Scottish Court of Session Decisions

Andrew Aiton White, whose estates were sequestrated in June 1885, presented a petition for discharge in October 1892.

The petitioner stated that he was “now desirous of being finally discharged of all debts due by him before the date of the said sequestration, in terms of the 146th of the Bankruptcy (Scotland) Act 1856.… That no dividend has been paid out of the estates of the petitioner, but this has arisen from circumstances for which he cannot justly be held responsible. That the petitioner believes that the trustee left this country some time ago, and that if alive he is now resident in America or elsewhere abroad. The petitioner has made extensive anxious inquiries with the view of procuring his address, but he has hitherto been unsuccessful. He has, therefore, been unable to obtain from the trustee the statutory report specified in the said 146th section of the Bankruptcy (Scotland) Act 1856.”

The petitioner craved the Court to appoint the petition to be intimated on the walls and in the minute-book, and to be served edictally on David Rollo, the trustee on the petitioner's sequestrated estates, and to ordain him to lodge answers if so advised within eight days; thereafter to ordain the said trustee within six days to prepare and deliver to the petitioner a

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report with regard to the conduct of the petitioner, and in the event of his failing to do so to remit to the Accountant of Court, or other fit person, to supply a report in lieu of that falling to be furnished by the trustee, and on such report being lodged to appoint the petition to be intimated by advertisement in the Edinburgh Gazette, and by circular posted to each of the creditors on the petitioner's sequestrated estates, and after the necessary induciœ and procedure to find the petitioner entitled to his discharge, and to discharge him.

On 18th October the Court ordered the petition to be intimated on the walls and in the minute-book, and to be served on the commissioners in the sequestration, and edictally upon the trustee. No answers were lodged, and on 3rd November the Court pronounced this interlocutor:—“The Lords, in respect of the statements as to the absence of the trustee from this country, and the petitioner's inability to obtain a report from him, remit to the Accountant of Court to inquire and report on the matters set forth in the petition.”

The report of the Accountant was to the following effect—“The trustee had disappeared, communications to him from the Accountant being returned through the Post Office marked ‘not found.’” The Accountant had called upon the bankrupt's agent to exhibit to him the sederunt book, but he was informed that it could not be found. The sequestration process, however, showed that in the state of affairs submitted by the trustee to the creditors the bankrupt's assets were stated at £21, 19s. 4d., and his liabilities at £326, 11s. 8d., that the trustee had realised £15, 19s. 4d., which was insufficient to meet the law expenses and the trustee's commission, and that no dividend had been paid to the creditors. “In the circumstances the Accountant reports that there is no evidence that the bankrupt has failed to comply with the provisions of the Bankruptcy Act, or that he has fraudulently concealed any part of his estate.… From the information before him the Accountant is unable to say whether or not the failure to pay 5s. per £ has arisen from circumstances for which the bankrupt can justly be held responsible.”

On 13th December 1892 the Court pronounced this interlocutor—“The Lords having resumed consideration of the petition, with the report by the Accountant of Court, and heard counsel thereon, Remit to the said Accountant to report with regard to the conduct of the petitioner, and as to how far he has complied with the provisions of the Bankruptcy (Scotland) Act 1856, and in particular, whether the petitioner has made a fair discovery or surrender of his estate, and whether he has attended the diets of examination, and whether he has been guilty of any collusion, or whether his bankruptcy has arisen from innocent misfortunes or losses in business, or from culpable or undue conduct.”

The Accountant thereupon reported as follows—“So far as there is evidence, the bankrupt complied with the provisions of the Bankruptcy (Scotland) Act 1856; there is nothing to enable the Accountant to form an opinion as to whether or not the bankrupt made a fair discovery and surrender of his estate; the trustee, from his report to the second meeting of creditors, appears to be satisfied that he had done so. From the state of affairs, signed by him as relative to his statutory oath, it appears that the bankrupt attended the diet of examination. There is nothing to enable the Accountant to report as to whether or not the bankrupt was guilty of collusion, or as to the cause of his bankruptcy; but so far as there is any evidence, the trustee appears to have been satisfied with the bankrupt's conduct in both respects.”

Section 146 of the Bankruptcy Act 1856 provides, inter alia, that a bankrupt may present a petition for his discharge “on the expiration of two years from the date of the deliverance actually awarding sequestration without any consents of creditors; and the Lord Ordinary or the sheriff, as the case may be, shall, in each of the cases aforesaid, order the petition to be intimated in the Gazette and to each creditor; and if, at the distance of not less than twenty-one days from the publication of such intimation, and on evidence being produced of concurrence as aforesaid, where such concurrence is required, there be no appearance to oppose the same, the Lord Ordinary or the sheriff, as the case may be, shall pronounce a deliverance finding the bankrupt entitled to a discharge; but if appearance be made by any of the creditors or by the trustee, the Lord Ordinary or the sheriff, as the case may be, shall judge of any objections against granting the discharge, and shall either find the bankrupt entitled to his discharge, or refuse the discharge, or defer the consideration of the same for such period as he may think proper, and may annex such conditions thereto as the justice of the case may require: Provided that … it shall not be competent for the bankrupt to present a petition for his discharge, or to obtain any consent of any creditor to such discharge, until the trustee shall have prepared a report with regard to the conduct of the bankrupt, and to show how far he has complied with the provisions of this Act, and in particular, whether the bankrupt has made a fair discovery and surrender of his estate, and whether he has attended the diets of examination, and whether he has been guilty of any collusion, and whether his bankruptcy has arisen from innocent misfortunes or losses in business, or from culpable or undue conduct.” …

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