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LLOYDS TSB PLC V. LAUTER
Note Hearing at Glasgow Sheriff Court on 2 July 2004 at 11.30am
On 2 July 2004 Sheriff Peebles Q.C. allowed the defender to be reponed from a mortgage repossession decree granted in October 2001 (before the commencement of the Mortgage Rights (Scotland) Act 2001) solely with respect to the first proposed defence (founded upon the Scots law of waiver) and ordained defences to be lodged within 14 days and appointed an Options Hearing (no written judgment was issued).
Govan Law Centre - the defender's first proposed defence is summarised as follows:
The pursuers are personally barred from enforcing the decree in this action because of their actings over the last 3 and half years since decree was extracted.
The pursuers sole plea-in-law in the Initial Writ is founded upon the defender being in default of Standard Condition 9(1)(a) to sch 3 of the 1970 Conveyancing & Feudal Reform (Scotland) Act.
Thus the pursuers ground of action on the pleadings rests upon the defender's failure to make payment in terms of a Calling-up Notice served before the action was raised. That notice required full payment of a secured loan of over £25,000.
As averred in the Reponing Note mortgage arrears were cleared in full on 14 November 2001. Proof of payment has been lodged in process.
What has then happened over the last three and half years is that the pursuers have accepted regular monthly mortgage payments. They have issued her with regular monthly mortgage statements. Of course, from a pure legal perspective on or about 3 September 2001 - at which time two months had elapsed since service of the Calling-up Notice - the loan had crystallised. There was no right to make monthly instalments as the whole loan was now legally due and owing.
On the facts, the defenders position is that the pursuers have waived their right to found upon the Calling-up Notice and are barred from doing so. The defender's agent cannot find any case law where the principle of waiver and personal bar has applied to the facts of the present case but the principle is well illustrated in the case of Banks v. Mecca Bookmakers (Scotland) Ltd 1982 SLT 150. In this case Mr Banks rented various properties to tenants. Mr Banks sought to rely upon a rent review clause to put the rent up. However he had accepted the current rent for some time after the rent review date and Mecca Bookmakers argued that he had acquiesced to the current level of rent. Lord Grieve found in favour of the tenant, and in the final paragraph of the judgment he states:
"The continued acceptance of the stated rent, in once case for nearly two years and in the other for nearly one in my view can only be regarded as indicative of an abandonment by the pursuer of his right to initiate, and thereafter insist, on a rent review at Whitsunday 1976 and Whitsunday 1977."
The defender would contend that the pursuers acceptance of mortgage payments for three and half years after default of standard condition 9(1)(a) means that they have waived their right to found upon same; and as such cannot enforce the present decree.