LA v Royal Bank of Scotland [1977] ScotCS CSIH_1 (24 February 1977)

LA v Royal Bank of Scotland [1977] ScotCS CSIH_1 (24 February 1977)

An arrestment not followed by a decree of furthcoming is not 'effectually executed diligence' within the meaning of section 15(2)(a) of the Companies (Floating Charges and Receivers) (Scotland) Act 1972. Therefore, the rights of a receiver appointed under a floating charge prevail over those of an arrester who has not obtained a decree of furthcoming.

Citation
[1977] ScotCS CSIH_1
Parties
Pursuer/reclaimer: Lord Advocate (for and on behalf of the Commissioners of Inland Revenue); Defender/arrestee: Royal Bank of Scotland Limited; Defender/respondent: Receiver (third-named defender)
Jurisdiction
Scotland
Judgment Date
24 February 1977
Procedural Posture
Civil (company Law, Diligence) / Reclaiming Motion (appeal) From Lord Ordinary to Inner House, Court of Session
Outcome
Reclaiming motion refused; action dismissed; interlocutor of Lord Ordinary affirmed.
Legal Topics
Floating Charges, Receivership, Diligence (arrestment and Furthcoming), Priority of Security Interests, Interpretation of Companies (floating Charges and Receivers) (scotland) Act 1972
Company Law Insolvency Law Banking Law Scots Law Floating Charges Receivership Diligence (arrestment and Furthcoming) Priority of Security Interests +1 more

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Parties

Lord Advocate (for and on behalf of the Commissioners of Inland Revenue)

Pursuer/reclaimer

Royal Bank of Scotland Limited

Defender/arrestee

Receiver (third-named defender)

Defender/respondent

Procedural Posture

Civil (company Law, Diligence) / Reclaiming Motion (appeal) From Lord Ordinary to Inner House, Court of Session

Legal Issues

  1. 1 Whether an arrestment not followed by a decree of furthcoming constitutes 'effectually executed diligence' under section 15(2)(a) of the Companies (Floating Charges and Receivers) (Scotland) Act 1972, so as to prevail over the rights of a receiver appointed under a floating charge.

Ratio Decidendi

An arrestment not followed by a decree of furthcoming is not 'effectually executed diligence' within the meaning of section 15(2)(a) of the Companies (Floating Charges and Receivers) (Scotland) Act 1972. Therefore, the rights of a receiver appointed under a floating charge prevail over those of an arrester who has not obtained a decree of furthcoming.

Court Disposition

Reclaiming motion refused; action dismissed; interlocutor of Lord Ordinary affirmed.

Orders

  • Action for furthcoming dismissed.
  • Receiver entitled to ingather funds arrested.