Scottish Court of Session Decisions

[1] The reclaimer was sequestrated on 17 February 2000 by an order of the Sheriff of North Strathclyde at Dumbarton pronounced in a petition at the instance of the present respondents. This petition for recall of the award of sequestration was lodged on 28 March 2000 and served on the respondents on 11 April 2000. After certain further procedure, the Lord Ordinary on 14 September 2000 dismissed the petition. A reclaiming motion was enrolled but further delays occurred and it was not until 12 January 2001, after amended grounds of appeal had been lodged, that the cause was appointed to the Summer Roll. The reclaiming motion was eventually heard in the Summer Roll on 13 July 2001.

[2] It is necessary to set out some of the background to the petition for sequestration, so far as it appeared from the submissions in the reclaiming motion. The respondents who are property factors raised a small claims action against the reclaimer some years ago. The sum sued for in the action was originally relatively small . The claim was disputed on the ground, inter alia, that the reclaimer had counterclaims against the respondents. There was a full hearing in the small claims court at Dumbarton Sheriff Court and subsequently there was an appeal to the Sheriff Principal. As a result of these proceedings, the respondents obtained a decree against the reclaimer for the sum of £1,573.55. This was the debt on which the petition for sequestration was founded. In the petition for sequestration the present respondents averred that they were qualified creditors of the reclaimer to the extent of that sum and an oath and supporting vouchers in the ordinary form were produced. It was further averred that the reclaimer had been rendered apparently insolvent by virtue of an expired charge for payment dated 15 November 1999 and an execution of service by sheriff officers, bearing to record service on the reclaimer on 9 February 2000, was lodged along with the petition. We shall refer later to the terms of the execution of service. The reclaimer sought the appointment of an interim trustee, which was granted. The interim trustee sought to enter on the duties of his office but experienced difficulty in obtaining co-operation from the reclaimer. These difficulties led the interim trustee to apply to the sheriff for orders for the production of documents and the completion of a statement of assets and liabilities, which were granted. The reclaimer then appealed to the Sheriff Principal, but her appeal was refused on 11 April 2001. In the exercise of his duties, the trustee went to the reclaimer's residence and took possession of documents there, a step which, it appears, the reclaimer resented.

[3] The reclaimer's material averments in the present petition are found in statements 3 and 4. In statement 3, she avers that she did not receive the petition for sequestration and continues:

[4] In their answers, the respondents aver that the petitioner owns the premises at 74 West Clyde Street and that she gives that as her address in correspondence with agents for the respondents. In statement 4 the reclaimer avers that the Sheriff Officers attempted service by recorded delivery to 74 West Clyde Street but that the letter was returned by a director of Georgeo Bridal Ltd and the petitioner did not receive it. The petition and answers have never been adjusted so that there are no denials on record.

[5] The execution of service itself designs the reclaimer as "residing at Knockderry Castle, Cove, and trading from 74 West Clyde Street, Helensburgh" and further states that service was executed,

[6] The execution also refers to the posting of a recorded delivery letter.

[7] In terms of Rule 14.8 of the Rules of Court, the reclaimer should have enrolled a motion for further procedure within 28 days after the date of lodging of the answers for the respondents, that is 3 May 2000. No motion was enrolled and on 20 June 2000 the agents for the respondents intimated a motion for dismissal of the petition for want of insistence, in respect of the failure to implement Rule 14.8. A letter was then received from the reclaimer's solicitors intimating that they no longer acted for her. On 4 July 2000, the Lord Ordinary granted an interlocutor ordaining the reclaimer to intimate within 14 days whether or not she insisted in her petition. That interlocutor was intimated to the reclaimer on 14 July 2000, by Sheriff Officers. On 25 July 2000, the reclaimer wrote to the Deputy Principal Clerk in the following terms:

[8] New agents were instructed on behalf of the reclaimer, but no steps were actually taken by them and they in turn withdrew from acting on 7 August 2000. On 21 August 2000 the reclaimer again wrote to the Deputy Principal Clerk in the following terms:

[9] That letter apparently refers to the visit by the trustee to the reclaimer's residence which we have mentioned. On 24 August 2000 the solicitors for the respondents intimated a further motion for dismissal of the petition on the ground of want of insistence.

[10] Solicitors and counsel were instructed on behalf of the reclaimer for the hearing of that motion on 14 September 2000. The Lord Ordinary records that there was no dispute as to the history of events or as to the failure to comply with Rule 14.8 but counsel for the reclaimer requested him to exercise his discretion to grant relief from the failure and to allow a short period of adjustment. The Lord Ordinary says:

[11] Counsel for the reclaimer submitted, firstly, that there was a genuine issue to be determined in the petition for recall of the sequestration. The petitioner maintained that she had not received intimation of the petition. The premises at which the petition had been left were not, as was averred in the petition, her business premises but had been sold by her to Georgeo Bridals Ltd, although no disposition had yet been delivered. Further, counsel said, the petitioner maintained that she had never received notice of the charge. Secondly, counsel submitted that the reclaimer's failure to progress the petition was attributable to her difficulties in obtaining the services of solicitors. It was not the case that the reclaimer had been unwilling to make progress with the petition. It was in her interest to make progress and she was anxious to do so as was indicated by her repeated efforts to obtain the services of solicitors. Counsel for the respondents submitted that there was no reasonable or acceptable explanation for the failure to make progress with the petition for recall. Although it was only possible to speculate about the reasons for the difficulties experienced by the reclaimer, the fact that she had had repeated difficulties in obtaining the services of solicitors was itself significant. Counsel also submitted that it was remarkable that no previous reference should have been made to the allegation now put forward that the charge for payment had not been served on the reclaimer, even though the matter had been through the hands of several firms of solicitors. He also commented that no previous reference had been made to the alleged unrecorded disposition of the property at West Clyde Street. The reclaimer had certainly been well aware of the respondents' claim since it had been the subject of prolonged proceedings in the small claims court and on appeal. Counsel for the respondents also mentioned that at the time when the sequestration was granted, reference had been made to a letter written by the reclaimer to the Sheriff Clerk which might indicate that she was aware of the proceedings. After some discussion, however, it appeared that the letter might have been written in connection with some other proceedings and not in relation to the petition for sequestration and counsel withdrew that argument.

[12] In our view, the Lord Ordinary came to the correct conclusion. It is important that sequestrations should proceed with reasonable dispatch and should not be delayed by extraneous proceedings. That is implicit in the rules which permit the trustee to proceed with the sequestration, as has been done in this case, notwithstanding the dependence of a petition for recall. In these circumstances, it is important that steps in the recall proceedings should be taken promptly. We cannot speculate as to the reasons which have created difficulties for the reclaimer in obtaining the services of solicitors. It seems to us, however, that, as was submitted on behalf of the respondents, the fact that these difficulties continued over a substantial period was itself significant. The issues in the petition for recall as it stood at the time of the Lord Ordinary's interlocutor were straightforward and there does not seem to be any sound reason why the proceedings should not have gone ahead with greater dispatch. In all the circumstances, we are satisfied that the Lord Ordinary was entitled to exercise his discretion to dismiss the petition and we shall accordingly refuse the reclaiming motion.