Scottish Court of Session Decisions

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URL: http://www.bailii.org/scot/cases/ScotCS/1892/29SLR0382.html
Cite as: [1892] ScotLR 29_382, [1892] SLR 29_382

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SCOTTISH_SLR_Court_of_Session

Page: 382↓

Court of Session Inner House First Division.

[Sheriff of Lanarkshire.

Tuesday, February 23. 1892.

29 SLR 382

Steele and Others

v.

Strathie.

Subject_1Bankruptcy
Subject_2Sequestration
Subject_3Meeting of Creditors Called by Commissioner “with Notice to the Trustee”
Subject_4Notice not Timeous — Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. cap. 79), sec. 98.
Facts:

The Bankruptcy (Scotland) Act 1856, by section 98, provides that “any commissioner, with notice to the trustee, may at any time call a meeting of the creditors.” A commissioner called a meeting by a notice in the Gazette, which is published in the evening. Upon the afternoon of the day of publication he sent notice to the trustee by a registered letter, which was not delivered until the following morning.

Held that the requirement of the statute had not been complied with, as the notice to the trustee had not been timeously given.

Headnote:

The Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. cap. 79) provides by section 98 that “any commissioner, with notice to the trustee, may at any time call a meeting of the creditors.” …

Edward Cruickshank, one of the commissioners in the sequestration of R. S. Lang, manufacturer, Glasgow, inserted a notice, dated October 26th 1891, in the Edinburgh Gazette, published on the evening of October 27th, calling a general meeting of creditors to be held on November 4th 1891, “to, if so resolved, remove the trustee, David Strathie, C.A., Glasgow, from office.”

Upon the afternoon of October 27th he sent a registered letter addressed to the trustee at his office giving notice of having called said meeting. When the postman went his rounds it was after office hours, and the letter was not delivered to Mr Strathie until the next morning.

The meeting of creditors was held upon November 4th, and a resolution for the removal of the trustee was carried.

The trustee appealed to the Sheriff to have the resolution recalled, and upon 9th December 1891 the Sheriff-Substitute ( Erskine Murray), for reasons assigned in his note, recalled the resolution complained of.

“ Note.—The Bankruptcy Act 1856 provides that a majority of creditors present at any meeting duly called for the purpose may remove a trustee. Section 98 provides that ‘any commissioner, with notice to the trustee, may at any time call a meeting of the creditors.’ In the present case one of the commissioners sent to the Gazette a notice, dated 26th October, to be published in the Gazette of 27th October, calling a meeting for 4th November. The Gazette was published on the 27th between 6 and 7 p.m.. On the afternoon of the 27th the same commissioner sent by registered letter a notice to the trustee, addressed to his place of business. It was not delivered till 10 a.m. on the 28th, as, being registered, it could not be delivered after business hours on the 27th, the trustee's office being then shut.

In these circumstances the Sheriff-Substitute must hold that notice to the trustee was not given till the 28th. But as the advertisement in the Gazette was published on the evening of the 27th, it must also be held that the intimation to the trustee did not precede, nor was even simultaneous with, but was subsequent to the date of the calling of the meeting, even if that date be taken to be the date of the publication of the Gazette. Still more so would this be the case were the date of the calling of the meeting to be held to be the date annexed to the notice in the Gazette, being that of the day previous, the 26th October.

In these circumstances the Sheriff-Substitute
Page: 383↓
cannot hold that the provision of the 98th section, that a commissioner, with notice to the trustee, may at any time call a meeting of creditors, has been complied with. That provision seems necessarily to imply that the notice must be, if not precedent to, at the very least simultaneous with the calling of the meeting. Indeed, the former of the two interpretations seems the most reasonable. But certainly it cannot be said that a commissioner is within his statutory power if he calls a meeting not only without having given previous notice, but without even giving simultaneous notice to the trustee. He is clearly not at the time when he calls the meeting calling it with notice to the trustee.

The above views are strongly confirmed by the judgment of the Second Division on 11th March 1884, adhering to a judgment of Lord Kinnear in the case of M'Fadyean (Todd's Trustee) v. Campbell, 21 S.L.R. 479. In that case two of the Judges held that the notice to the trustee must precede the calling of the meeting, while the Lord Justice-Clerk and the Lord Ordinary considered that simultaneous notice might do.”

Robert Steele, manufacturer, Leeds, and others, creditors in the sequestration, appealed to the First Division of the Court of Session against the deliverance of the Sheriff-Substitute, and argued—The letter containing the notice was duly posted, and would have been delivered to the trustee the same evening as the notice appeared in the Gazette had he been at his office. That would have been sufficient—see Lord Kinnear's opinion in the case of M'Fadyean, referred to by the Sheriff-Substitute. If the trustee absented himself from his office, he must just suffer any inconvenience thereby occasioned. The commissioner was not bound to know the hours he kept, and arrange the delivery of letters accordingly. He had taken an unnecessary precaution to ensure that he received the notice by registering the letter.

Argued for the respondent—The precaution taken necessarily occasioned delay of delivery until the next day. Posting was not enough. Notice to the trustee must be received by him at latest simultaneously with the appearance of the Gazette, and probably, looking to the opinions of the Lord Young and of Lord Craighill in M'Fadyean's case, before the Gazette notice appeared. The trustee was not expected to be in his office after ordinary business hours.

At advising—

Judgment:

Lord President—The 98th section of the Bankruptcy Act of 1856 enables a commissioner to call a meeting of the creditors, but that power is qualified by the words, “with notice to the trustee.” I take it as quite clear that these words qualify the call, making it a good call if “with notice,” and a bad one if without notice.

Mr Watt told us that the calling of the meeting was done by a Gazette notice, and the question before us is, whether that Gazette notice took place with or without notice to the trustee? The Gazette containing the notice was published on the evening of the 27th of October, and the trustee did not de facto receive notice until the 28th. Prima facie, therefore, the Gazette notice was bad. The trustee received notice posterior to the appearance of the notice in the Gazette, and that could not have the effect of rehabilitating the Gazette notice. But then it was argued that means had been taken to give the trustee notice upon the evening of the 27th. At best that was only giving him notice at the same time as the notice appeared in the Gazette. Now, what were the means taken to apprise the trustee of what was going to appear in the Gazette? A registered letter was despatched upon the afternoon of the 27th, to be placed in the hands of Mr Strathie himself, and if he was not found, delivery would necessarily be delayed until the following day. Steps were taken therefore to ensure that the delivery should be personal, but in such a way as to render postponement of delivery possible. De facto, then, the trustee did not receive notice until the 28th, and that will not suffice to validate the Gazette notice.

Mr Watt argued that we should decide the matter upon what is before us. Well, the Sheriff-Substitute sets out in a distinct narrative that the letter “could not be delivered after business hours on the 27th, the trustee's office being shut.” I take it that when the postman came to the office it was after business hours, when the trustee might reasonably be expected to be away. No offer was made to displace that fact by evidence, and indeed I doubt if any evidence would suffice to make up for the commissioner not giving notice before the appearance of the notice in the Gazette.

I am of opinion that we should dismiss the appeal.

Lord Adam—The question here depends upon the construction of the 98th section of the Bankruptcy Act, which provides that “any commissioner, with notice to the trustee, may at any time call a meeting of the creditors.” In this case the appellant, who is a commissioner on a sequestrated estate, called such a meeting, and gave notice to the trustee, but the question is, whether that notice was given in time? As matter of fact the Gazette notice appeared upon the evening of the 27th of October, and it is admitted that in point of fact notice to the trustee did not reach him until the next morning. Therefore, if there is nothing to make this case exceptional, it is clear that the notice to the trustee was given after the publication of the Gazette—that is, after the calling of the meeting—and accordingly bad. The question of whether the calling of the meeting simultaneously with giving notice to the trustee is effectual was raised in the case referred to. But a trustee's receiving notice at the very moment of the publication of the Gazette

Page: 384↓

is so unlikely to occur that I think the consideration of such a possibility would be unprofitable discussion. In any case, notice to the trustee must not be after publication of the Gazette. It will be time enough to consider the question of simultaneity when it occurs. Here the notice was given after the Gazette notice appeared, and that, I think, is sufficient for the decision of this case.

But then it was said that although the actual delivery of the letter containing the notice was not until the 28th, that was owing to the trustee's own actings, and it was said that if the trustee had happened to be at his office when the registered letter was brought the notice would probably have been in time. The facts however were different. The effect of registering the letter was to make it necessary that it should be delivered to him personally, and as he had left his office that was postponed. There was nothing here unusual in the actings of the trustee. Had the letter been brought at ten o'clock in the forenoon, and the office had then been found shut, it might have made a difference. There was no such case here, and I agree with your Lordship in thinking that the appeal should be dismissed.

Lord Kinnear—I agree with Lord Adam that the Act cannot mean notice is to be given to the trustee simultaneously with notice to the world, and that was never seriously suggested in the argument or in the previous case. The only thing there suggested was that notice might have been sufficient if given at the same time as the publication of the Gazette, and that if it so happened that might be enough. I thought at the time that there was a great deal to be said in support of the stricter view expressed by Lord Young and Lord Craighill, to the effect that that would not be enough, but that notice to the trustee must precede the notice calling the meeting. It is not necessary to consider that question here, and it is enough to say that the notice to the trustee must not be later than that calling the meeting. The fact here is that the meeting was called by a notice in the Gazette upon the 27th, and the notice was not given to the trustee until the 28th, therefore the notice to the trustee was later than that calling the meeting. It was said that the failure to give timeous notice was owing to the absence of the trustee from his place of business. I think we cannot give effect to that view implying that it is the duty of a man of business to be at his office at all hours. Where the duty of giving notice is sufficiently discharged by sending a letter through the post, it may be enough if the letter is addressed to the office of the person receiving the notice, without the necessity of proving that the addressee was at home, or did not receive it through failure to open his letters. But here the precaution was taken of sending a registered letter, to be delivered only to the addressee personally, with the inevitable consequence that if it was after business hours delivery would be postponed until next morning. I concur in thinking the appeal should be dismissed.

Lord M'Laren was absent.

The Court dismissed the appeal.

Counsel:

Counsel for Appellant— Watt. Agents— Clark & Macdonald, S.S.C.

Counsel for Respondent— Salvesen— Crabb Watt. Agents— Simpson & Marwick, W.S.
1892