Scottish Court of Session Decisions

James Wyllie Guild, chartered accountant, Glasgow, was appointed debt commissioner under the Roads and Bridges Act 1878 for the district which included, among others, the counties of Lanark and Renfrew. After a lengthened inquiry he valued, pursuant to the provisions of the said

Page: 825↓

statute, certain debts due by the Bathgate and Airdrie Road Trustees, and upon 12th December he issued his decision thereupon.

The terms of the decision were as follows: — “Finds that the debt due to the Most Noble William Alexander Louis Stephen Duke of Hamilton, amounted, as at 1st June 1882, to the sum of £253, 3s. 4 1 2d. of principal, with £11, 8s. 3d. of interest due thereon. Finds, estimates, and declares the value of such debt, as at the said date, to be £264, 11s. 7 1 2d. Finds that the debts due to the other preferable creditors named in the subjoined schedule amounted, as at first June 1882, to the sum of £37,258, 5s. of principal, with £11,866, 13s. 9d. of interest due thereon. Finds, estimates, and determines the value of the debts of the said preferable creditors, as at the said date, to be the sums respectively stated in the last column of said schedule, amounting in whole to the sum of £L9,342, 18s. 10d. Reserves to the parties liable for the said debts as valued, to require, before granting certificates of debt, exhibition of valid titles to the debts. Finds that the debt due to the Edinburgh and Bathgate Railway amounted, as at 1st June 1882, to the sum of £4500 of principal, with £5481, 4s. 11d. of interest due thereon; but inasmuch as the debts preferable to that of the said company cannot be met in full, there is no surplus available for the said company's debt, and he finds and determines that such debt is of no value. Finds the County Road Trustees for the counties of Lanark and Linlithgow, and the burghs of Airdrie and Bathgate, under reservation of the said parties' rights of relief inter se, liable to the said preferable creditors in the expenses incurred by them in this valuation: Appoints accounts thereof to be lodged within two weeks from this date, and remits the same to the Auditor of the Court of Session to tax and report, reserving to the debt commissioner to modify said expenses if he sees cause hereafter, and to allocate the same among the parties, if called upon to do so: Reserving also the question of the debt commissioner's own remuneration for future decision.”

The Duke of Hamilton and others objected to the reservation by which the commissioner reserved “to the parties liable for the said debts as valued, to require, before granting certificates of debt, exhibition of valid titles to the debts.”

The objectors required the commissioner to state the facts of the case, the question of law, and his decision, in a Special Case, as provided by section 65 of the Roads and Bridges Act of 1874.

The commissioner accordingly stated the present Special Case. He stated that the grounds upon which he proceeded in making the reservation mentioned above were contained in a note appended to the draft of his decision, and were as follows:—“The County Road Trustees called for exhibition of the claimants' titles, and the debt commissioner ordered them to be produced, as he concurred in the advisability of any questions as to title being, if possible, settled before a decision was given. But when the titles were produced, in every case the constitution and resting-owing of the debt was denied, and in no single instance was the title of the claimants admitted. On consideration, the debt commissioner did not feel called on to pursue a detailed investigation into these matters. He is satisfied, from the revised list or state of debts which was made up and certified in terms of the Act of 1878, the original assignations produced, the minute-books of the Road Trustees, the report of Mr John Graham, C. A., which was prepared under the instructions of the joint commissioners of the County Roads of Lanarkshire and Renfrewshire appointed to deal with the matter of the road debts of these counties, as well as from the pleadings of parties, the titles produced, and the fact of interest having been paid down to the time when the Act of 1878 was adopted, that both preferable and postponed debts do affect the road trust in question, to the extents stated in the draft decision. It is possible that in some cases the claimants may not have produced a complete legal title to the debts they claimed, but on the grounds above stated he holds there is prima facie proof that the several debts claimed do subsist, so as to enable him to deal with and value them, leaving the parties to settle the legal question of title when certificates of debt are required from the road authorities.”

The question of law was—“Whether the reservation made by the debt commissioner in his decision, as above quoted, should have been so made? or, Whether the debt commissioner is bound to examine and decide upon the personal titles of the respective creditors of the debts claimed by them?”

Argued for the Duke of Hamilton and others—The debt commissioner was intended by the Act to deal with questions of title. The person to be appointed to the office of debt commissioner was to be a man skilled in “law and accounts,” and the questions in the present case fell under these two categories. It was impossible to determine what amount was due to each creditor until the number of creditors was fixed and the total amount of debt determined. The reservation made by the commissioner should be deleted, and the matter remitted to him to proceed with under section 65.

Argued for the Road Trustees of Lanark and Linlithgow—The constitution and subsistence of these debts was not disputed. The commissioner's duty primarily was to make out a list of debts, along with the names of parties claiming to be creditors, to ascertain and value the debt, and to deliver his determination thereupon. He was not bound to look into the titles of the respective creditors. No such duty was imposed upon him by the statute.

At advising—

Mr Wyllie Guild in his decision of 12th December 1884, already referred to, valued certain preferable debts due by the Bathgate and Airdrie Road Trustees, at the sums stated in the schedule to his decision.

The said Road Trustees expressed themselves as dissatisfied with this decision on the point of law after mentioned, and the present Special Case was accordingly stated by the commissioner.

The following passages from the notes and the revised notes of the commissioner's proposed decision sufficiently explain the point in dispute between the parties:—“After a careful examination of the accounts, revenue, and expenditure, and general circumstances of the trust, the debt commissioner has valued the remaining preferable debts at 7s. 6d. per pound. There was, in his opinion, no prospect of these debts ever being paid in full, and he is satisfied that the certificates of debt which the creditors will receive, and which will bear four per cent. interest, will be found full and fair substitutes or equivalents for the debts and security as formerly existing. Assuming that an average rate of two and a-half per cent. interest could have for some time longer been paid on the principal sum of the debt, it could not be valued at more than twenty years' purchase, probably even considerably less, looking to the uncertain and fluctuating nature of the road revenue, which was the only security for the interest, and for the final payment, while the return of four per cent. on the certificates of debt, secured as it will

Page: 827↓

be, in the most undoubted manner, by the assessments authorised by the Act, will be marketable at probably twenty-five years' purchase.” The creditors claiming, and the road trustees, represented against the debt commissioner's proposed decision, and after further procedure he issued revised notes by which he informed the parties that he had added five per cent. to his former valuation of 7s. 6d. per pound, and gave the following reasons for doing so:—“In reviewing his valuation he has had his attention prominently called to the fact that in place of the debts as valued, or the interest thereon, being payable by only one party, as heretofore, they may be eventually found payable by various different local authorities, thus causing much more trouble and expense in collection of principal and interest than under the former system. As the commissioner is directed to take into consideration ‘every circumstance which might, in his opinion, reduce, enhance, or in any way affect the value of the debts,’ he considers the change of debtors is one which does affect the value, and he has deemed it right to add five per cent. to his former valuation of 7s. 6d. per pound, thus making the value of the principal and accumulated interest 7s. 10 1 2d. per pound.”

The County Road Trustees of Lanarkshire and Linlithgow considered the decision of the commissioner erroneous in point of law in adding five per cent. in respect of the change of debtors.

The question of law was—“Whether the change of debtors from one body to over twenty, and the consequent sub-divisions of the principal debt as valued, are circumstances which should be taken into account by the debt commissioner in making his valuation?”

Argued for Lanark and Linlithgow Road Trustees—The five per cent. added by the commissioner was not warranted by the statute. Expense of collection caused by change of debtors was not provided for by the Act, and could not be imposed by the commissioner. Expense of collection should render the debt less valuable, yet the commissioner had dealt with it as if it thereby was worth more.

Argued for the Duke of Hamilton and others. —The intention of the Legislature in this statute was to be considered. It was not intended that the creditor should be put in a worse position by the change of debtors than he was before. If the expense of collecting his interest were increased, that was to be dealt with by the commissioner under sec. 65. The provisions of this section were very wide, and he was quite within it in what he had done.

At advising—