Bankruptcy Legislation - inhibition in execution by dfsiopmhy6



New provisions relating to the creation, termination, registration and legal effect of
inhibitions and other forms of diligence come into effect on 22 April 2009. The new
provisions are contained in Part 5 of the Bankruptcy and Diligence etc. (Scotland) Act
2007 (and supplemented by the Diligence (Scotland) Regulations 2009 and the
Bankruptcy and Diligence etc. (Scotland) Act 2007 (Inhibition) Order 2009). This has
consequences for those parties who intend to submit inhibitions to the Register of
Inhibitions and Adjudications for recording and those undertaking a search of that
Register. The main changes introduced by the Act and Regulations can be
summarised as follows:

   •   The Court of Session can no longer grant Letters of Inhibition (section 146(6)
       of the 2007 Act). Instead, inhibitions are to be registered by (i) Schedule of
       Inhibition served by an officer of the Sheriff Court or the Court of Session and
       (ii) Certificate of Execution of Inhibition (section 148 of the 2007 Act). These
       are in the forms prescribed by the Diligence (Scotland) Regulations 2009 (SSI
       2009/68). The Office of Public Sector Information Website

   •   Applications for registration of an inhibition in the Register of Inhibitions and
       Adjudications (ROI) should be accompanied by (1) a copy of the Schedule of
       Inhibition, certified as a true copy by the Messenger at Arms or Sheriff Officer,
       and (2) the associated Certificate of Execution of the inhibition. The
       registration of the Schedule and Certificate will be reflected by a single entry
       in      the      ROI      minute      book     in     the    following      style:
       Schedule of Inhibition [inhibitor] against [inhibited], served [date] per XY,

   •   An inhibition will take effect from the date of registration, except where a
       Notice of Inhibition is registered in the ROI and is followed by registration of a
       Schedule of Inhibition within 21 days. In that latter event the inhibition takes
       effect from the date on which the Schedule is served on the debtor (that date
       will be provided in the ROI minute book entry) (section 149 of 2007 Act).

   •   Inhibition on the dependence of an action can be converted into an inhibition
       in execution. Section 152(2) of the 2007 Act (as subsequently amended)
       introduces a new procedure where a creditor has obtained a decree for
       payment of all or part of a principal sum in an action in which the creditor had
       executed inhibition on the dependence, and that inhibition had been limited by
       the Court to specified property in terms of section 15J(b) of the Debtors
       (Scotland) Act 1987. The procedure permits the creditor to turn that inhibition
       into a general inhibition that is no longer specific to that property. This is
       dependent on registration in the ROI of a Notice accompanied by an Extract
       of the Decree or a copy Interlocutor certified by the clerk of court.
   •   An inhibition will be breached where the inhibited party delivers a deed to a
       third party conveying or granting a right in a property which is affected by the
       inhibition (section 160 of 2007 Act). Section 161 makes clear that a twenty
       year period of long negative prescription will apply in respect of inhibition (i.e.
       an inhibitor can have a deed granted in breach of an inhibition reduced for up
       to twenty years following the date of delivery of that deed).

   •   The Keeper is obliged to enter an inhibition in a Land Register title sheet only
       when completing registration of an interest in land where the interest has
       been transferred or created in breach of the inhibition (section 167 of 2007

   •   Part 5 of the 2007 Act also brings in changes in respect of notices of litigosity.
       Section 162 of the 2007 Act introduces a new section 159A to the Titles to
       Land Consolidation (Scotland) Act 1868. An inhibiting creditor who raises an
       action of reduction of a conveyance or a deed granted in breach of an
       inhibition must register a Notice of Summons of Reduction in both the ROI
       and the Land Register or General Register of Sasines (whichever is
       appropriate). This gives notice that the property is affected by ongoing court
       action, i.e. has been rendered litigious. The Keeper’s expectation is that
       solicitors will submit the Notice for registration in both the ROI and the
       relevant property register simultaneously (i.e. the Notice should be
       accompanied by both an application for registration in the ROI and the
       relevant form and fee for registration in the Land or Sasine Register). If the
       Court action fails, a Discharge of the Notice of Summons is dual registered in
       the same fashion.

Further information and advice about registration procedure in the Register of
Inhibitions and Adjudications is available from the Chancery & Judicial Registers at
0131 200 3916 or by email to

Guidance on the implications for applications for registration in the Land Register is
available from Pre-Registration Enquiries at 0845 607 0163 or by email to

Further information on the commencement of the 2007 Act is also available from the
Accountant in Bankruptcy at 0845 762 6171 or by email to

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