Just in case you are wondering it appears that attempts to jail Scottish debtors over non payment of instalments are alive and well.  To be honest I thought that such an approach passed away along with ‘Dickens’.  It appears I’m wrong!  For my misinterpretation of the law I apologise.  For the judicial outcome which clearly stated that the debtor would not be jailed, I am of course, both grateful and relieved. So what’s it all about?

The Facts

A car finance company, Moneybarn No 1, (a really catchy name don’t you think?) had an agreement with Steven Bell to sell a car to him.  Unfortunately instalment payments were not made and Mr Bell did not return the car to Moneybarn.  The parties had entered into a conditional sale agreement the terms of which Mr Bell had agreed to buy the car for £18,244.  The amount of credit was £9,389.  Following upon a failure to meet the payments Moneybarn served a default notice and a month later the agreement was terminated.  By this time there was a further £11,109 due in respect of the balance of the instalment payments payable under the agreement.  Thereafter Moneybarn sought payment of that amount as well as delivery of the car.  Failing delivery of the car Moneybarn were looking for payment of a further £8,200 which they estimated was the value of the car on the date the agreement had been terminated along with expenses.

Following litigation to have the vehicle returned Mr Bell was ordained to appear before the Sheriff Court.  Because he did not do so Moneybarn asked that he be apprehended and imprisoned for six months.  However the Court decided that there was ‘no justification’ for such an application, particularly because Moneybarn had already obtained the court’s warrant to search for and have the vehicle delivered to them.

Problems Mount

The court action trundled through the judicial process and by June 2016 Bell had been ordained to deliver the vehicle to Moneybarn which he failed to do.  Thereafter Sheriff Officers were granted a warrant to search for and take possession of the car.  Presumably such attempts were unsuccessful resulting in Moneybarn asking the Court to require Bell to appear to explain his failure to deliver it.  Moneybarn’s application to the court for this was made on 1st August 2016.  The case was continued until 14 September 2016 although no date had been set for Bell’s appearance.

Warrant for Arrest

At the 14th September hearing Moneybarn’s lawyers asked the Court for Bell to be apprehended and imprisoned for a period not in excess of six months.  Their legal justification for this was the little used Law reform (Miscellaneous Provisions) (Scotland) Act 1940 (Section 1).  This basically provides that a person cannot either be apprehended or imprisoned arising out of a failure to do something which a court has ordered except in accordance with the provisions of this Act.  The Act provides that if there is such a failure and the Court is satisfied that a person has ‘wilfully refused’ to comply with a court order then imprisonment can be ordered for a period not exceeding six months.

What did the Court Decide?

Thankfully for Bell the Sheriff refused Moneybarn’s motion explaining that whilst the Act did contain such sanctions it was up to the Court to use its discretion whether they should be used.  Civil imprisonment for such matters was ‘likely to be rare’.  Indeed Sheriff Kelly said:  “There might be instances where sentence of imprisonment would be appropriate as an effective sanction in respect of certain decrees to perform acts but nothing was advanced to justify such a step in these circumstances.  The conditional sale agreement has a number of respects which are of the nature of a civil debt and in Scotland since 1880, with certain exceptions such as for aliment, no person may be apprehended or imprisoned on the account of such a debt:  Debtors (Scotland) Act 1880, Section 4.  The retention of title to the car by the finance company does provide (them) with the right to seek an order for delivery”.  The Sheriff then said that just because failure to comply with the Court’s order did allow for the possibility of imprisonment this generally would not be warranted.

Conclusion

The Sheriff’s decision is, of course, eminently sensible.  For him to have decided otherwise would no doubt have led to a successful appeal by Bell.

However in the current environment of ‘Treating Customers Fairly’, where this attitude is encouraged to be in a creditor’s ‘DNA’, one wonders why such an application was made by the creditor.

No doubt the ‘threat’ of imprisonment could well “act as spur to payment”.  However it would be likely that in the event of the court having granted the warrant for apprehension it is more than likely that the Scottish Parliament would swiftly enact legislation to prevent such applications being made in the future.

Stephen Cowan, Director, Yuill & Kyle