 6 Addison Crescent, Banff, AB45 1BS

DEFENDER

Banff September 2012

The Sheriff, having resumed consideration of the cause, in absence grants decree as craved; Continues the cause to 9 October 2012 at 10:00am within the Sheriff Court House, Low Street, Banff as a hearing on expenses.

Sheriff Philip Mann

Note

1. Introduction

1.1 This is a summary application brought under section 24 of the Conveyancing and Feudal Reform (Scotland) Act 1970 as amended and section 5 of the Heritable Securities (Scotland) Act 1894 as amended. It raises what seems to me to be an important point of principle. It called before me on 11 September 2012 having been continued from 14 August 2012 when the pursuers were represented by local agents. Having considered the case of Gordon District Council v Acutt 1991 SLT. (Sh. Ct.) 78 I had had doubts as to the competency of granting the orders sought in the absence from the pursuers' pleadings of an averment that it was reasonable in the circumstances of the case to grant the orders. I had continued the case to allow the pursuers' principal agents to address me.

1.2 Section 24 of the 1970 Act as amended, so far as relevant for present purposes, is in the following terms:-

"24.- Application by creditor to court for remedies on default.

(1)....

(1A) Subsection (1) above does not apply in relation to a creditor in a standard security over land or a real right in land used to any extent for residential purposes.

(1B) A creditor in a standard security of that kind 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).

(1C) Before making an application under subsection (1B) above the creditor must comply with the pre-action requirements imposed by section 24A of this Act.

(1D) An application under subsection (1B) above is to be made by summary application (regardless of whether it includes a crave for any other remedy)

(2) ......

(3) Where the creditor applies to the court under subsection (1B) above, he shall:-

(a) serve on the debtor and (where the proprietor is not the debtor) on the proprietor a notice in conformity with Form E of Schedule 6 to this Act,

(b) serve on the occupier of the security subjects a notice in conformity with Form F of that Schedule, and

(c) give notice of the application to the local authority in whose area the security subjects are situated, unless the creditor is that local authority.

(4) Notices under subsection (3)(a) or (b) above shall be sent by recorded delivery letter addressed-

(a) in the case of a notice under subsection (3)(a), to the debtor or, as the case may be, the proprietor at his last known address,

(b) in the case of a notice under subsection (3)(b), to "The Occupier" at the security subjects.

(4A) Notice under subsection (3)(c) above shall be given in the form and manner prescribed under section 11(3) of the Homelessness etc. (Scotland) Act 2003 (asp 10)

(5) The court may, on an application under subsection (1B) above, continue the proceedings or make any other order that it thinks fit; but it may not grant the application unless it is satisfied that-

(a) the creditor has complied with subsection (1C) above; and

(b) it is reasonable in the circumstances of the case to do so.

(6) In considering an application under subsection (1B) above where the debtor appears or is represented, the court is to have regard in particular to the matters set out in subsection (7) below.

(7) Those matters are-

(a) the nature of and reasons for the default;

(b) the ability of the debtor to fulfil within a reasonable time the obligations under the standard security in respect of which the debtor is in default;

(c) any action taken by the creditor to assist the debtor to fulfil those obligations;

(d) where appropriate, participation by the debtor in a debt payment programme approved under Part 1 of the Debt Arrangement and Attachment (Scotland) Act 2002; and

(e) the ability of the debtor and any other person residing at the security subjects to secure reasonable alternative accommodation."

 

The provisions of the 1894 Act, so far as relating to this application, are in virtually identical terms.

1.3 On 11 September 2012 the pursuers were represented by their principal agent, Mr Fraser. The defender was not represented. He has never appeared or been represented.

2. The Pursuers' Submissions

2.1 Mr Fraser began by pointing out the terms of the forms E and F served in terms of the 1970 Act and the forms 1 and 2 served in terms of the 1894 Act. He submitted that these gave the defender sufficient notice that the question of reasonableness was a matter that he could raise with the court. He maintained that that question was not one of fact but was a matter of judicial opinion and thus a question of law. In that respect, he said, the case of Gordon District Council v Acutt, a case under the then equivalent of the Housing (Scotland) Act 2001, was wrongly decided because rule 2(1) of the Summary Cause Rules as then worded required that the statement of claim should contain only "a concise statement of the facts which form the ground of action."

2.2 Mr Fraser pointed out that Rule 2.4(1) of the Summary Applications Rules 1999 which governs this action provides that a summary application shall be commenced by initial writ in Form 1. Form 1 directs that in the condescendence the writ shall state in numbered paragraphs the facts which form the ground of action. Rule 3.4.3(1) of the 1999 Rules, which governs this specific type of action, provides that the writ shall contain an averment that the pre-action requirements have been complied with. Mr Fraser maintained that since stating grounds of reasonableness is not included in this direction it was not necessary to have such an averment in order to have a competent writ. He pointed out the guidance in MacPhail, Sheriff Court Practice, third edition, at paragraph 9.14 where the author quotes from the judgement of the Lord Justice Clerk (Wheatley) in the case of Mackenzie v West Lothian District Council, 1979 SC 433

"Our Scottish procedure pays observance, not lip service, to pleadings. A pursuer or petitioner must set out in his final pleadings averments which, if established, on the basis of the law on which he founds, warrants the remedy which he seeks"

In paragraph 9.16 MacPhail advises that a corollary to the rule that parties must plead only facts in their averments is that matters of law should not be pleaded there.

2.3 Mr Fraser accepted that it is necessary to aver sufficient facts but maintained that this had been done in this case by the incorporation, brevitatis causa, of the form 11C. Given the terms of subsection (6) of section 24 of the 1970 Act there was a two tier test of reasonableness, depending on whether or not the defender appeared or was represented. In a case where the defender appeared or was represented regard had to be had to the list of matters set out in subsection (7). Some of these matters could only be spoken to by the defender if he appeared and therefore, as in this case, could not be condescended upon by the pursuers in their initial writ.

3. Discussion and Decision

3.1 The purpose of pleadings is to give notice not only to the opponent but, importantly, also to the court, of various matters. Firstly, what it is that the party seeks by way of the craves. Secondly, what facts the party is willing to assert, and prove if necessary, by way of the condescendence. And thirdly, what legal propositions the party relies upon, by way of the pleas in law, to justify the grant of decree in terms of the craves in the event of the facts being proved or being unchallenged.

3.2 The pleas in law should direct the court to the facts that need to be proved in order to justify the grant of decree. The court should be able to see in the condescendence an assertion of those facts. MacPhail at paragraph 9.48 puts it thus:-

"Each plea-in-law must be supported by averments of all the facts which the law says are necessary to make the plea-in-law successful".

3.3 When I look at section 24 of the 1970 Act, as amended, I can see that the pursuers may only raise proceedings if the defender is in default, that before raising proceedings the pursuers must comply with the pre-action requirements, that upon raising the proceedings the pursuers must send notices to the debtor and proprietor and occupier of the subjects and to the local authority and that, the proceedings having been raised, the court may only grant the orders sought if it is satisfied that it is reasonable in the circumstances of the case to do so.

3.4 Service of the relevant forms in terms of section 24(3) of the Act is a material step that must be shown to have been complied with before the court may grant decree. But it relates to the giving of notice, not to the grounds of action, and in my view it does not require to be condescended upon any more than service of the writ requires to be condescended upon.

3.5 The other matters set out in section 24 of the Act form part of the grounds of action. As such, they are all material matters which, in my view, the pursuers should be prepared to assert if they are to be entitled to raise and maintain proceedings and should be prepared and able to prove, if necessary, if they are to be entitled to decree. The 1894 Act is materially to the same effect and so these comments apply equally to it.

3.6 The question whether it is reasonable in the circumstances of the case to grant the orders sought is a matter of fact. I do not accept Mr Fraser's submission that it is a matter law. It may be a fact that has to be inferred from other facts but it remains a fact nonetheless. At best for the pursuers it is a question of mixed fact and law but I am inclined to think that it is purely a question of fact that has to be determined in the particular circumstances of the case at hand.

3.7 Mr Fraser asserted that the absence of any mention of the reasonableness requirement in rule 3.4.3(1) of the 1999 Rules meant that it was not necessary to make averment on that matter. Rule 3.4.3(1) does not, either, mention the question of default but I cannot conceive that a court would grant decree in a case of this kind if there were no averment that the defender is in default. I do not readily see why it should be any different if there is no averment that it is reasonable to grant decree in the circumstances of the case.

3.8 My main concern, initially, had been that if there was no averment anent reasonableness then the defender would not necessarily know that that question was in issue and might decide not to defend the action in ignorance of his right to raise that question with the court. Mr Fraser quite properly pointed out that the question of reasonableness is raised and highlighted to the defender and other relevant persons in the forms E and F served in terms of the 1970 Act and in the forms 1 and 2 served in terms of the 1894 Act. On this matter all four forms are in identical terms:-

"For example, you might want to argue that the pre-action requirements have not been complied with or that it would not be reasonable for the sheriff to grant the application".

I readily accept that that answers my concern in relation to notice. It does not completely allay my concern as to the competency or appropriateness of granting decree in the absence of the averment. There are three points here. Firstly, the wording of the forms that I have quoted confirms that the question of reasonableness is not just something that the court takes a view on of its own accord. It is something that has to be argued by the parties. If the pursuers have to argue that it is reasonable to grant the orders, as they must even if the action is undefended, it seems to me to follow that they should have an averment to that effect. Secondly, mere service of the forms does not cure the absence of the averment because the pursuers have not incorporated the terms of the forms into the condescendence. Thirdly, even if the pursuers had incorporated the terms of the forms, it is one thing to offer to prove that the defender has been advised that he may raise the question of reasonableness with the court and quite another to assert and offer to prove that it is, in fact, reasonable to grant the orders sought.

3.9 Gordon District Council v Acutt is a case involving a secure local authority tenancy brought under different legislation whose provisions relating to notice are not identical to the provisions of the 1894 and 1970 Acts. It can thus be distinguished from this case. In the end of the day the question for me is whether or not the absence of an averment anent reasonableness is so material in the circumstances of this case that I would be justified in refusing to grant decree in absence. Whilst I still have reservations in the matter I can see no real prejudice to the defender in granting decree, given that he has been given ample notice, by way of the form 11C, of the facts relied upon by the pursuers to establish the question of reasonableness; that he has been advised that he may put the question of reasonableness in issue before the court; and that he has chosen not to defend the action. I also observe that in this case the property appears to have been vacated by the defender. There is also the point that the court is entitled to, and should, insist that it be addressed, as I have been in this case, on the question of reasonableness even in an undefended action and whatever the state of the pursuers' pleadings.

3.10 Accordingly, with some hesitation and in the absence of any contradictor or challenge from a party, I have granted decree. The matter could be put beyond doubt in the future by pursuers in this kind of action adopting the simple expedient of adding a brief averment. That is a matter for them and, of course, each case will depend on its own circumstances.

3.11 I have continued the cause to consider the matter of expenses.