Scottish Court of Session Decisions

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URL: http://www.bailii.org/scot/cases/ScotCS/1872/09SLR0393.html
Cite as: [1872] ScotLR 9_393, [1872] SLR 9_393

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SCOTTISH_SLR_Court_of_Session

Page: 393↓

Court of Session Inner House First Division.

Saturday, March 16. 1872.

9 SLR 393

Scott and Campbell, Appellants, (In Seqr. Thomas Couper).

Subject_1Bankrupt
Subject_2Discharge
Subject_3Consent of Creditors
Subject_419 and 20 Vict. c. 79, § 146.
Facts:

Held that the clauses of the 146th section of the Bankruptcy Act, which require—(1) that the trustee shall prepare a report upon the conduct of the bankrupt before it shall be competent for the bankrupt to present a petition for his discharge, or to obtain any consent of any creditors to such discharge, and (2) that “such report shall be produced in the proceedings for the bankrupt's discharge, and shall be referred to by its date, or by other direct reference in any consent to his discharge,”—are imperative, and not directory merely. And that where the consents had preceded the trustee's report, the bankrupt's discharge could not be granted.

Headnote:

This was an appeal from the Sheriff-court of Edinburgh (Sheriff-Substitute Hallard) in a petition for the discharge of a bankrupt after the lapse of eighteen months from his sequestration. The bankrupt had obtained a report from the trustee in his sequestration, and also the consent of a majority of his creditors in number and value.

The Sheriff-Substitute found the petitioner entitled to discharge.

Two of the creditors, Thomas Scott and Robert Campbell, being dissatisfied with this deliverance, appealed.

They objected—(1) The creditors' consents were given before the report of the trustee was prepared—contrary to the 146th section of the statute. (2) The creditors' consents do not refer to the trustee's report, as required by the said section. (3) The trustee's report is not properly dated, nor referred to distinctly in the proceedings for the bankrupt's discharge.

M'Kechnie, for the appellants, referred to Dickson's Trustees v. Campbell, 5 Macph. 767.

At advising—

Judgment:

Lord President—I think the objection fatal, and cannot at all acceed to the contention of the

Page: 394↓

bankrupt's counsel, that the clause regulating the consents of creditors is a direction or directory provision merely. It is distinctly imperative, both from the words used in the clause itself, and from the objects which, it is apparent throughout the whole, were in the view of the Legislature. It is the policy of this statutory enactment, and it is a sound one, that the bankrupt shall not be allowed to deal or transact with his creditors with a view to his discharge, until the trustee's report has been laid before them. This is set out distinctly and imperatively in the clause referred to. And the reason for requiring that the creditors' consents shall bear distinct reference to the report is to make sure that the report shall have been previously made, in accordance with the policy and intention of the Legislature in framing this statute. I think we must therefore alter; and remit to the Sheriff to refuse the petition,

The other Judges concurred.

Solicitors: Agent for the Appellant— William Black, S.S.C.

Agents for the Bankrupt— Menzies & Cameron, S.S.C.

1872

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