Dilligence Flashcards
What are the 4 ordinary delligences
Attachment
Atrestments
Inhibition
Adjudication
Stair 4.47.1 def of dilligence
Decreets would be of no effect but as bees withiut stings if the law did not fix the kinds and forms of execution thereof
When were money attachments introduced
Part 8 of the 2007 act
was also DUE to abolished adjusdications and replaced with land attachments but has not been done
What does diligence do gen
It allows creditors to freeze or size
Individual assets
On first come first served basis
In the bankcrupcy process what is the proceedure
Procededure is for all cred
All assets are taken over
Distribution is on basis of equality
In bankcrupcy process debtors affairs are wound up by a trustee/liquadator. NO SUCH PERSON PERSON EXISTS IN DILLIGENCENCE
Can dilligence be followed by sequestration/ liquidation
YrsYes and NOTE ONCE BANKRUPTCY BEGINS DIL CEASES TO BE COMPETENT
Who carries out dil
Court officers: sheriff officer or messenger at arms
2007 act s57 – judicial officer to replace sherrif ect but never implemented ed
effect and priority of dil
except inhibition dil gives cred real right of security.
debtor date inhibition = reg
attachment = sherrif officer going to property identifying ceased assets
ARRESTMENT = debt funds = depends on the real right not back dated to the date it was not the date the items were ceased it was the date it was aimed at.
carried out- on assets owned by the debtor
erkine 3.6.1
it is the priority of the dil used upon the debt which alone the cred to a prefernce
mitchells v fergusson
PROPERTY LAW delivered conveyed 2 bros mitchels adjudication is carried out before conveyancing diligence will take priority
burnetts trustee v grainger
ptr coulter rev grainger church of scot, going to live in burnett. Graingers disp was lost and not REG. BURNETT went BUST. burnett still neg. notice of title sent to grainger formal conveyancing title against property
s35-36 debt arrangement and attachment
attachment
s. 191-192 BAD act
money attachment
are there real rights or personal rights encumbering the assets/ debtor
diligence done first always rank first.
ROLE of equalisation
if their is a right in security vs diligence.
which ever was the real right will prevail.
unless if there is a floating charge then it prevails unless effectively dilligence
part 3 of 2002 act
ATTACHMENTif assets in house then only attached in pursuance of exceptional attachment order.
s.48 2002
ATTACHMENTif trade or business in the house then s.48 is factored in. the value of attachable assets must be less thn value of debt and expenses other wise cannot attach
sch 2 2002
ATTACHMENTlists all the non essential items that cannot be attached
s.15-19 2002
ATTACHMENTif assets are outwith the dwelling house. and sherrif officier can open lock fast places.
s.45 2002
ATTACHMENTdefines dwelling house to not include the garage./ mobile home cannot be arrested
s.17 2002
ATTACHMENTattachment reported to court within 14 days
s.21 2002
ATTACHMENTeffect of attachment is that the debtor cannot remove or destroy attached item
if they do this a submission can be made to the sherrif court to argue that debtor = contempt of court
s.19 2002
ATTACHMENTthe debtor can make payment to reddem attached items. failure to do so= power to cred to remove assets and auction
creates a real right will have priority in sequestration and liquidation generally unless have not reg 60 days BEFoRe SEQUASTRAION
s.27 2002
ATTACHMENTthe auction is public
s.31 2002
ATTACHMENT the surplus of the sale goes to the debtor
s.173 2002
the interim attachment
define interim attachment
same as attachment but is sought as soon once the cred has raised the action against the debtor, not when he has a decree against him
it is NOT competent to attch items in DWELLING HOUSE with interim attch.
these items can be attch but not sold until end of court action and debtor gets an attachent
s.175 2002 BAD
this is a form of dil that attaches MONEY belongin to debtor - can lead to payment orders
part 8 2007 BAD
MONEY ARRESTMENTCash has only been able to be seizes since 2009
s.174 BAD
MONEY ARRESTMENT a charge for payment is required and where the debtor is an individual a debt advice and info pack is NEEDED
a money arrestment cannot be arried out against case in dwelling house
S.176BAD
MONEY ARRESTMENT
money arrestment cannot be carried out on a sun before 8am or after 8pm
177BAD
MONEY ARRESTMENT the officer of the court will go into premises and attach and remove money found there money being placed in a bank account within 14 days of the money attachment taking place
182BAD
MONEY ARRESTMENT crd can apply to court must happen within 14 days of report being made to court
183 BAD
MONEY ARRESTMENT
a payment order
187 BAD
MONEY ARRESTMENT
if not money attachment ceased to have effect and money must be returned to debotr
arrestment when is it used
it is used mostly against incoperal movables 1. money and incoperal 2. goods in pos of third part 3. arrestment of ships and cargo 4. arrestment of earnings arster owes the arster money( the arrestee will be owed money by someone else) example x owes 5 to Y xowed 5 by Q
ordinary arrstment
arrestment tripartite relations
the creditor- THE ARRESTER
the debtor- THE COMMON DEBTOR
the third party owing the obli to the debtor- the ARRESTEE
arstee owes the arster money( the arrestee will be owed money by someone else) example
x owes 5 to Y
xowed 5 by Q
s.73A-73T debtors scot 1987
arrestment is in the execution
procedure
arrestment in execution will follow a decree ir doc if debt a schedule of arrestment then prescribed on arrerstee
sherrif officier gets notice of arrestment to arrestee. happens at ANY TIME. there is meant to be a wintess
s.73J debtors scot 1987
arrestment. service @ head bank vs arrestment at branch.- former attach all acocunts held with that bank
latter attsch only accounts in that bank.
expiry of attached funds gor to the cred 14 week period court convey that a debt is due
tantum et tale principle
arrestment
arrestment cannot habe the effect of making the debtors pos any worse.
takes into account the defences available to the debtor by firthcoming
aquirenda
arrestment
new contract cannot be arrested only arrest rights that happen.
separation between future and contingent rights
FUTURE= CAN BE ARRESTED WITHIN A 6MONTH TIME PERIOD
CONTINGENT= CANNOT BE ARRESTED
McDonald v mize
arrestment It may be statd without exception that the arrestment will be laid in the hands if the parties who would have been def in the action for payment of the sum arrested
CAN ARREST SHARES NOT MONEY
s.73E debtors scot 1987
arrestment will attach the lesser of
1. the sum sum due to debtor OR the sum due from debtor to creditor plus expenses
coperals not gen arrested if there are movables
s.73 Fdebtors scot 1987
arrestment if the arrestment if an individuals bank account has been prescriped a min balance it cannot be arrested - 494.04 is current limit
effct of arrestment
arrestment once schedule served arrestment has a freesing effect on the debtor
LONROW
owed money to news agent sdebt in£10k local news agent didn’t get paid. served notice on lead office bank acocunts. reported on stock exchange that wasn’t able to make payments
S.76 G debtors scot 1987
ARRESTMENT
The arrestee has a duty to disclose whether the arrestment has successfully caught any funds and the value of those funds within 3 weeks of the arrestment
arrestment creates a real right in incoperals
S.73Jdebtors scot 1987
ARRESTMENT
once the arrestment is made the funds arrested will automatically be released from arrestee to cred after 14 weeks from the service of that decree or the arrestment
S.73Ndebtors scot 1987
ARRESTMENT
if there is an objection to the funds arrested being released to cred then there will be a hearing
S.73 Ldebtors scot 1987
ARRESTMENT an objection to funds arrested being released
HOW ARE ARRESTMENTS PRIORITISED?
ARRESTMENT
they are prioritised through prior tempore potiore jure rule
there are problems of double distress (multiple arrestments) this can lead to the fund in medio being the subject of an action of multiple poinding so that the court decides what each cred receives
MORRISON V INTEGER SYSTEMS
ARRESTMENT
arrestment gives arrester preference in subsequent sequestration of debtor subject o the 60 day rule
73 Edebtors scot 1987
ARRESTMENT were goods were stored by a third party (ie a warehouse). attachment was also competent though the intro of interim attachment rendered any benefit redundant
ADMIND AND JUSTICE ACT AND RULES OF COURT OF SESSION CH 46
ARRESTMENT
ships are arrestable NOT attachable. cargo not attachable but ONLY arrestable
S.47-50debtors scot 1987
ARRESTMENT
creditor serves a single arrestment which attaches future earnings
S.90debtors scot 1987
ARRESTMENT before being available the cred must have been served with a charge for payment
S.47 debtors scot 1987
ARRESTMENT
debt advice info package
S.49debtors scot 1987
ARRESTMENT
arrestment served on employer employer must deduct sum in accordance
SLATER V GRAMPIAN
ARRESTMENT
if cred is employer can arrest in own hands 14 days to pay
73(2)(3)debtors scot 1987
ARRESTMENT
private pensions covered by scheme but social sec rights including state pernsion ARE UNARRESTABLE
mac million v tlieth
ARRESTMENT
Sieze diligence PREVAILS OVER OTHER DILLICENCES.
prevails in insolvency.
diligence v floating charge decision confirms if you get a diligence that its carried out prior to the floating charge it takes priorty! overturn LORD AV V BANK OF SCOT
so bare arrestment will take priority
arrestment example1
a = cred
bowes money to A
C OWES money to b
define their posidiotns
A= 3 party right as creditior
B =debtor
c= debtors debtor
arrestment example 2
if A is owed money by b and b is owed money by c.
but before A could arrest b assigns right to d. d then intimates to c. would this confer assign rights on to D
yes a slong as D had intimated assignation to c before a had arrested b. then D would have had an assignation right
define inhibiton
dil that affects the debtors heritable property
affects all debtors heritage- not merely specified subjects
does not give cred real right
is a freeze dil makes priority lit.
s.146(1)BAD2007
inhibition can be used to enforce decree or doc debt
147BAD2007
where the debtor is an individual a debt info package must be served at the same time that the schedule of inhibition is served
148BAD2007
inhibitions must be reg in the reg of inhibitions. it is reg along with the execution of service of inhibition
155 titles to land consol act 1868
an inhibtion will from the day it is reg unless notice was reg in ADVANCE and the inhibition is reg 21 days thereof
149BAD2007
date of serving the schedule of inhibition = effective
44(3) CONVEYANCING SCOT ACT 1924
inhibitions cease to have effect after 5 years
157 BAD2007
inhibiton cease to have effect after debt paid
s.157 titles to land consol 1868
effects inhibition affect all heritiable property of the debto in scot at the date inhibiton effective NOT DATE HERITAGE ACQUIRED
160titles to land consol 1868
the inhibition prohibits the debtosr from conveying or otherwise granting a deed affecting the property
playfair investmenrs v mcelvogue
strikes voluntary acts of the debtor.
missives are not voluntary acts thus inhibiton cannot stop it
inhibition can still be implemented after contract completed provision clear search on the reg will identify if a property has an inhibition
park petrs
INHIBITIONif they take place on the same day Mr Thomson ruled that the original documents – not faxes – had to be exchanged (or at least be confirmed as being held on behalf of the other solicitor’s client) for the missives to be legal and binding.
The ruling is based around the principle of Scots law that provides that missive letters must be delivered in order for them to be effective and binding. This case held that the delivery of principal documents is fundamental and that the faxed delivery of documents will not suffice
159titles to land consol 1868
inhibiton
goodfaith purchesors paying adequate consideration are not affected by inhibhition
heritiable cred who has security that pre dates the inhibiton vs a heritable cred that post dates inhibtion
adjudication def
affects heritable and intellectual property rights
court of sesh action against specific heritable property MUST be reg in LAND REG
the cred is the ADUJUDGER and obtains a judicial right insec over property.
the cred CANNOT sell but has the power to REMOVE the debtor and let.
if already let the adjudge tkes rent by maMAILLS AND DUTIES
DEBTOR REMAINS OWNER
WHAT HAPPENS IN ADJUICATION WHERE THE DEBT IS UNPAID FOR +10 YEARS
the adjudge can require ownership by a declarator.
adjudge unlikely to have to wait 10 years because the debtor may pay or
rents may pay off debt
or prior heritable cred may sell OR debtors sequestration
hull v campbell
adjudication:
was the first case for years and considered whether the adjudge was entitled to a windfall benefit in the event of a declaratory of the expiry of the legal
s.79 2007 bad
if brought into force then adjuications may be abolished
and replaced with land attachments
s.4 1880
imprisonment for debt
still available for aliment but not sums awarded in divorce
s.74 debtors scot act 1987
rates and taxes imprisonment for debt
tasker v smith
confirmation as exec-cred
where debtor dead and exec confirmed action in dil can be directed against the exect
if no exec then the cred himself confirms as cred/ exec to value of debt
presupposes the debt is constituted if debtor died pre constitution action cognitionis causa tantum
s.208 BAD 2007
sequestration for rent cease for rent renewed new they have to use attachment
ABOLISHED
LAND LORD HYPOTHEC
2000 act
real adjudication on a ebitum fundi
207 BAD 2007
Maills and duties tight to rent debto is a land lord and owed money in rent. raise an action mails and duties pay to cred rather than to land lord but to secured cred
207 WILL ABOLISH THIS BUT NOT INTRIODUCED YET
15 A-15N DEBTORS SCOT ACT
15 F- cred needs to show dil on the dependence should be granted
which dil does not need to wait for a decree but can use them during deoendence
inhibition and arrestment
karl construction ltd v palisade properties
reform of s. 15 of DEBTORS SCOT ACTare to some extent based on changes in case law that implemented echr law
dil on dependence v dil on execution
IF pursuer obtains decree dil continues as dil in execution but see the position re interim attachment. if absolvitor diligence FAILS
no forthcoming whilse action still depending. no auto matic release of funds
ben-arous v mediouni
you will only be granted dil on the dependence if you go to court with claen hands
summary dil
DECREE FOR PAYMENT IS NORMALLY OBTAINED BY ACTION in two cases the cred may receive decree of reg
debt is dishonoured draft or promissory note ntoorial protest is reg
where debtor has consented to reg
dil on a summary warrant
debtors scot act 1987 sch4
not to be confused with summary dil. NO DECREE REQUIRED FOR TAXES ECT
ATTACHMENT ARRESTMENT customs and exceise
BAD ACT 2007 CHARGE FOR PAYMENT IS NECESSARY
remedies against wrongous dil
damages for loss caused to the debtor interim orders
time to pay order and directions
direction sought by debtor in terms of action for payment against him order sought when charge served or arrestenment carried out. in both debtor seeks time to make payment
while enforce creditor cannot use dil
reform s.210 2007 could grant a time to pay order if reasonable circumstances taking into account the details in S.1(1A) AND 5(1A) DEBTORS SCOT ACT 1987
debt arrangement
MACKIN V MACKIN notwithstanding that an application to have a payment programme approved had been made with the appropriate entry in the DAS register, a warrant to cite required to be granted. Presentation of a petition for a warrant did not amount to petitioning for sequestration, which only occurred after citation and the calling of the petition on the date assigned. The regulations regarding applications for payment programmes related to the moving for sequestration to be granted. They did not apply to seeking a warrant to cite
expenses
paid for by cred recovable by debtor
sequestration and liqyidation- dil
s.24 bankruptcy scot act and s.185 insolvency scot act
if 60 days prior to sequestration/ liquidation= invalidated.
s.195 -198 bankruptcy scot act
if the debtor notifies the accountant they intend to do sequestration then moratorium on doing dilarises aginst the debtor for 6 weeks from reg of appropriate notice by accountant
receivership and gen positioning regarding floating charges -dil
recievers right are subject to effectually executed dil.
insol act s.55(3)
macmill v t. lieth development- overturned decision that arrestment nit completed by firthcoming NOT EFFECTUALLY EXECUTED DIL
HELD THAT AN INHIBHITION IS AN EFFECTUALLY EXECUTED FIL
administration - dilVERY IMPORTANT
insolvency act sch B1 para 43(6)moratorium which blocks enforcement and carrying out of dil
43(2) UNLESS EXISTING DIL
