Ranking of pledges etc. 30 58 Ranking (1) Subject to the provisions of this section and of any other enactment, the priority in ranking of— (a) any two pledges, or (b) a pledge and a right in security other than a pledge, 35 is determined according to their creation, the earlier created having priority over the later. 35 Moveable Transactions (Scotland) Bill Part 2—Security over Moveable Property Chapter 1—Pledge (2) Where a provider grants two or more statutory pledges over property which is not the property of the provider at the time the pledges are granted, the priority in ranking of the pledges is determined according to the dates on which and times at which they are registered effectively (see sections 89 and 90), the earlier having priority over the later. 5 (3) Where property is subject both to a pledge and to a security arising by operation of law, the security arising by operation of law has priority over the pledge. (4) The priority in ranking of a pledge is the same irrespective of whether the secured obligation is an obligation owed or is an obligation which will or may become owed. (5) As between any two pledges, or as between a pledge and a right in security other than 10 a pledge, the secured creditors or (as the case may be) the secured creditor and the 1 holder of that other right may set out in a written agreement— (a) that there is no priority in ranking, or (b) that any priority in ranking is to be determined in a way other than would be the case in the absence of such an agreement. 15 (6) An agreement under subsection (5)— (a) has effect only as between the parties to it and their successors, and (b) is not registrable in the register. 59 Amendment of Companies Act 1985 and Insolvency Act 1986 Both in section 486(1) of the Companies Act 1985 and in section 70(1) of the Insolvency 20 Act 1986, in the definition of “fixed security”— (a) the words from “a heritable security” to “1970” become paragraph (a) of the definition, and (b) after that paragraph insert “; or (b) a statutory pledge within the meaning given by section 111(1) of the 25 Moveable Transactions (Scotland) Act 2023;”. 60 Effect of diligence on pledge (1) Subsection (2) applies where diligence is executed in respect of property which is, or any part of which is, encumbered by a pledge. (2) The pledge has, in respect of the property or (as the case may be) the part, priority in 30 ranking over the diligence except in relation to any part of the secured obligation which consists of a sum— (a) advanced after execution of the diligence, and (b) not required to be advanced by— (i) a contractual agreement entered into before execution of the diligence, or 35 (ii) an undertaking entered into before execution of the diligence. (3) Subsection (4) applies where a pledge is created over property in respect of which, or in respect of part of which, diligence has been executed. (4) The diligence has, in respect of the property or (as the case may be) the part, priority in ranking over the pledge. 36 Moveable Transactions (Scotland) Bill Part 2—Security over Moveable Property Chapter 1—Pledge Enforcement of pledge 61 The expression “pledge” in sections 62 to 75 In sections 62 to 75, the expression “pledge” does not include a pledge as defined in section 189(1) of the Consumer Credit Act 1974 (that is to say, does not include a 5 pawnee’s rights over an article taken in pawn). 62 Enforcement of pledge: general (1) A pledge is enforceable only in accordance with the provisions of this Part. (2) A pledge may be enforced— (a) in such circumstances as are agreed between the provider and the secured creditor, 10 or 1 (b) subject to any such agreement, where there has been a failure to perform the secured obligation. (3) Any agreement under subsection (2)(a) must be in writing. (4) In enforcing a pledge, a secured creditor must conform to reasonable standards of 15 commercial practice. (5) Subsection (2) is subject to sections 53(3), 63 and 64. 63 Pledge enforcement notice (1) Before taking any other steps to enforce a pledge, the secured creditor must serve a notice in, or as nearly as may be in, the form prescribed for the purposes of this 20 subsection (to be known as a “pledge enforcement notice”) on— (a) the provider, (b) the debtor in the secured obligation (if a person other than the provider), (c) the holder of any other right in security over all or part of the encumbered property, (d) any creditor who has executed diligence against all or part of the encumbered 25 property, and (e) in the case of a statutory pledge over property which is capable of being occupied, any occupier of all or part of the property (if a person other than the provider). (2) But— (a) paragraph (c) of subsection (1) is to be disregarded if the secured creditor does 30 not know, and cannot reasonably be expected to know, of the right in security mentioned in that paragraph, and (b) paragraph (d) of that subsection is to be disregarded if the secured creditor does not know, and cannot reasonably be expected to know, of the diligence executed as mentioned in that paragraph. 35 (3) If, by virtue of subsection (1)(e) of section 87 of the Consumer Credit Act 1974, a default notice must be served on the provider, the requirements of that section and of section 88 of that Act must be satisfied before a pledge enforcement notice is served. 37 Moveable Transactions (Scotland) Bill Part 2—Security over Moveable Property Chapter 1—Pledge (4) The Scottish Ministers may by regulations modify this section so as to specify— (a) further persons, or descriptions of persons, on whom the secured creditor must serve a pledge enforcement notice (being persons who have statutory duties in relation to the provider’s estate), 5 (b) cases when the requirement to serve a notice on a person specified by virtue of paragraph (a) is to be disregarded. 64 Whether court order required for enforcement (1) A court order is required for enforcing a pledge only— (a) as mentioned in subsections (2) and (3), 10 (b) where taking possession of, or steps in relation to, encumbered property in 1 accordance with section 65(3) or (4). (2) In a case where the provider of a pledge is an individual, a court order is required for enforcing the pledge if the provider is a sole trader and enforcement is against property used wholly or mainly for the purposes of the provider’s business. 15 (3) A court order is required for enforcing a statutory pledge in respect of property which is the sole or main residence of an individual unless, after the pledge becomes enforceable by virtue of section 62(2), the following persons agree in writing to its being enforced without such an order— (a) the secured creditor, 20 (b) the provider, and (c) the individual whose sole or main residence is the property in question (if a person other than the provider). (4) The court is not to grant an order required by subsection (3) unless satisfied that enforcement is reasonable having had regard to all the circumstances of the case. 25 (5) Those circumstances include— (a) the nature of, and reason for, the default by virtue of which authority to enforce is sought, (b) whether the person in default has the ability to remedy the default within a reasonable time, 30 (c) whether the secured creditor has done anything to help the person in default remedy the default, (d) where it is, or was, appropriate for the person in default to take part in a debt payment programme...