Other Diligences Flashcards
What are the other diligences?
- Imprisonment for debt
Debtors (S) Act 1880. Rates and taxes? 1987 Act s 74. Still available to enforce aliment, but not sums awarded in divorce action: Whyte 1984 SLT (Sh Ct) 30.
- Confirmation as executor-creditor
Where debtor dead, and executor confirmed, action and diligence directed against executor. But if no confirmed executor? Creditor himself then confirms as executor-creditor, to value of debt. Formerly only against moveables. Succession (S) Act 1964. Smith’s Trs v Grant (1862) 24 D 1142.
Presupposes that debt is constituted. If debtor died before constitution, action cognitionis causa tantum. Smith v Tasker 1955 SLT 347.
- Sequestration for rent
Abolished: s 208, 2007 Act. How is the hypothec to be enforced in future?
- Real poinding
Also called poinding of the ground.
- Real adjudication
Also called adjudication on a debitum fundi.
Both affected by the 2000 Act.
- Maills and duties
What is it at the moment?
Note this is to be abolished by s 207, 2007 Act. However, abolition pends introduction of land attachments.
What is diligence on the dependance and interim diligence?
- There are two statutory regimes in relation to interim attachment and diligences on the dependence[ Applies to inhibitions and arrestments.]:
⁃ Interim attachment: ss 9A-9S 2002 Act
⁃ Diligences on the dependence: ss 15A-15N 1987 Act- This is permissible for attachment, arrestment and inhibition (1987 Act for the last two).
SW NOT EXPECTING US TO GO AND READ THESE PROVISIONS, WHAT WE NEED TO KNOW IS THE FOLLOWING:
What is required?
⁃ Two things are required for either interim attachment or diligence on the dependence:
⁃ 1) Prima facie case that the debt is due[ This is normally very easy to satisfy.]
⁃ 2) Real and substation risk that the enforcement will be defeated by the debtor being (or verging on insolvency) or debtor removing assets[ This would require you to show some form of bad faith on the part of the debtor.].
⁃ Proving that the debtor is verging on insolvency is relatively easy to satisfy:
Where you have an action for diligence on the dependence it is not necessary for both sides to be represented before the sheriff. Typically the creditor will want to raise the action before the debtor knows (if there is a real and substantial risk of the debtor becoming insolvent you want to try and present the argument before the debtor finds out). Once this happens the debtor has the power to go to court and argue his case.
MacCormack v Hamilton Accies [2009]
⁃ MacCormack assistant manager of Hamilton Accies. He was dismissed and raised an action against Hamilton for payemt damages etc. MacCormack knew that Hamilton had drawn Rangers in the cup. Having drawn Rangers in the cup the ticket sales are shared between the teams. This meant that once the game had been played Rangers would be under an obligation to pay money to Hamilton. Thus MacCormack’s debtor Hamilton would have a right of payment against Rangers. MacCormack applied for the court to arrest the ticket receipts.
⁃ MacCormack took the simple step of presenting to the court Hamilton’s accounts which indicated that their total liabilities were greater than their total assets - that, on the basis of their balance sheet, insolvent. It was accepted by the court that there was no risk that Hamilton were going to go into liquidation but the court said that for the purposes of diligence on the dependence, although there is no immediate prospect of them going into liquidation, there was a threat of insolvency based on the balance sheet so MacCormack was entitled to arrestment on the dependence before conclusion of the action.
What are the two tests to determine whether the debtor will go insolvent?
There are two tests to determine whether the debtor will go insolvent: (1) balance sheet or absolute insolvency - your total liabilities are greater than your total assets (2) practical insolvency or cash flow insolvency is the case that you might be able to show you have more assets than liabilities but you cannot afford to pay your debts as they are due (liquidity problem). If you can satisfy the court that either of these apply then you will get diligence on the dependent.
What is summary diligence and diligence on summary warrant?
Summary diligence is a mechanism to obtain diligence without a court decree. It can occur where:
⁃ 1) Where there is a notarial instrument which asserts that the debt is due. This happens where there is a dishonoured bill of exchange.
⁃ 2) When the debtor has agreed to registration of a document “for preservation and execution” in the Books of Council and Session.
