Inhibitions

Introduction

Historically, obtaining a warrant to inhibit was a Court of Session process. However, with effect from 1 April 2008 Sheriff Courts are able, along with the Court of Session, to grant warrant for inhibition. This follows on from the implementation of certain elements of Part 6 of the Bankruptcy and Diligence etc. (Scotland) Act 2007. 

Where a court order grants warrant for inhibition it may be over specific property/properties or over the whole of an individual’s heritable property. Thereafter The Bankruptcy and Diligence etc. (Scotland) Act 2007 (Inhibition) Order 2009 (SSI 2009/129) provides for the conversion of a specific inhibition on the dependence to a general inhibition over all an individual’s heritable property.

Furthermore Part 5 of that same Act introduced a number of important changes to submissions to the Register of Inhibitions with effect from 22 April 2009.

Creation of Inhibitions

From 22 April 2009 a person can be inhibited in the following ways:

(a) Where the creditor has obtained a decree in the Sheriff Court or in the Court of Session, either for payment of a debt or for specific implement of an obligation. The decree itself authorises inhibition obviating the need for a separate petition for letters of inhibition.

(b) Where a document of debt has been registered for execution e.g. in the Books of Council and Session or the Sheriff Court Books (i.e. without any court action).

(c) Where a person has been interdicted from dealing with any property by a restraint order in terms of the Proceeds of Crime (Scotland) Act 1995 or the Proceeds of Crime Act 2002. Such inhibitions will be submitted by the Crown Office. 

(d) Any other order of the Judge in the Court of Session.

Procedural Requirements

The types of statutory document that may be submitted for registration in the RoI, together with the procedural requirements for RoI staff are contained in The Diligence (Scotland) Regulations 2009 (SSI 2009/68) and The Diligence (Scotland) Amendment Regulations 2009 (SSI 2009/396). The schedules contained therein set out the prescribed style of inhibition which may be recorded in the RoI if served on or after 22 April, 2009. See ROI - Details of Common Deeds for more information.

Registration staff should, of course, ensure that those requirements of the RoI which, although not prescribed by statute, are necessary for the performance of the duties of CAJR staff, are also met.

For example, it is preferable if the Keeper is given:

(a) sufficient information in the documents entering the Record Volume to identify both pursuer and defender (names and addresses) for the purpose of the Minute Book and

(b) where more than one document is registered together, sufficient information on the face of each document to relate it to the other document(s).

Notice of Inhibition

The form of a notice of inhibition is prescribed by section 155(4) of the Titles to Land Consolidation (Scotland) Act 1868 (added to by section 149 of the Bankruptcy and Diligence etc. (Scotland) Act 2007). Below is the prescribed style as set out in The Diligence (Scotland) Regulations 2009 (SSI 2009/68) and further amended by The Diligence (Scotland) Amendment Regulations 2009 (SSI 2009/396) and is the only accepted form of notice after 22 April 2009.

The minute will be entered in the RoI as follows: 

Inhibitory Effect of Notice of Inhibition

• The registration of a Notice of Inhibition does not by itself inhibit a debtor. However, it does act as a warning to a potential buyer of heritable property or to a lender that an action has been raised and that an inhibition may follow. 

• Unless a schedule of inhibition follows within 21 days of the Notice being registered then the Notice prescribes and has no effect.

• However, if a Schedule of Inhibition does follow and it is registered within the 21 days and before the date of service of the Schedule then the effective date of inhibition is backdated to the date of service of the Schedule. 

• Without a Notice an inhibition takes effect from the date of registration of the Schedule.

• The 21 days start on the day of registration of the Notice in the Register of Inhibitions.

• It is not compulsory to register a Notice of Inhibition before registering a Schedule of Inhibition.

• A Notice may be on more than one person (a Schedule is on one person/party only).

Schedule of Inhibition

For registration we need:

• Schedule 1 (Schedule of Inhibition) and
• Schedule 2 (Certificate of Execution) if served by a Messenger at Arms or
• Schedule 3 (Certificate of Execution) if served by a Sheriff Officer 

The prescribed wordings for these documents are available. Please check The Diligence (Scotland) Regulations 2009 (SSI 2009/68) as amended by The Bankruptcy and Diligence etc. (Scotland) Act 2007 (Inhibition) Order 2009 (SSI 2009/129) and The Diligence (Scotland) Amendment Regulations 2009 (SSI 2009/396) for the prescribed wordings as this is the only format we can accept.

Schedule 1 - Schedule of Inhibition - Requirements:

(section 148(3)(a) of the 2007 Act)

• Is the inhibition ‘on the dependence’?
• Date of service entered.
• Name and designation of person on whom served (debtor).
• Sheriff Officer / Messenger at Arms named.
• Instrument of inhibition described after the words ‘by virtue of’ (must be one of the choices given in prescribed form).
• Pursuer name and designation narrated.
• Is it general or specific? 
• If specific, a title number or a Sasines description conforming to Schedule D or J of the Conveyancing (Scotland) Act 1924.
• Messenger at Arms or Sheriff Officer signs.
• Statement certifying Schedule is a true copy must be signed by Messenger at Arms or Sheriff Officer.

Schedule 2 or Schedule 3 - Certificate of Execution - Requirements:

(section 148(3)(b) of the 2007 Act)

• Is it ‘on the dependence’? - to agree with Schedule 1.
• Same Messenger at Arms / Sheriff Officer must be named.
• Date of Service entered as per Schedule 1 .
• Instrument of Inhibition described to agree with Schedule 1.
• Pursuer named and designed to agree with Schedule 1.
• Against name and designation of debtor.
• On name of debtor.

All the above must be consistent with Schedule 1, then:

• Method of execution must be narrated as appropriate depending whether the debtor is an individual, a firm or a limited company. If the debtor resides 'furth of Scotland' / 'present whereabouts are unknown' the description of service differs depending on whether a Schedule 2 or 3 has been used. 
• Messenger at Arms/Sheriff Officer (or other person authorised to sign if 'furth of Scotland') signs Certificate of Execution.
• Witness then signs.

Discharge of Inhibition

An inhibition may be wholly or partially removed by the creditor voluntarily discharging it. In the event that the creditor cannot or will not issue a discharge, the inhibition can be recalled by the Court issuing the action – whether Court of Session or Sheriff Court.

Discharge:

Where all the questions between the parties have been settled so that the inhibition is useless, the debtor should make an application to the inhibitor for a discharge of inhibition. The inhibitor cannot be compelled to grant a discharge, but his refusal will subject him to the expenses of a recall by the court.

Partial Discharge:

If the debtor owns more than one property it is possible, on application to the inhibitor, to have the inhibition discharged as regards a certain property or properties or apply to the relevant court to have the inhibition recalled or restricted to one or more properties as the case may be.

Execution:

As to execution, since 1 August 1995 all discharges must be attested in terms of section 3 of the Requirements of Writing (Scotland) Act 1995.

Decree of Absolvitor

A Decree of Absolvitor is acceptable as a deed capable of clearing an inhibition. However, there is no statutory provision for recording such documents in the ROI. Rather, the precedent is case law from the early/mid 1800s. This establishes that such a decree could be used as a warrant for noting (a practice that has been discontinued, but speaks to the legitimacy of making a new entry in the ROI for the decree). 

Various authorities make it very clear that a Decree of Absolvitor is effective to negate a prior inhibition, even if it does not explicitly state this face on its face. Whilst it may be the case that it would be possible to obtain a discharge or recall, this might not be necessary because of the effect of the absolvitor. An extract decree certified as a true copy by the sheriff clerk is acceptable because there is no cause to doubt that the clerk of that court (a) has authority to certify and (b) can speak to the accuracy of the copy).

The submission of a Decree of Absolvitor is rare. Therefore if there is any doubt about the validity of the deed it should be referred to the CAJR Team Leader in the first instance. It may be necessary to seek advice from the Registration Practice team and / or Policy.