LA v Royal Bank of Scotland

I now turn to examine the arguments of the parties as to the meaning to be given to the words in section 15, subsection 2, i.e. "effectually executed diligence on all or any part of the property of the company" in the light of the pronouncements above referred to.

It appears therefore that in certain cases for example where the property is clearly of less value than the debt the decree of furthcoming will operate as a transfer of the title in the goods, but not otherwise. It seems to me however, that the effect of the decree will very much depend on the terms in which it is pronounced, but it cannot be said generally and in all cases that a decree of furthcoming will operate as a transfer of the title to the goods from the common debtor to the arrester.

The pursuer reclaimed and the case was heard before the First Division (without Lord Avonside) on 28th and 29th October 1976 and 13th and 14th January 1977.

The question for decision in the action was and is whether the Inland Revenue as arresters in the execution are entitled to decree of furthcoming in respect of the fund arrested notwithstanding the appointment of the receiver by the holders of the floating charges created in 1972. It will be understood that the case is in no way concerned with the different questions which might arise where an arrestment proceeded not only the appointment of a receiver but the creation of the relevant floating charge under which he was appointed.

The statutory provisions out of which the question for determination arises are contained in the Companies (Floating Charges and Receivers) (Scotland) Act 1972. This Act did two things.