Property Repossessions

The decision of the Supreme Court in Royal Bank of Scotland plc v Wilson [2010] UK SC50 last autumn completely overturned the established practice of lenders in Scotland who have enforced of the standard securities over properties by commencing repossession proceedings. In accordance with the Supreme Court’s judgment, to properly enforce a Standard Security, the lenders must now ensure that they serve calling-up notices before the court proceedings for repossession of the property can be commenced.

As this was not standard practice prior to the decision in this case, the vast majority of the cases that were going through the court process as actions for repossession have had to be dropped by the lenders. This is because they were arguably incompetent, having been commenced incorrectly. This has led to many solicitors for the lenders moving the court to have the actions dismissed with no expenses due to or by either party. This then allows the lender to re-raise the action at a future date once the calling up notice has been properly served.

The motion by the lenders to have the action dismissed with no expenses due to or by either party is controversial. This is because there is some argument that in order to have the action dismissed, the defender should be awarded expenses. This is because the defender has technically succeeded in the case by having the action dropped. Expenses as a general rule follow success in court actions. There have also been rumours that lenders have had actions dismissed with no expenses due to or by either side but have then quietly added their legal fees on to the borrowers accounts using clause 12 of schedule 3 of the Conveyancing and Feudal Reform Act 1970 as amended. This practice, where identified, has been met with strong disapproval by the courts.

We have recently been successful in persuading solicitors for the lenders that the defender should receive expenses if they wished to have the action dismissed. We were confident that we would convince the court that we should be awarded expenses if the matter was to go to a hearing on this topic.

For further advice or assistance, please contact our court department on 01224-581581.

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