S11.8 Minuting of Ranking Clauses

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Feb 04, 2015
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Pari Passu

The phrase – “containing provision as to ranking” is minuted where:

(I) Two Standard Securities are presented together and each contains a declaration of pari passu ranking,

or

(II) A Standard Security, presented alone, is to rank pari passu with any other security over the same subjects.

Note: For such ranking to be effective with regard to a prior recorded Security, the prior creditor must consent unless:

(1) They are also the creditor in the new security, or

(2)  There is a pari passu ranking clause in the prior recorded security.

Where the prior creditor consents (and subscribes), the ranking clause is minuted. The consent is not.

Postponement

The phrase – “containing provision as to ranking” is minuted where the prior Standard Security (or Bond) has already been recorded and the date of recording is given in the writ being minuted.

  • If the prior Standard Security has not been recorded, the postponement is minuted as “containing provision as to ranking”.
  • If the two Standard Securities are presented together and one contains a postponement clause referring to the other as being “granted or about to be granted by me in favour of AB and recorded or intended to be recorded of even date with the recording of these presents”, the clause is minuted as:
    “- containing provision as to ranking”

Prior Ranking

This clause is minuted:

“- containing provision as to ranking”.

For such a clause to be effective there must be either:

(a) the consent of the creditor whose security is being postponed in the deed containing the declaration of prior ranking,

or

(b) a clause of postponement (which is minuted) in the prior recorded security.

If the creditor consents and subscribes, the ranking clause, (but not the consent) is minuted; if they do not consent, the ranking clause is not minuted.

A typical style of minute for a Standard Security with a ranking clause is:

STANDARD SECURITY by ?pALEXANDER ?nKENNEDY?z and ?pSANDRA ?nKENNEDY?z, spouses, 76 Wotherspoon Drive, Bo’ness - TO ?p?nFALKIRK DISTRICT COUNCIL?z, - over the subjects in the ?utwo?z immediately preceding Minutes - containing provision as to ranking. Dated 9 May 2003.

 

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