Sheriff Court case in which HSBC sought to recover possession of a cottage in Lockerbie when the debtor defaulted in terms of a standard security over the property. The sole issue for the court was the reasonableness of the orders sought by HSBC. (In terms of the Conveyancing and Feudal Reform (Scotland) Act 1970 the Court can only grant an order allowing the creditor to exercise its remedies  where the court considers that it is reasonable in the circumstances to do so.)

At first instance the sheriff granted the orders sought by HSBC allowing them to take possession of the property. In coming to his decision the Sheriff took account of two proposals made by the debtor to make repayments to HSBC. Both of the proposals required HSBC to compromise the sums due by over £100k (the debtor’s total indebtedness amounted to over £400k). Although HSBC did not make any counter proposals, the sheriff noted the lack of financial information provided by the debtor and the late stage in the proceedings that the proposals for payment were made (the week of the hearing) before finding that it was reasonable to grant the application in favour of HSBC.

The Sheriff Principal refused an appeal of that decision.

“As at present advised, although two separate offers have been made, there is no information before the court as to how these offers would be funded. There is no statement of assets. There is no statement of income and expenditure. There is [no] document from a source which would provide funding to allow the indebtedness to be obtempered. There is no assurance available to the respondent that funds would be available on the dates set out by the appellants. It cannot be said that it would be reasonable in these circumstances for the respondent to accept either of the offers which have been made. They are wholly unsubstantiated

The sheriff’s decision was one which he was entitled to make in the exercise of his discretion in light of all the information before him.  The appeal fails.”

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.