15 Mar 2012

Minute for Recall

Minute for Recall

Aaron Doran, Associate, provides a refresher on the reponing and recall procedures.

Aaron Doran, Associate, provides a refresher on the reponing and recall procedures.

Legislation and rules change, but one thing remains constant - a borrower’s willingness to put his or her ‘head in the sand’ and ignore the arrears mounting up on their mortgage account, in the hope that everything will just go away.

Reponing Notes

Before the Home Owner and Debtor Protection (Scotland) Act 2010 (the ‘2010 Act’) came into force and changed the face of Scottish Repossession Law, the number of cases calling in court were in the minority. It wasn’t until the borrower took steps to lodge either a form with the court (stating their intention to defend the action) or a Minute (asking the court to suspend a lender’s rights in terms of the Mortgage Rights (Scotland) Act 2001 (the ‘2001 Act’)), did the case call in court. However, more often than not, borrowers didn’t take these steps and a decree was granted without the case ever calling in court.

It was not until the decree was enforced and the borrower received notification of the ejection date, would they take their ‘head out of the sand’ and contact a solicitor to seek advice. At that point, the solicitor would lodge what was known as a Reponing Note. The Reponing Note would describe the borrower’s reasons for failing to ‘defend’ the action before decree was granted and outline their intended line of defence. Upon receipt of the Reponing Note, the Sheriff would consider what was noted and recall the decree if he thought it necessary.

Minute for Recall

The introduction of the 2010 Act provided the borrowers with a forum to attend court in every case. Unfortunately, it appears that borrowers are still failing to take this opportunity to put their case forward and are (as before) waiting until the ejection date has been fixed before they take their ‘heads out of the sand’ and seek legal advice.

Rather than following the Reponing Note procedure, the 2010 Act provides a new way of asking the court to recall the decree. Furthermore, it is not only the borrower who can apply for this recall, but a lender or an entitled resident can now seek recall of decree.

The Minute for Recall is simply a box ticking exercise and its form (Form 11F) is set out in the 2010 Act. The borrower (or more likely his or her solicitor) will fill out the court details and tick the box, confirming that he or she is the named Defender in the particular case. The court will then assign a Hearing on the Minute for Recall.

Unlike the Reponing Note, there is no requirement upon the borrower to provide a reason for failing to attend the first Hearing; nor is there a requirement to state the intended defence.

At the Hearing on the Minute for Recall, the Sheriff has no discretion and the Decree granted in the lender’s favour has to be recalled; regardless of the reasonableness of such a recall. The Hearing will then proceed as if it is the first Hearing of the action, where the lender has to convince the Sheriff that it is reasonable in the circumstances for the court to grant decree. More often than not, the borrower is ordained to lodge Answers (written defence to the action) and a further Hearing will be assigned.

Despite our attempts to stress the importance of obtaining legal advice at an early stage, borrowers do not seem to change their habits and as the legislation has provided them with an opportunity to recall the Decree; it is a procedure that we will simply have to deal with, regardless of whether we believe the borrower is simply using it as a ‘stalling tactic’.

Aaron Doran, Associate

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