Scottish Court of Session Decisions

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Cite as: [1998] ScotCS 34

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OPINION OF LORD OSBORNE

in the Petition of

JAMES BELL

Petitioner;

for

Recall of Sequestration

against

(FIRST) WILLIAM ALISTER McMILLAN and (SECOND) DOUGLAS BROWN JACKSON

Respondents:

________________

23 October 1998

In this petition, the petitioner seeks recall of an award of sequestration made against him on 28 January 1998 in the Sheriff Court at Kilmarnock. The petition has been brought under section 16 of the Bankruptcy (Scotland) Act 1985, to which I refer hereafter as "the Act of 1985".

The circumstances in which this matter arises are as follows. The first respondent, William Alister McMillan, is a solicitor and a partner in the firm of Messrs McMillan Kilpatrick, S.S.C., of 12 Alloway Place, Ayr. On 10 August 1992, he was appointed by the Sheriff at Kilmarnock curator ad litem to Robert Burns Cumming Fulton, who resided latterly at Cloncaird Ward, Ailsa Hospital, Ayr, then pursuing an action in Kilmarnock Sheriff Court for Count, Reckoning and Payment against inter alios the present petitioner. The petitioner was the surviving testamentary trustee of a Mrs Janet McLanachan, acting under her Trust Disposition and Settlement dated 12 February 1973. Robert Burns Cumming Fulton, now deceased, was the son of Mrs Janet McLanachan and was entitled to a liferent of her estate.

On 19 March 1996, following the death of Robert Burns Cumming Fulton on 20 July 1995, the Sheriff at Kilmarnock pronounced an interlocutor in the said action in the following terms:

"The sheriff, having resumed consideration of the cause, dismisses the action; finds the curator ad litem entitled to payment of expenses from the estate of the late Mrs Janet McLanachan as secured in the hands of the Accountant of Court as such expenses as shall be determined by the Auditor of Court; so far as undecerned finds no expenses due to or by the parties to the action; in terms of the Civil Legal Aid (Scotland)(Fees) Regulations 1989 finds the pursuer's agents entitled to a 50% increase in fees".

Thereafter, the present petitioner appealed against the terms of that interlocutor to the Court of Session. On 22 November 1996, an Extra Division of the Court of Session pronounced the following interlocutor:

"The Lords having considered the Record in the Appeal for the First Defender and Appellant refuse the Appeal, affirm the interlocutor of the sheriff dated 19 March 1996 and decern; find the First Defender and Appellant liable to the curator ad litem to the Pursuer and Respondent in the expenses of the appeal to the Court of Session and remit an account thereof when lodged to the Auditor of Court to tax".

On 29 November 1996 the same Extra Division pronounced a further interlocutor in the following terms:

"The Lords having heard the Party Appellant and counsel for the Respondent refuse as incompetent the Motion of the Appellant dated 26 November 1996; find the Appellant liable to the Respondent in the expenses occasioned by this day's appearance on the Single Bills and remit the account thereof when lodged to the Auditor of Court to tax and to report".

On each of these occasions the Lords decerned for payment of the taxed expenses.

In due course, the first respondent presented his account for taxation to the Auditor of Court and the expenses due under the said interlocutors of the Court of Session were taxed in a total sum of £2,074.53. Thereafter an extract decree for those taxed expenses was issued, dated 25 November 1997. That extract decree is 7/3 of process.

On 1 December 1997, the petitioner was served with a charge for payment of the sums due under the extract decree. The execution of charge for payment, dated 1 December 1997, is 7/4 of process. The petitioner failed to pay the sums due within the days of the charge. Accordingly, the first respondent brought a petition in Kilmarnock Sheriff Court for the sequestration of the estates of the petitioner. Warrant to cite the petitioner was granted on 29 December 1997 and sequestration was awarded on 28 January 1998. In support of his petition for sequestration of the present petitioner, a copy of which is 7/1 of process, the first respondent produced the extract decree and execution of charge to which I have referred. However, he did not produce an oath in the prescribed form made by him or on his behalf, as required of a petitioner for sequestration, by section 11 of the Act of 1985. It appears that this omission was not noticed by the Sheriff Clerk at Kilmarnock Sheriff Court, nor by the Sheriff who awarded sequestration, nor by the present petitioner.

Following upon these events, the present petition for recall of sequestration was presented to this Court on 10 February 1998. A first order was granted in the present petition on 24 February 1998. Following upon the presentation of the petition for recall of sequestration, the first respondent realised that an error had been made in respect that the required oath had not been produced. In these circumstances, the first respondent presented a Note in the sequestration process in Kilmarnock Sheriff Court in terms of section 63 of the Act of 1985. In that Note, a copy of which is 7/6 of process, the Crave was in the following terms:

"The Noter respectfully craves the Court in terms of section 63 of the Bankruptcy (Scotland) Act 1985 to allow his Oath by Creditor to be received in the Sequestration Process in respect that, through oversight, it was not completed and lodged with the Petition, and to find the Noter entitled to the expenses of this Note against anyone appearing to oppose it.".

On 15 April 1998, the Sheriff at Kilmarnock appointed the Noter to serve a copy thereof upon the present petitioner and ordained him, if he intended to oppose the crave of the Note, to answer within the Sheriff Court House in Kilmarnock on Wednesday 6 May 1998. On that date, the present petitioner appeared to oppose the granting of the prayer of the Note, having previously lodged Answers thereto, 7/8 of process. Accordingly there occurred a hearing in relation to that matter, during which submissions were made on behalf of the Noter and, on his own behalf, by the present petitioner. Thereafter, the Sheriff decided to grant the prayer of the Note, issuing an interlocutor, dated 6 May 1998, to that effect. Appended to that interlocutor is a Note, in which the Sheriff sets out the reasons for his decision. A copy of that interlocutor and the Sheriff's note is 7/9 of process. The effect of that decision was to allow the first respondent's Oath by Creditor to be received in the sequestration process. A copy of the Oath by Creditor thus allowed to be received is 7/7 of process.

When the hearing in the present petition took place on 9 October 1998 before me, the petitioner appeared on his own behalf. Both respondents were represented by Mr T.G. Marshall, Solicitor Advocate. It should be explained that the second respondent, Douglas Brian Jackson, is a chartered accountant who was appointed to be interim trustee on the sequestrated estates of the petitioner, by the interlocutor of the Sheriff at Kilmarnock dated 28 January 1998.

The petitioner moved me to grant the prayer of the petition. He indicated that he wished to confine his submissions to one aspect of the matter, competence. He submitted that it was always open to the Court to consider a question of competence. In this connection he referred to Wolfson v Glasgow District Licensing Board 1980 S.C.136 and, in particular, to the observations of Lord Justice Clerk Wheatley at page 138. That dictum made clear that it was always open to the Court to consider a question of competency which struck at the whole root of the proceedings. A similar view was expressed in the note 40.14.7, which was a commentary on Rule of Court 40.14. The petitioner submitted that the incompetence upon which he founded lay in the sequestration itself. In this connection the petitioner referred to section 6(2)(b) of the Act of 1985, which provided that it was not competent to sequestrate the estate of any entity in respect of which an enactment provided, expressly or by implication, that sequestration was incompetent. The petitioner also referred to the provisions of section 12(3A)(a) of the Act of 1985, which provided that a sequestration should not be awarded if cause was shown why sequestration could not competently be awarded. In this connection, the petitioner drew attention to the contents of his Answers to the original Petition for Sequestration, 6/4 of process. In those Answers, plea-in-law 1 for the respondent was to the effect that the Court did not have jurisdiction. That important matter had been disregarded by the Sheriff.

The petitioner then focused attention upon the interlocutor of the Sheriff at Kilmarnock, dated 28 January 1998, purporting to award sequestration. It was submitted that there were four defects in that purported award. Firstly, it was certain that, at that date, the petition had not been presented in accordance with the requirements of the Act of 1985. In particular, the requirement that every creditor, being a petitioner for sequestration, should produce an oath in the prescribed form, enacted by section 11(1) of the Act of 1985 had been disregarded. That omission rendered the award of sequestration incompetent.

Secondly, it was a matter of agreement that the present purported sequestration had proceeded upon the apparent insolvency of the petitioner. Yet the requirements of section 11(5) relating to that matter had not been met. That provision required that every creditor had to produce, along with the oath, an account or voucher which constituted prima facie evidence of the debt; furthermore, a petitioning creditor had, in addition, to produce such evidence as was available to him to show the apparent insolvency of the debtor. In the present case, all that had been produced was the extract Court of Session decree and the certificate of execution of charge for payment. These documents did not constitute evidence of apparent insolvency.

Thirdly, the sequestration proceedings were fundamentally defective because the Sheriff had not appended a Note to any of the interlocutors pronounced by him in the sequestration proceedings, other than that pronounced on 6 May 1998, as required by Rule 12.2(3) and (4) of the Sheriff Court Ordinary Cause Rules of 1993. The petitioner accepted that evidence had not been led prior to the pronouncing of those interlocutors and that the Sheriff had not been asked to provide such a Note.

Fourthly, the sequestration proceedings were incompetent because the Sheriff had failed to appreciate that legislation provided measures for the recovery of debt other than the sequestration of the estates of the debtor. Sequestration was not a necessary measure for the recovery of the debt in the circumstances of the present case.

The petitioner next proceeded to submit that there were three fundamental defects in the Sheriff's interlocutor of 6 May 1998. Firstly, in the Sheriff's Note appended to that interlocutor, on four occasions, the Sheriff described the petitioner as "the bankrupt". That was a derogatory and incorrect description of the position of the petitioner, since there were no valid proceedings in which he had been declared bankrupt. In this connection the petitioner made reference to the Scottish Special Housing Association v Maxwell 1960 S.C.391, at page 394. There Lord President Clyde said that he was not in favour of retaining findings in fact in a case where no facts had been proved. There was no question of the petitioner having been proved to be a bankrupt.

Secondly, the interlocutor of 6 May 1998 should not have been pronounced because the sequestration process was not available to the Sheriff on that date. The fact was that as at 6 May 1998, the present petition for recall of the sequestration had been presented to the Court of Session. It followed from that situation that the Sheriff had usurped the authority of the Court of Session by dealing with the Note under section 63 of the Act of 1985. Section 63(3) provided that an application under subsection (1) might at any time be remitted by the Sheriff to the Court of Session, of his own accord or on an application by any person having an interest; and required to be so remitted, if the Court of Session so directed on an application by any such person, if the Sheriff or the Court of Session, as the case might be, considered that the remit was desirable because of the importance or complexity of the matters raised by the application. On behalf of the petitioner it was submitted that the sheriff should, of his own accord, have remitted to the Court of Session the application under section 63. Although the petitioner accepted that he had not asked the Sheriff to make a remit to the Court of Session, the proceedings of the Sheriff were incompetent because the process was in Edinburgh.

Thirdly, the petitioner contended that the provisions of section 16 of the Act of 1985 "meant that section 63 was inoperative". While the sequestration proceedings were continuing, their continuance was limited by the provisions of section 17(6) of the Act of 1985. In this connection, the petitioner made reference to page 2 of the Sheriff's Note, 7/9 of process, where the Sheriff declared that he had not understood a point made by the petitioner. The point which had been made was that "a little leven leveneth the whole lump", which was a Biblical quotation. The Sheriff had not wanted to understand the significance of that. The point being made was that the original incompetence inherent in the sequestration and petition had rendered the whole subsequent proceedings incompetent. In this connection reference was made to a decision of Lord Cowie in H.M.A. v Docherty 1981 J.C.6, where it had been held that an error in a caution rendered the admission of the whole of the subsequent statement objectionable. The original failure of the petitioning creditor to lodge an oath in the sequestration proceedings rendered everything which followed incompetent.

The petitioner next proceeded to submit that the sequestration should be recalled on account of the Sheriff having failed to take into account a number of material considerations, details of which were set forth on page 2 of the petitioner's amended petition for recall. The position was that the estate of the petitioner was held in a fiduciary capacity; the interim trustee was intromitting wrongfully with that trust estate. That he had done so was a reason for the recall of the sequestration. The significance of trust property in the context of a sequestration could be seen from a number of the relevant statutory provisions; in particular, in this connection, reference was made once again to section 6(2)(b) of the Act of 1985. The Sheriff had failed to take into account that the assets concerned were of "an inter vivos nature". On being questioned by myself about this particular submission, the petitioner stated that his assets were contained in a joint bank account which he had held for 53 years along with his wife, the bank account being held with the Bank of Scotland in joint names. On being pressed by myself as to why the situation of the joint bank account constituted a trust, the petitioner drew my attention to section 14(2) of the Trusts (Scotland) Act 1921, which provides that the expression "trustee" includes any person holding funds in a fiduciary capacity and the expressions "trust" and "trust deed" had to be construed accordingly. The petitioner contended that an inter vivos trust was created wherever there was a joint bank account in the name of a husband and wife. If the assets contained in the joint bank account were trust property, then they were protected from the effect of any sequestration. In that connection the petitioner referred to section 33(1)(b) of the Act of 1985. It provided that property held on trust by a debtor for any other person did not vest in a permanent trustee. In the same context, the petitioner referred to the Council of the Law Society of Scotland v McKinnie 1991 S.C.355 at page 359, where Lord President Hope, as he then was, said that there was no doubt that sums held to the credit of a solicitor's client's account were fiduciary in character and for that reason were sums to which section 33(1)(b) of the 1985 Act applied. On this whole matter, the petitioner contended that because he was possessed of the joint bank account in a fiduciary capacity, the sequestration itself was incompetent and ought to be recalled.

On behalf of the respondents, Mr Marshall submitted that the petition for recall ought to be refused. The position was that the original petition for sequestration had been competently brought and granted although the whole provisions of section 11 of the Act of 1985 had not been observed at the time.

After summarising the factual background for the Court, Mr Marshall proceeded to drawn my attention to certain provisions of the Act of 1985. Section 12 thereof dealt with the situation where sequestration was awarded. The petition here had been a creditor's petition and the Sheriff Court at Kilmarnock had correctly granted a warrant to cite the debtor to appear before it. Apart from the problem concerning the lodging of the oath, all of the requirements of the Act had been satisfied. The basis of the petition had been the fact that the present petitioner had been "apparently insolvent", as required by section 5(2)(b) of the Act of 1985. The petitioner in the petition for sequestration had been a "qualified creditor" within the meaning of section 5(4) of the Act of 1985, his debt having been one for a sum in excess of £1,500. Furthermore, the apparent insolvency founded upon in the petition had been constituted within four months before the petition for sequestration had been presented, as required by section 8(1)(b) of the Act of 1985. The apparent insolvency in this case had commenced on 15 December 1997, upon the expiry of the days of charge. The Sheriff at Kilmarnock had jurisdiction in the matter, by virtue of the fact that the present petitioner lived in Kilmarnock and by virtue of section 9(4) of the Act of 1985. In short, Mr Marshall submitted that all of the requirements of the Act of 1985 had been met save that the oath had been omitted to be lodged upon presentation of the petition. The requisite oath, which was in the form prescribed by Form 2 in the schedule to the Bankruptcy (Scotland) Regulations 1985, had ultimately been produced with the Note to the Sheriff under section 63 of the Act. The oath concerned was 7/7 of process. Unfortunately a number of persons had failed to observe the original omission, including the petitioner for sequestration, his solicitors, the Sheriff Clerk, the Sheriff and the present petitioner.

The present petitioner's position amounted to the contention that the Sheriff was not entitled to grant the Note presented to him under section 63 of the Act of 1985 as he did on 6 May 1998. The petitioner's position in that regard was unsound. In relation to the petitioner's procedural point that, in some way or another, the presentation of a petition for recall of the sequestration by him prevented the Sheriff from dealing with the Note was plainly wrong. In that connection, Mr Marshall referred to section 16(5) and 17(6) of the Act of 1985. The former provided that, notwithstanding that a petition had been presented for recall of an award of sequestration, the proceedings in the sequestration should continue, subject to section 17(6) of the Act, as if that petition had not been presented until the recall was granted. Section 17(6) gave to the Court of Session power to make an order that proceedings in a sequestration sought to be recalled should continue, but should be subject to such conditions as it might think fit, where that Court considered that it was inappropriate to recall or to refuse to recall an award of sequestration forthwith. In the present case, the Court of Session had made no such order. It followed that, by virtue of section 16(5) of the Act of 1985, at the time when the Note under section 63 was presented to the Sheriff, the proceedings in the sequestration were continuing. Accordingly there was no impropriety or incompetence in the Sheriff dealing with that Note.

Turning to the defect of the omission of the oath itself, which was at the heart of the petitioner's submissions, Mr Marshall argued that the Sheriff's powers under section 63 gave him a very wide discretion to cure defects in procedure. That power existed where there had been "a failure to comply with any requirement of this Act or any regulations made under it". That power was quite wide enough to cure the problem which had been created by the omission of the oath at the time of the presentation of the petition. In connection with this submission, Mr Marshall recognised that there might exist defects of a kind which could not be cured under section 63. An example of such a problem was to be seen in Mowbray v Valentine 1998 S.C.424. In that case, no attempt was made to use the provisions of section 63 of the Act of 1985.

There were several reported decisions in which the provisions of section 63 had been considered. The first of these was The Royal Bank of Scotland Plc v J. & J. Messenger. In that case, the Court recognised that the Act of 1985 empowered the Court to sequestrate the estates of individuals and of certain entities, including a partnership. In that case, on the application of the creditor the "estate" of a partnership and its partners had been sequestrated and a permanent trustee appointed. It was then realised that this would have resulted in the creditors having to meet expenses in relation to the individual partners which, if there had been separate awards of sequestration, would have been met by the Accountant in Bankruptcy. In these circumstances the permanent trustee sought an order from the Sheriff to separate the earlier award into three separate awards. The Sheriff remitted the matter to the Court of Session, where it was held that the Court had power under section 63(1)(a) to waive failure to comply with the requirement of the Act that sequestration could only be awarded in respect of the separate estate of a distinct legal persona. The failure which was cured in that case was of a much more radical nature than the failure which the sheriff cured in this case.

In Pattison v Halliday 1991 S.L.T.645, it had been held that the objective of section 63 was to prevent the sensible progress of sequestrations from being hampered by irregularities which were purely technical when equitable considerations required otherwise. In that case, it was held competent to extend the time available for the presentation of a Note applying for deferment of the debtors' discharge. Whether or not there would be prejudice caused by the granting of such an application was a relevant matter for consideration in the exercise of the discretion under section 63.

In Accountant in Bankruptcy v Allans of Gillock Ltd 1991 S.L.T.765, it was held that an interlocutor of the Sheriff purporting to change the effective date of a sequestration was ultra vires of the Sheriff. That was not a matter which could be effectively achieved under section 63 of the Act of 1985. That matter had been the subject of a concession.

Finally, in Ritchie v Whittaker, once again the scope of section 63 was considered. In that case, it was accepted that a waiver under section 63 was competent in a situation in which a trustee had failed timeously to apply for the deferment of an automatic discharge, although, in the particular circumstances of that case, the waiver sought was not granted.

Having regard to these authorities, it was plain that the Sheriff's decision to allow the oath to be received late was one which could properly be made under section 63 of the Act of 1985. Accordingly that feature disappeared as a basis for the petitioner's arguments in relation to competency.

Mr Marshall then went on to deal with a variety of matters to which reference had been made by the petitioner. He submitted that the provisions of section 6(2)(b) were of no assistance to the petitioner. In the first place, he was a person not an "entity". In the second place, the petitioner had not pointed to any enactment which provided expressly or by implication that his sequestration was incompetent. Turning to the matter of the significance, if any, of the petitioner's alleged position as a trustee, Mr Marshall submitted that it was quite plain that a person holding office as a trustee could nevertheless be sequestrated competently as an individual for his personal debts. In such a situation the sequestration would not affect the property which the individual held as trustee. In terms of section 33(1)(b) property held on trust by the debtor for any other person would not vest in the trustee. Furthermore, the fact that a person held office as a trustee could never be a reason why they could not competently be sequestrated, in appropriate circumstances. In addition, in relation to this aspect of the petitioner's argument, there was no foundation for the contention that the fact that the petitioner was one of the two named holders of a joint bank account created a trust. All that was created in such a situation was joint property. In any event, if there was any problem concerning the trustee in the present case claiming right to any estate which was in fact trust property, the aggrieved person could take action in terms of section 31(6) of the Act of 1985, applying to the Court for the estate concerned to be excluded from vesting.

There was no substance in the criticism made of the conduct of the Sheriff at Kilmarnock in not issuing Notes appended to his interlocutors other than that of 6 May 1998. Since no evidence had been led prior to the pronouncing of those interlocutors and no requests had been made to the Sheriff to issue Notes, there was no legal requirement that he should do so.

The Sheriff had been criticised here upon the basis that sequestration was not the only means whereby a creditor could enforce payment of his debt. It was plainly true that there were other means of enforcing payment of debts. However, whether a creditor chose to pursue the course of seeking an award of sequestration was entirely a matter for him. Provided that the creditor was a "qualified creditor" in terms of the Act of 1985, he was entitled to seek an award of sequestration and a Sheriff was entitled to grant it in appropriate circumstances.

The petitioner in the present petition complained that he had been described as a "bankrupt" by the Sheriff in his Note appended to the interlocutor of 6 May 1998. That description was wholly apt in the circumstances where in fact an award of sequestration of the estates of the present petitioner had, by then, been granted. In any event, whether the description was apt or not, it did not constitute a finding in fact. Its use, even if inappropriate, could not render the Sheriff's award of sequestration incompetent.

The present petitioner, in reply, made a number of points. In terms of section 11(5) of the Act of 1985, it was incumbent upon a creditor to produce, along with the Oath, a voucher constituting prima facie evidence of the debt; and, in addition, to produce such evidence as was available to him to show the apparent insolvency of the debtor. The decree relied upon as the basis for the petition for sequestration here together with the execution of charge for payment did not constitute evidence of apparent insolvency. It was also contended that none of the cases relied upon by Mr Marshall dealt with the arguments based upon section 16 of the Act of 1985. If a petition for recall of sequestration was presented to the Court of Session, then it was not competent for the Sheriff simultaneously to entertain a Note under section 63 of the Act of 1985. The case of Mowbray v Valentine demonstrated that where a fundamental flaw occurred in a sequestration process, then that constituted a ground for the recall of the sequestration. That is what had happened in the present case.

Perhaps the most prominent of the various arguments deployed by the petitioner was that which was based upon the failure of the first respondent to lodge, along with his petition for the sequestration of the present petitioner, an oath in the prescribed form, as required by section 11(1) of the Act of 1985. It was a matter of agreement before me that the Act of 1985 contemplated that such an oath should be produced along with a petition for sequestration, although section 11 of the Act did not make that clear. There is no doubt that that was not done here and it is both surprising and regrettable that the omission was not detected at the time when the petition was presented in the Sheriff Court in Kilmarnock. Equally there is no doubt that an oath in the prescribed form has in fact subsequently been produced, which

was done when the first respondent's Note under section 63 of the Act was presented. In the whole circumstances which have occurred, it appears to me that two principal questions arise in relation to this omission. These are, firstly, whether the failure was one capable of being cured by an exercise of the power conferred upon the Sheriff by section 63 of the Act; secondly, whether it was competent for the Sheriff to exercise that power in the first respondent's favour during the dependence of the present petitioner's petition for recall of sequestration. I propose now to deal with each of these questions in turn.

The provisions of section 63(1) of the Act of 1985 are as follows:

"The Sheriff may, on the application of any person having an interest - (a) if there has been a failure to comply with any requirement of this Act or any regulations made under it, make an order waiving any such failure and, so far as practicable, restoring any person prejudiced by the failure to the position he would have been in but for the failure; ....".

Section 63(3) of the Act provides:-

"An application under subsection (1) above - (a) may at any time be remitted by the Sheriff to the Court of Session, on his own accord or on an application by any person having an interest; and (b) shall be so remitted, if the Court of Session so directs on an application by any such person, if the Sheriff or the Court of Session, as the case may be, considers that the remit is desirable because of the importance or complexity of the matters raised by the application".

In my opinion, the language used in section 63(1)(a), and, in particular, the words "a failure to comply with any requirement of this Act", are wide. While it may be possible to envisage defects of procedure of a very grave nature which would not be capable of being cured under the provisions of this section, I am of the view that the failure of a petitioning creditor to lodge an appropriate oath under section 11 of the Act timeously is not one of those. I am in agreement with the view expressed by the Sheriff in this case in the Note attached to his interlocutor of 6 May 1998 that this sort of omission is just the sort of situation for which section 63 was enacted. I am reinforced in my view relating to that by consideration of what was done in The Royal Bank of Scotland plc v J. & J. Messenger. It appears to me that the course taken in that case was of a more radical nature than that which the Sheriff was asked to take in this case. Accordingly, I consider that section 63(1) did give the Sheriff the power to do what he did in his interlocutor of 6 May 1998.

Turning next to the second question which arises in this connection, the petitioner's contention appeared to be that, in exercising his power when he did, the Sheriff had usurped the position of the Court of Session. This contention was based upon the circumstance that, by the time that the Sheriff pronounced the interlocutor of 6 May 1998, the petitioner had already presented this petition for recall of his sequestration. The petitioner argued that that prevented the Sheriff from competently taking the course which he did at that time. With that view I disagree. There was no question of the provisions of section 63(3) having been operated in the circumstances of this case. In particular, at no time did the Sheriff decide to remit the matter of his own accord to the Court of Session, nor was he asked to do so by any person having an interest. Furthermore, there was no question of the Court of Session directing the remit to it of the application made by the first respondent in his Note under section 63. The question then appears to me to be whether there are any provisions elsewhere in the Act which would have had the effect of preventing the Sheriff from exercising his powers under section 63 at the time when he did. In my view, there are not. Indeed, section 16(5) of the Act appears to me to make it clear that the proceedings in the sequestration are to continue, subject to section 17(6) of the Act, notwithstanding that a petition for recall has been presented, as if that petition had not been presented until the recall should be granted. Looking at the provisions of section 17(6), which qualify those of section 16(5), while the Court of Session might have made an order imposing some conditions upon the continuance of the sequestration, the petition for recall having been presented, the fact of the matter is that it did not do so. In these circumstances, I can see no reason why the existence of the petitioner's petition for recall as at 6 May 1998 should have prevented the Sheriff from exercising his power under section 63. I cannot agree with the suggestion made by the petitioner that, in some unspecified way, the Sheriff was usurping the position of the Court of Session. In all these circumstances the conclusion which I reach is that the omission to lodge the petitioning creditor's oath at the appropriate time was a matter which was capable of being cured under section 63 and was cured upon the exercise by the Sheriff of his discretion under that section. I therefore reject the petitioner's arguments so far as they are based upon that omission. Some reliance was placed by the petitioner upon the criminal case of Docherty v HMA. I am unable to understand the relevance which the petitioner considers that case possesses in the circumstances here. It was concerned with the admissibility of certain evidence in criminal proceedings. I find it of no assistance in the present context.

Another prominent argument advanced by the present petitioner was based upon what he said was an inter vivos trust, which had come into being by virtue of the existence of a joint bank account which had been held for fifty three years by himself and his wife. Upon that basis he erected a number of submissions which he said resulted in the inevitable conclusion that the sequestration proceedings against him were incompetent. In my opinion, this chapter of argument is based upon a false premise. It is, of course, not unusual for spouses to hold a bank account in joint names. As I understand it, there are a number of authorities which deal in different ways with problems which can arise in such a situation. However none of these were cited to me in the course of the argument before me. As I understand the position, the name or names in which an account stands are not conclusive as to the ownership of the money in the account concerned. In these circumstances, depending upon the facts of the case, one or other of the two named holders of the account may in fact be entitled, as a matter of property, to the whole funds held in the account. The entitlement of the named account holders depends upon issues of fact which, in any particular case, would require to be the subject of investigation. No circumstances were put before me in the course of the argument in this petition to elucidate those matters. In these circumstances, I am quite unable to conclude that the petitioner held any funds contained in the account concerned in a fiduciary capacity. That being so, in my opinion, the arguments based upon the existence of a fiduciary capacity disappear.

Even if I were wrong in the view which I have just expressed, it appears to me that the conclusion which the petitioner sought to draw from the existence of his status as a trustee is a non sequitur. In my view, a person who holds office as a trustee may competently be sequestrated in respect of his personal debts. In such a situation, the property held by him in a beneficial capacity, as opposed to in a fiduciary capacity, will no doubt vest in the trustee and be distributed according to law. In such a situation it is quite plain that the trust property held by the debtor would not be thus affected by the sequestration. That appears to me to be a direct consequence of the provisions of section 33(1)(b) of the Act of 1985 which provides that:

"The following property of the debtor shall not vest in the permanent trustee - ... (b) property held on trust by the debtor for any other person."

In any event, in a situation in which a person holding office as a trustee was sequestrated, if any problem arose in relation to property which was in fact trust property, which a trustee sought to involve in the sequestration, any person claiming right to any such property would have the remedy conferred by section 31(6) of the Act of 1985, of application to the court for the estate concerned to be excluded from vesting in the trustee.

In his submissions, the petitioner sought to derive benefit from the provisions of section 6(2)(b) of the Act of 1985. In my opinion, that provision is of no relevance in the present situation. It deals with the estate of "an entity in respect of which an enactment provides, expressly or by implication, that sequestration is incompetent." In my view the petitioner is a person and not an entity. In any event, he did not draw my attention to any enactment which provides that his sequestration is incompetent.

The petitioner also argued that the sequestration proceedings were incompetent because the provisions of section 11(5) of the Act of 1985 had not been observed. This sub-section provides:

"Every creditor must produce along with the oath an account or voucher (according to the nature of the debt) which constitutes prima facie evidence of the debt; and a petitioning creditor shall in addition produce such evidence as is available to him to show the apparent insolvency of the debtor."

It was said by the petitioner that evidence of apparent insolvency had not been produced. With that contention I disagree. There was no dispute that the first respondent produced, along with his petition for the sequestration of the present petitioner, the extract decree to which I have referred, together with the execution of charge for payment, also mentioned above. Those documents, in my opinion, plainly demonstrate prima facie evidence of the debt relied upon and, in association with the immediately verifiable fact that days of charge had expired, of the apparent insolvency of the debtor. Accordingly, in my opinion, there is no substance whatsoever in this submission.

Criticism was directed against the sheriff in respect that a Note of his reasons was appended only to the interlocutor of 6 May 1998. In my view, there is no substance in this criticism either. Rule 12.2 of the Ordinary Cause Rules of the Sheriff Court sets out the situations in which a sheriff is obliged to furnish a Note along with an interlocutor. In my view, there was no obligation under this Rule for the provision of a Note, except in relation to the interlocutor specified, when a request was in fact made by the present petitioner that the sheriff should set forth his reasons in that way.

The present petitioner complained that the sequestration proceedings were incompetent because there were other remedies than sequestration which were available to a creditor to enable a recovery of the debt to be achieved. In my opinion, this argument involves a non sequitur. Plainly there are several ways in which a creditor may enforce payment of his debt from a debtor. However, provided that the creditor is a "qualified creditor" within the meaning of section 5(4) of the Act of 1985, it appears to me that that creditor has the option of pursuing sequestration proceedings. The first respondent here was such a creditor and accordingly was entitled to take that course. The fact that the petitioner may find that unpalatable to him is neither here nor there.

Finally, the petitioner complained that the sheriff, in his Note appended to the interlocutor of 6 May 1998, on four separate occasions referred to him as the "bankrupt". In my view no criticism can be justifiably levelled at the sheriff in that regard. The fact was that the petitioner, by then, had been sequestrated and accordingly could aptly be so described. That description was in no sense a finding in fact by the sheriff and accordingly, in my opinion, the observations made in the Scottish Special Housing Association v Maxwell have no relevance to the situation. In my view there is no substance in this part of the petitioner's argument.

In the whole circumstances, I shall sustain plea-in-law 1 for the respondents and dismiss the petition.