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Bankruptcy and Diligence etc. (Scotland) Act 2007

Creation
Section 146 – Certain decrees and documents of debt to authorise inhibition without need for letters of inhibition

412.This section replaces the existing common law on when it is competent to inhibit in execution (for inhibition on the dependence, see Part 6 of this Act).

413.Subsection (1) provides that inhibition in execution is competent to enforce payment of a debt constituted by a decree or document of debt or to enforce an obligation to perform a particular act (sometimes referred to as an obligation ad factum praestandum). Inhibition is competent only to enforce that kind of obligation where it is contained in a decree (so it is not competent to inhibit in execution of an obligation contained in a document of debt) and the action in which the decree is obtained either contained an alternative conclusion or crave for payment of money (for example, payment of damages if the obligation was not adhered to) or was an action demanding the conveyance of or granting of a real right in heritable property (subsection (2)).

414.Subsections (3) to (5) insert provisions relating to an inhibition for ordinary debt into the Writs Execution (Scotland) Act 1877, Sheriff Courts (Scotland) Extracts Act 1892 and the 1987 Act which provide that extract decrees or documents for payment automatically carry a warrant for inhibition (including extracts of decrees granted in the sheriff court). Previously, the sheriff could not grant warrant for inhibition in execution and a creditor wishing to inhibit in execution of a sheriff court decree had to apply by letters of inhibition to the Court of Session. The amendments made by these subsections mean that there is now no need to apply for such letters of inhibition and subsection (6) abolishes this procedure.

415.Subsection (7) provides that the sections 165 and 166 (dealing with expenses and allocation of sums paid to account) do not apply to inhibitions executed to enforce the performance of an obligation. This is because there is no principal sum along with which expenses could be recovered under section 166 and no sum can be paid to account when there is no principal sum being recovered. This section also modifies the references to “debtor” and “creditor” in sections 158 to 160 and 163 to make it clear that, in the case of inhibition to enforce performance of an obligation, those references make sense even though no money debt is involved.

416.Subsection (8) defines “decree” and “document of debt” by reference to section 221 of the Act. Subsection (9) provides for those definitions to be modified by the Scottish Ministers by regulations. Those regulations will be subject to negative resolution procedure (see section 224(3)).

Section 147 – Provision of debt advice and information package when executing inhibition

417.Section 147 provides that a creditor executing certain inhibitions must provide the debtor (where the debtor is an individual) with a debt advice and information pack. Those inhibitions are—

  • inhibitions in execution of a decree for payment and

  • inhibitions in execution of a decree containing an obligation (other than an obligation to convey heritable property or to grant rights in such property) to perform a particular act where the action in which that decree was obtained also contained an alternative conclusion or crave for payment of money (other than expenses).

418.An inhibition in execution will be incompetent if the debtor is not provided with the debt advice and information package at the same time as the schedule of inhibition is served. The debt advice and information package is the same package required, in the case of attachment of moveables, by section 10 of the 2002 Act (see section 221).

Section 148 – Registration of inhibition

419.This section provides that an inhibition is registered only by registering the schedule and certificate of inhibition in the Register of Inhibitions. This section should be read with section 155 of the Titles to Land Consolidation (Scotland) Act 1868 (as substituted by section 149 of this Act). The schedule and certificate must be in the form prescribed by the Scottish Ministers by regulations (such regulations being subject to negative resolution procedure (see section 224(3)).

Section 149 – Date on which inhibition takes effect

420.This section replaces section 155 of the Titles to Land Consolidation (Scotland) Act 1868 with a new version of that section.

421.New section 155 provides that an inhibition takes effect on the day it is registered unless

  • a separate notice of inhibition is registered in the Register of Inhibitions;

  • the schedule of inhibition is served on the debtor after that notice is registered; and

  • the inhibition is registered before 21 days have expired from the date of registering the notice.

422.In those circumstances, the inhibition takes effect from the date of the serving of the schedule. A notice of inhibition must be in the form prescribed by the Scottish Ministers by regulations. By virtue of section 159B of the 1868 Act (inserted by section 164 of this Act), such regulations are subject to negative resolution procedure.

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