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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Mackenzie and Others, Petitioners [1872] ScotLR 9_478 (28 May 1872)
URL: http://www.bailii.org/scot/cases/ScotCS/1872/09SLR0478.html
Cite as: [1872] ScotLR 9_478, [1872] SLR 9_478
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SCOTTISH_SLR_Court_of_Session
Page: 478↓
Court of Session Inner House First Division.
Facts:
Held that the provisions of the Trusts (Scotland) Act, 1867, are not applicable to the case of paid trustees.
This was a petition at the instance of a majority of the creditors of the late firm of Mackenzie & Duncan, engineers in Bathgate, with concurrence of the surviving partner, and the representatives of the deceased one, praying the Court to appoint a trustee under the 12th section of the Trusts Act, 1867, which provides that “when trustees cannot be assumed under any trust-deed,” the Court may, upon the application of any party having interest in the trust-estate, “appoint a trustee or trustees under such trust-deed, with all the powers incident to that office.”
The trust-deed here was one for behoof of creditors, and provided for suitable remuneration to the trustee. It did not provide for the election or assumption of any new trustee, and the original trustee having died without having completed the winding-up of the estate, the present petition was brought before Lord Ormidale, who reported the case to the First Division, the question being whether the Act of 1867 included paid trustees.
R. V. Campbell for the petitioners.
The Court had considerable difficulty in deciding the question, from the vague terms of the Act. These were comprehensive enough to include all trusts whatsoever, but it was undoubted that the previous Trust Acts referred only to “gratuitous trustees,” and here these words were defined without being once used in the rest of the statute. On the whole, however, its other provisions seemed inconsistent with the idea of extending its operation to paid trustees.
The following is Lord Kinloch's opinion:—
The Acts 24 and 25 Vict. c. 84, and 26 and 27 Vict. c. 115, by which various powers and privileges were conferred on trustees, are clearly confined to the case of gratuitous trusts, for so they are declared, in so many words, to be. The Acts do not limit their provisions to mortis causa deeds; but it is plain that these were mainly in the view of the Legislature. It is in these that gratuitous trustees are chiefly found. And the whole powers and privileges conferred are such as are peculiarly appropriate to the case of mortis causa deeds.
The after Act of 1867, which is that now relied on, begins with an additional definition, inter alia, of the words “gratuitous trustees.” Such a definition would be altogether idle and out of place if the intention of the statute was to bring all trusts whatever within its operation, whether gratuitous or not. In the second section it is provided—“In all such trusts the trustees shall have power to do the following acts, when such acts are not at variance with the terms or purposes of the trust.” A power is then given to appoint paid factors and law-agents, to discharge trustees who have resigned, and to do certain other things. In section 3 the statute uses an apparently more general phrase, and says—“It shall be competent to the Court of Session, on the petition of the trustees under any trust-deed, to grant authority to the trustees to do any of the following acts.” Power is then given to sell, feu and let, borrow money on, or excamb the trust-estate. A variety of clauses follow, all prefaced with the same general introduction; amongst which is the 12th, now founded
Page: 479↓
The question now arises, whether these clauses are to be taken in their rigid literality—be held applicable to all trusts whatever—or whether they are to be restrained to the case of gratuitous trusts, such as were provided for by the two previous statutes, and, I clearly think, are exclusively provided for by the 2d section of the Act 1867. I am of opinion that the latter is the sound conclusion. I think the general phrase “any trust” is to be construed as referring to any trust of the same general description with those previously referred to. Fairly interpreting the statute, I think that no other construction can be put on it. The whole of the provisions are such as are fairly applicable to the case of gratuitous trusts, and these alone. I have particularly noticed those referring to the “beneficiaries” under the trust—so expressly called. I cannot fancy the Legislature having in view the case of trusts for creditors, such as is here involved. Still less can I suppose it intending to apply its provisions, without any discrimination, to that large body of varying trust-deeds which would be comprehended under the term “any trust-deed,” taken absolutely. I think the whole arrangements of the statute are different from what they would have been had it been contemplated to apply its provisions to all trusts whatever of any kind. The petitioners have not satisfied me that this unlimited construction is to be given to the Act. I hold, on the contrary, that it was exclusively intended to follow out into further ramifications the provisions of the two prior statutes as to gratuitous trust-deeds. I cannot therefore apply its provisions to the trust-deed now in question.
The Court accordingly directed the Lord Ordinary to refuse the petition as incompetent.
Solicitors: Agent for Petitioners— A. Kirk Mackie, S.S.C.