Scottish Court of Session Decisions

The estates of James L. Bannatyne were sequestrated in the Sheriff Court at Glasgow on 16th September 1902, and William Garth Thomson, Chartered Accountant in Glasgow, was confirmed trustee thereon by interlocutor dated 20th October 1902.

No petition under section 31 of the Bankruptcy (Scotland) Act 1856 was presented for recal of the sequestration.

On 3rd November the trustee presented a petition to the Sheriff, which narrated that part of the bankrupt's sequestrated estates consisted of the sum of £19, 1s. 3d., and of the sum of £10,7s.—which the bankrupt had in his possession in loose cash, but refused to hand over. The petitioner prayed the Sheriff “to ordain the said James L. Bannatyne to hand over the said sums to the petitioner, and failing his so doing within such period as your Lordship shall appoint, to grant warrant to officers of Court to apprehend the said James L. Bannatyne and commit him to the prison of Glasgow, there to be detained till he hand over the said sums of money, or till the further orders of the Court, and to find that he has forfeited the benefits of the Acts above mentioned” ( i.e., the Bankruptcy Acts).

The Sheriff-Substitute ( Guthrie) on 7th November pronounced an interlocutor in the following terms—“Having considered the petition, and heard the agent for the trustee, and the bankrupt personally, ordain the bankrupt within forty-eight hours to hand over to the petitioner the sums of money referred to in the petition.”

On 8th November the bankrupt lodged a note of appeal bringing this deliverance under review. The grounds of review stated by him were as follows—“(1) That the alleged trustee, the respondent, was irregularly appointed at an alleged meeting of creditors, which, although duly convened, was attended by one person only, to wit, the mandatory of the firm upon whose petition the estates of the appellant were sequestrated. (2) That no other creditors were present or represented at such alleged meeting, yet such mandatory purported to elect himself preses, to elect a trustee on the appellant's sequestrated estates, and to elect himself as a commissioner thereon, and further signed, as preses, the ‘minutes’ of the alleged meeting. (3) That the confirmation of the election of the respondent as trustee aforesaid, and the act and warrant in his favour, were obtained through misrepresentation, to wit, that a meeting of the appellant's creditors had been held. (4) That even if regularly elected and confirmed the petition should have been dismissed—( a) As incompetent under section 81 of the Bankruptcy (Scotland) Act 1856; ( b) as unauthorised by the creditors assembled at any meeting; and (c) as being unsupported by oral or written evidence that the moneys referred to in the petition were part of the bankrupt's (the appellant's) estate within the meaning of the Act, or held by bankrupt qua bankrupt, and not, as alleged by him, and as entered in his books of account, as trustee or agent for others.”

Section 31 of the Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. c. 79) makes provision for the bankrupt presenting a petition for recal of the sequestration within forty days after the date of the deliverance awarding it, and provides that otherwise the deliverance is not subject to review.

Section 71 enacts—“The judgment of the Sheriff declaring the person or persons elected to be trustee or trustees in succession shall be given with the least possible delay, and such judgment shall be final, and in no case subject to review in any court, or in any manner whatever.”

Section 81 is in these terms—… “And the bankrupt shall at all times give every information and assistance necessary to enable the trustee to execute his duty, and if the bankrupt fail to do so or to grant any deed which may be requisite for the recovery or disposal of his estate, the trustee may apply to the Sheriff to compel him to give full information and assistance, and to grant such deeds, under the penalty of imprisonment and of forfeiture of the benefit of this Act, and unless cause be shown to the contrary the sheriff shall issue a warrant of imprisonment accordingly.”

Section 12 of the Debtors (Scotland) Act 1880 (43 and 44 Vict. c. 34) is quoted in the Lord President's opinion.

The appellant argued—(1) This interlocutor of the Sheriff should be recalled, for there was no authority for it either in the statutes or in practice. (2) But further, the appeal on this judgment opened up for review all prior judgments of which it was the natural sequence ( Cross & Sons v. Bordes, May 22, 1879, 6 R. 934), and that enabled the Court to consider the deliverance confirming the appointment of the trustee and his appointment. That deliverance should also be recalled on the grounds stated in the note of appeal. The Act of Parliament was not intended for the benefit of a single creditor. It presumed creditors, and spoke of a meeting which was impossible when there was only one creditor present as here.

Counsel for the trustee argued—(1)—This interlocutor was covered by section 81 of the Bankruptcy (Scotland) Act 1856, the terms of which were very wide, but if that were not so, then the Debtors (Scotland) Act 1880, section 12, was sufficient to justify it. (2) The only question which could be considered here was the interlocutor brought under review. There was authority to that effect— Alison v. Robertson's Trustees, December 9, 1890, 18 R. 212. The judgment confirming the appointment of the trustee was by the statute declared final and not subject to review.