Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2013] CSOH 101
P153/01	OPINION OF LORD GLENNIE in the Petition of JAMES DUFF For an order under Section 82 of The Bankruptcy (Scotland) Act 1913 ________________

Petitioner: Party

Respondent: AGM Jones, Solicitor Advocate; bto

25 June 2013

Introduction
[1] On 27 May 1976 the petitioner, Mr Duff, was sequestrated under the provisions of the Bankruptcy (Scotland) Act 1913. The respondent, Mr Forbes, was appointed his trustee in bankruptcy.

[2] By this petition, brought many years ago under s.82 of the 1913 Act, Mr Duff seeks an order requiring the trustee to account for his intromissions and management of the bankrupt estate in relation to claims presented in the sequestration by JJ Little & Son ("Little") and GL Robertson (Dumfries) Limited ("Robertson").

[3] Progress in this petition has been desultory in the extreme. The petition was presented in January 1987. In April 1993 Mr Duff presented a minute of amendment which sought to add further complaints in respect of a large number of other claims presented in the sequestration and accepted by the trustee. Receipt of the minute of amendment was allowed, but the amendment itself was never moved. The next procedure was in November 2012, when Mr Duff moved to have a new minute of amendment received in substantially the same terms so as to bring in these additional claims. I refused that motion. It came far too late.

[4] At a subsequent hearing in December 2012 I appointed the petition to a procedure roll hearing on the respondent's pleas to relevancy and competency. Those pleas were argued before me on 6 and 7 June of this year. This opinion deals with those arguments.

[5] I should note that the interlocutor appointing the petition to a procedure roll hearing referred only to the respondent's first and second pleas-in-law. In fact the respondent's third plea-in-law fleshes out the main competency plea, and this too was argued without objection.

[6] To put the arguments in the necessary context, I should refer to other aspects of the various proceedings in the sequestration.

Adjudication by the trustee on claims made in the sequestration
[7] A number of claims were made in the sequestration. Many (perhaps all) were disputed by Mr Duff. His main argument was that the work done by various creditors presenting claims against the bankrupt estate had been done not for him but for J&J Duff (Lochmaben) Limited ("the company"); and it was the company, not him, which was liable to them. The trustee adjudicated on those claims on about 9 or 10 October 1980 (the exact date of the trustee's deliverance is uncertain and for present purposes does not matter). Amongst other things, he allowed the claims against the estate by Little and Robertson.

Appeal to the Court of Session under s.165 Bankruptcy Act 1913
[8] Mr Duff appealed to the Court of Session against the trustee's decisions in that deliverance under s.165 of the 1913 Act, which provided that it was competent to appeal against any deliverance of the trustee to the Lord Ordinary "provided that the note of appeal shall be lodged ... within 14 days of the date of the deliverance".

[9] It is not clear whether the appeal covered all the decisions made by the trustee. For present purposes it is sufficient to note that among the decisions challenged by Mr Duff in his appeal were the trustee's allowance in full of the claims by Little and Robertson which are the subject of complaint in the current petition. Although the judgment of Lord Kincraig refers to a claim by "John Little" rather than JJ Little & Son, Mr Duff confirmed that this was indeed the claim by Little which is complained of in this petition.

[10] The appeal was heard by Lord Kincraig. On 17 March 1983 he held that Mr Duff had failed to establish any of the grounds of appeal against the trustee's deliverances. Accordingly, he refused the appeal. A reclaiming motion was marked but later abandoned.

[11] In his argument before me in the current petition, Mr Duff made certain criticisms of the solicitors then acting for him, both in respect of their failure to lodge relevant evidence and also in connection with the abandonment of the reclaiming motion. I cannot form any view on those matters in these proceedings, but in any event they do not in any way undermine the decision of Lord Kincraig to refuse the appeal.

[12] Further, Mr Duff pointed out that, although his note of appeal was properly intimated to the trustee, the trustee did not intimate it to any of the creditors in whose favour he had ruled. That should have been done, since it was the creditor and not the trustee who had the interest in upholding his decision: Skinner's Trustees v Keith 14 R 563, and see also Goudie on Bankruptcy, 4^th ed., at p.328. As a result, the creditors were not represented on the hearing of the appeal. This was a point noted by Lord Kincraig, who observed that the appeal should have been intimated to the creditors and that he would have found it impossible to sustain the appeal against any of the deliverances challenged in the absence of intimation to them. Since, however, he held that the appeal failed, he was content to deal with it in their absence.

[13] Mr Duff contends that the failure to intimate the appeal to the creditors means that the decision by Lord Kincraig refusing the appeal "should be treated as void, because a party with no legal right to enter into a process cannot defend the cause". He says that Lord Kincraig acted ultra vires. There is no merit in that point. Nothing in the decision in Skinner's Trustees suggests that the failure to intimate the appeal to the creditors renders the whole appeal process void. In that case the Court was prepared to deal with the matter by sisting the creditors to the process. Clearly, as Lord Kincraig noted, a decision to allow the appeal could not have been made in the absence of the relevant creditor. But that did not happen; the appeals were refused and the relevant creditors were therefore not prejudiced.

[14] In any event, whatever the merits of Mr Duff's complaints, the fact is that the refusal by Lord Kincraig of his appeal against the trustee's deliverances stands unless and until it is reduced. In June or July 1995, having been given leave by Lord Coulsfield under Rule of Court 4.2(5) to do so without the signature of an agent, Mr Duff presented a petition seeking reduction of Lord Kincraig's decision. But in April 2003, there having apparently been no procedure in the meantime, Lord Marnoch refused a first order and dismissed the petition.

[15] In those circumstances I must proceed upon the basis that the trustee decided in favour of the relevant creditors, Little and Robertson; that that decision was appealed to the Court of Session under s.165 of the 1913 Act; that that appeal was refused; that a reclaiming motion against that appeal was abandoned; and that a petition for reduction of the decision refusing the appeal has been dismissed.

Discharge
[16] In the meantime, on 19 November 1980 the petitioner was discharged by the sheriff at Dumfries. This discharge did not, of itself, bring the sequestration to an end.

Petition to the nobile officium
[17] In 1986, after the refusal of his appeal under s.165 of the 1913 Act, Mr Duff presented a petition to the nobile officium seeking to bring the sequestration to an end. He averred that he did not know whether the trustee had made a final division of the funds in his possession, but he had had ample time to do so. He criticised the conduct of the trustee in allowing and paying out on claims against his estate by, among others, Little and Robertson. As was made clear in the petition itself, the motive behind this petition was to enable him to pursue a remedy against the trustee in respect of the claims (said by him to be fraudulent) which the trustee had accepted as validly presented against the bankrupt estate. It was, in effect, another route to opening the door to litigation against the trustee for his acceptance and payment of claims in respect of which Mr Duff's appeal had failed.

[18] No progress was made in that petition for many years. In May 2013 an Extra Division dismissed that petition. It was pointed out to Mr Duff that in terms of the transitional provisions in s.75(4) of the Bankruptcy Act 1985 his sequestration had automatically come to an end two years after the coming into force of the 1985 Act. That Act came into force in its entirety by about the end of 1986, so that by about the end of 1988 at the latest the sequestration had come to an end. There was therefore no current purpose served by the petition to the nobile officium.

Exoneration and discharge
[19] In September 1988 the trustee summoned a Final Meeting of the creditors under s.152 of the 1913 Act to consider an application to be made by him to the court to be discharged from his duties as trustee. The meeting duly took place. Mr Duff was refused access.

[20] In 1991 the trustee petitioned the court for his exoneration and discharge under that section. I was told by Mr Duff that the trustee had earlier sought to obtain his discharge without giving notice to Mr Duff, and had been told by the court that in the absence of such notice his petition was incompetent. I do not know whether this is factually correct, but even if it is it cannot affect the petition that was presented in 1991 and the judgments obtained thereon.

[21] On 10 March 1993 Lord Morison made an order exonering and discharging the trustee "of his whole actings, intromissions and management as trustee of the sequestrated estates ...". Mr Duff reclaimed. His reclaiming motion was refused on 21 May 1993. The opinion of the court, delivered by Lord Clyde, is reported as Duff's Trustee, Petitioner 1993 SC 466.

[22] Before me, Mr Duff contended that the trustee's exoneration and discharge was obtained by deception. He contends that his application did not disclose to the court that there were court proceedings pending. Whether that is so or not, and I have not seen the trustee's petition, it is clear that the court hearing the petition for exoneration and discharge was fully aware of the existence of both the petition to the nobile officium and the s.82 petition with which I am presently concerned.

[23] In his (unreported) opinion of 10 March 1993, Lord Morison referred in some detail to the allegations made by Mr Duff in his petition to the nobile officium. He observed that the allegations on which that petition was based had been the subject of an appeal by Mr Duff which was dismissed in 1983. He noted that there had been no procedure in that petition to the nobile officium since about 1987; and he expressed the view that in those circumstances that petition should not be regarded as "now reflecting any live issue between the parties". He then went on to say this:

"These observations apply also to another petition which the respondent avers he presented relating to claims by two creditors ... Those creditors' claims have previously been the subject of adjudication against which the respondent did not appeal, or if he did, was unsuccessful."

That is clearly a reference to the s.82 petition with which I am presently concerned. In the context of a suggestion that the s.82 petition might be amended to include a number of other claims, Lord Morison said this:

"in so far as any of the allegations now sought to be made have been the subject of adjudications already made by [the trustee], it would in my view be incompetent to introduce them into the present proceedings."

It is clear from this that, whether these matters were raised by the trustee or by Mr Duff, the court was fully aware of them. There can be no question of the court having granted the petition for exoneration and discharge in ignorance of the existence of those proceedings.

[24] In addition, there is an express reference to both petitions in the opinion delivered in the Inner House at p.468A-E. As regards the petition to the nobile officium, Lord Clyde observed that counsel for the respondent (Mr Duff) accepted that it was superseded by events. As regards the s.82 petition, Lord Clyde observed that

"no complaint is now pressed in that regard although the petition is still a live process and [Mr Duff's] intention appears to be to use it as a vehicle for presenting his current complaint about delay."

It appears that the complaint about delay was the main ground for opposing the trustee's petition for exoneration and discharge. Lord Clyde went on to say, with reference to the s.82 petition:

"The existence of that petition was not presented as a ground for refusing exoneration and discharge beyond the consideration of its possible availability as a vehicle for pursuing the complaint about delay."

In an earlier passage (at p.467H-I) observed that "Both parties accepted that the effect of the exoneration and discharge of the trustee would be to bar [Mr Duff] from making further claims against him as trustee." Counsel for Mr Duff had referred in that connection to the case of Hemming v Galbraith 1908 SC 897.

[25] It follows that there is nothing in Mr Duff's point that the trustee's exoneration and discharge was obtained by deception. In any event, there has been no step taken to reduce the interlocutor granting exoneration and discharge.

The current s.82 petition
[26] S.82 of the 1913 Act provides, so far as relevant, that

"the trustee ... shall be amenable to the Lord Ordinary ... at the instance of any party interested, to account for their intromissions and management, by petition served on them...".

[27] A first order in the current petition was granted on 29 January 1987. I have already set out sufficient of the complaints raised in the petition against the trustee. It is said that he ought to have rejected the claims by Little and Robertson against the sequestrated estate. It is said that he knew or ought to have known that those claims ought properly to have been made against the company rather than against Mr Duff personally, and that he therefore ought to have rejected those claims.

The respondent's arguments
[28] Mr Jones, who appeared for the respondent (the trustee), presented three arguments. First, he submitted that Mr Duff had already appealed the trustee's determinations anent the claims by Little and Robertson under s.165 of the 1913 Act and that appeal had been unsuccessful. It was incompetent now to seek to use the procedure under s.82 as an alternative method of appealing those determinations. Secondly, he submitted that it was incompetent to seek an accounting under s.82 of the 1913 Act after the trustee had been exonered and discharged by order of the Court. Third, he submitted that in any event the averments made by Mr Duff in the petition lacked any basis to call into question the trustee's conduct in admitting the claim.

[29] Mr Duff was not legally represented at the hearing before me but presented his arguments with courtesy and commendable efficiency. Apart from seeking to undermine the decisions previously made by the Court in refusing his s.165 appeal and in granting the petition for exoneration and discharge, submissions with which I have already dealt at some length, his argument was simply this: that the fact that there had already been an unsuccessful appeal and that the trustee had been discharged was irrelevant to the competency of the current petition under s.82 of the 1913 Act. He was seeking to bring the trustee to account for his "malversations". Subject to applicable rules about prescription and limitation, he could do so at any time. And he pointed out that this petition had been presented long before the trustee presented his own petition for exoneration and discharge.

Discussion
[30] The question at issue in this case is the scope of s.82 of the 1913 Act and the circumstances in which it may and may not be invoked. The section provides as follows:

"82. The judicial factor, the trustee, and commissioners shall be amenable to the Lord Ordinary and to the sheriff, although resident beyond the territory of the sheriff, at the instance of any party interested, to account for their intromissions and management, by petition served on them; and, in case it shall appear that such application ought not to have been made, the party complained of shall be entitled to his full expenses, to be either retained out of the funds, or recovered from the party complaining, as the Lord Ordinary or the sheriff shall direct."

On its face, that section appears to provide for a general right to bring the acts of the trustee during the course of the sequestration under review at any time, at least while the sequestration is still on-going. However, it is clear from authority that such a wide reading of the section cannot be supported.

[31] The case law to which I was referred in argument related principally to s.86 of the Bankruptcy (Scotland) Act 1856, the predecessor of s.82 of the 1913 Act. S.86 of the 1856 Act was in materially identical terms. Its general ambit was considered in Burt v Bell (1863) 1 M 382 in which a bankrupt presented a petition complaining that the trustee's commission had been fixed by the trustee and the commissioners at an extravagant rate. It was held that the matter complained of was an act of management within s.86 of the 1856 Act and that the petition was competent. One of the arguments against the petition being competent was that the bankrupt could have appealed against the fixing of the rate of commission by the trustee and commissioners as a "deliverance of the trustee or commissioners" within s.169 of the 1856 Act (the equivalent of s.165 of the 1913 Act), and that to allow a petition to be brought under s.86 would be to allow a "double remedy". This argument was rejected. The Court held, in short, that whether or not the fixing of the commission was a "deliverance" so as to fall within s.169, it was nonetheless clearly an act of "management", and possibly an "intromission", and fell within the terms of s.86. It was quite possible for the same act to be reviewable in two different ways.

[32] It should be noted that that case was not one in which the bankrupt had availed himself of the right of appeal under s.169; however Lord Benholme and Lord Neaves both referred to the possibility of an appeal against a trustee's deliverances within 14 days during the course of the sequestration, and adverted to the possibility of a petition under s.86 being refused if, because of timing or "the occurrence of something to give finality to the procedure", it was too late to challenge the decision in that way. Where the trustee has been granted his discharge, and there is no money left in the estate, one can see arguments why it might well be too late.

[33] In Henderson v Henderson's Trustee (1882) 10 R 188 a creditor petitioned the court under s.86 to ordain the trustee to produce an account of his intromissions with the bankrupt estate, and to allow her (the creditor) to lodge objections thereto. Her case was that in accounting with the trustees under a voluntary trust which had preceded the sequestration, the trustee had illegally allowed them to take credit for certain payments of dividend to certain creditors without deducting the value of securities held by those creditors over the estate of the debtor. The trustee's accounts detailing these payments had been audited and approved by the commissioners, and there had been no appeal against their deliverance, a reference to the possibility of an appeal under s.169. It was held that the petition under s.86 was competent but that no relevant case under that section had been stated. The Lord Justice Clerk, with whom the other members of the court concurred, said this:

"In regard to the question of how far the 86^th section of the Bankruptcy Act applies, I am of opinion that there is no relevant statement on record to bring the case under that section. The section is a useful one in enabling any person having an interest to come before the Court, and call on the trustee to account for any proceedings which may have taken place in the course of the sequestration, though no creditor appears to challenge under the direct provisions of the statute. There are cases which may easily be figured where the application of the provision would be good and salutary, but I am of opinion that it was never intended under this clause to effect a universal review of the proceedings in the sequestration, without, at least, stating some particular ground of action - a specific act of malversation or of omission, or any other specific matter in regard to which the party complaining desires to have the assistance of the Lord Ordinary or the sheriff. What the petitioner desires to do here, however, is to re-open the whole proceedings in the sequestration, and that without making any specific allegations of fault."

In that case the opinion of the Lord Justice Clerk appears to leave open the possibility of s.86 being used to challenge specific matters where fault can be alleged. In the present case, Mr Duff submits that he does make specific allegations of fault and that the present petition is a proper use of s.82 of the 1913 Act.

[34] The matter, however, does not rest there. In M'Adam v Martin's Trustee (1884) 6 R 358, a creditor on the bankrupt estate, who had received payment of a first dividend but had not appealed against the deliverance declaring a second dividend, subsequently presented a petition in the Sheriff Court seeking an order that the trustee in bankruptcy account for his intromissions as trustee and pay him the sum of £50 or such other sum as was found due to him in an accounting, all in terms of s.86 of the 1856 Act. The sheriff substitute found the trustee in bankruptcy liable to the pursuer in a sum £2 12s. 7d.. On appeal to the Court of Session, the judgment of the sheriff-substitute was recalled and the defender assoilzied. Lord Young, having noted that the sheriff-substitute had gone very carefully into the various claims and having accepted that the sheriff-substitute might well be right in thinking that the debts accepted by the trustee in bankruptcy had not been satisfactorily established, said this:

"But I do not think that this is the sort of question which is contemplated by the 86th clause of the Bankruptcy Act. The clause is not very happily expressed certainly, but I think I repeat Your Lordship's opinion in the case of Henderson when I say that cases may occur, and may readily be conceived, in which the application of the clause may be useful. I am very clearly of opinion, however, that the clause was not designed to the end of enabling creditors, or anyone else, to have an accounting by the trustee as to individual claims in the sequestration. The trustee's dealings with the claims of creditors and his deliverances on them are the subject matter of other regulations in the statute, and the Act supplies very careful machinery for appeals against these deliverances at the instance of any person interested. I cannot conceive that this 86th clause, whatever it may be understood to mean, - and I repeat that it may be very useful in certain easily figured circumstances, - was intended to supersede, or to offer an alternative course of procedure for, the procedure so anxiously provided for in those other clauses. But this action in its conception is just of the very character which those clauses contemplate. It is calling on the trustee to account for the manner in which he has disposed of individual claims on the estate, and to produce the vouchers on which he has proceeded...".

Lord Craighill considered that to come to any other conclusion would be introduce "uncertainty and confusion, and possibly great hardship" into the administration of sequestrated estates. He added this:

"It is admitted that the deliverances of the trustee on the individual claims, and the distribution of the estate in accordance with these deliverances, are absolutely final. The money is paid, and cannot be got back. Therefore, if the pursuer here is to be found entitled to succeed in his application, the money must come out of the pocket of the trustee by whom it was paid away. Of course I should have no sympathy with a trustee who has been acting conclusively or fraudulently in the interest of certain of the creditors, but on the present occasion the honesty and good faith of the trustee are not in the slightest degree impugned...".

Lord Rutherfurd Clark was of the same opinion. He said:

"I regard this application is one in which the pursuer asks the sheriff to review on their merits a number of the deliverances which the trustee has pronounced on the creditors' claims. There is nothing more in the application than that, and I think it is incompetent to entertain such an application under the 86th section of the Act."

The Lord Justice Clerk also concurred. He added this further remark:

"...I rather think the object of the 86th section of the statute has been to a certain extent misunderstood. Its main purpose - and it is an important one - is to secure that the trustee and the commissioners, or the judicial factor, shall be officers of Court, and amenable to the authority of the Lord Ordinary and the sheriff. It was intended that the Lord Ordinary and the sheriff should have jurisdiction to entertain complaints against trustees for malversation in office. It never could have been intended in the 86^th section to provide an alternative procedure for review when other parts of the statute had so anxiously dealt with that matter."

It is to be noted that only Lord Craighill appeared to place any reliance on the fact that after the various deliverances complained of the money had been paid out. The other members of the court proceeded, to my understanding, on the basis that s.86 could not be used as an alternative procedure for review where other sections of the Act provided a detailed machinery for such review.

[35] In Duke v More (1903) 6 F 190 a trustee on a sequestrated estate resigned office and handed over to the replacement trustee the whole funds in his hands without retaining a sum sufficient to meet lawyers' fees incurred by him in the course of his administration of the estate. He presented a petition under s.86 for an order that the new trustee be ordained to account for his intromissions with the funds that he had received from him, and for payment to him out of those funds of the sum of £861odd, that being the audited and taxed amount owing by him to the lawyers. The court dismissed the petition, holding that s.86 did not apply to what was, in effect, a mere claim for payment of money due by the estate. The Lord President held that the section could not apply where there was no allegation that the present trustee was not properly administering the estate. Lord Adam pointed out that the section merely authorised a party interested to secure by petition that a trustee should account for his intromissions and management, but did not allow a court to grant decree for the payment of money. He added this:

"It is obvious that section 86 does not apply to every act of management. In the cases in the Second Division to which we were referred, it was held that the section only applied to cases where malversation in office was alleged. I should be quite willing to adopt that view provided a liberal interpretation was put on the word "malversation". The section contemplates, in my view, something in the nature of mismanagement. In this petition there is no act of that character alleged, and therefore I think the petition is both incompetent and irrelevant."

I need not take anything from the opinion of Lord M'Laren. Lord Kinnear pointed out that the question of whether a petitioner was making a competent use of the process (i.e. of s.86) "must depend upon the specific character of the claim and the facts averred in support of it". He too considered that the petition was really only a petition for the payment of money. Mr Duff relied upon this case for the "liberal interpretation" put on the word "malversation" by Lord Adam.

[36] Finally I should refer to the case of Hemming v Galbraith 1908 SC 897. In that case the bankrupt offered a composition to his creditors, which was accepted by them. Thereafter, the court approved the composition and the bankrupt was subsequently discharged and reinvested in his estates. The trustee was also discharged, his accounts having been audited by the Commissioners. Subsequently, the bankrupt presented a petition against the trustee (or, by now, the former trustee) seeking an order that the trustee produce a full account of his intromissions as trustee and that he pay the pursuer the sum of £100 or such other sum as might appear to be the true balance due by him. It was argued for the trustee that the action was incompetent and that, in any event, the bankrupt's averments were irrelevant. The 1856 Act provided in s.141 that before the Court could approve a composition between a bankrupt and his creditors, the Commissioners must audit the accounts of the trustee and ascertain the balance due to all by him, and fix his remuneration, all subject to review by the Court if complained of by the trustee, the bankrupt or any of the creditors. S.142 provided that upon the Lord Ordinary or sheriff approving the composition, the sequestration shall cease and the trustee be exonered and discharged, with this proviso: "Provided, nevertheless, that the trustee and his cautioner shall be liable, on petition to the Lord Ordinary or sheriff by the bankrupt or his cautioner for the composition, to account for his intromissions and other acts as trustee." This proviso to s.142 was in a similar terms to s.86. In his petition, the bankrupt relied upon both s.86 and s.142 as providing the basis of his entitlement to seek to hold the trustee to account. The action was dismissed on the basis that it was not competent to call on the trustee to account twice over for the same intromissions; and that there were no averments that the intromissions called into question in the petition had not already been adjudicated on by the Commissioners. Lord Kinnear went further and would have held that it was, in any event, too late to seek a remedy under those sections after the trustee had been exonered and discharged.

[37] On the first question, it is useful to cite certain passages from the opinions delivered. Lord Kinnear (at p.902) saw "some difficulty" in construing s.142 so as to give the bankrupt an option between appealing in the manner prescribed under s.141 (before the trustee receives his discharge) or appealing under s.142 (after the trustee has received his discharge). At p.903, having given his opinion that it was not possible to call the trustee to account after he had obtained his discharge, Lord Kinnear said this:

"But assuming against my own impression that the trustee is still liable to account after he has been judicially discharged, I agree with the sheriff in thinking that it is incompetent to bring under section 142 a general accounting as to matters which have been already adjudicated on, and that if there is still a liability to account it must be with reference to matters which have not been settled in the course of the prior proceedings."

Lord M'Laren agreed (at p.904-5)

"...with all that Lord Kinnear has said with regard to the audit by the Commissioners and the impossibility of reading the statute as meaning that the trustee is to be called on to account a second time for the figures in his accounts that have already been investigated."

Lord Mackenzie was of the same opinion. He said the following (at p.905):

"I do not think that the effect of the 142d section of the Bankruptcy Act is to allow the bankrupt to ask for an accounting from the trustee in regard to matters that have already been adjudicated upon under section 141. To make a relevant case it would be necessary for the pursuer to aver that there were items which had not been dealt with under section 141, and I am unable to find such averments here."

I have already mentioned that the bankrupt sought to bring his claim under both s.86 and the proviso to s.142. In the arguments before the court both sections were referred to, and authorities on the scope of s.86 (including Henderson v Henderson's Trustees and Duke v More) were relied upon by the trustee. Although the opinions delivered by the members of the court referred only to the inappropriateness of proceeding under s.142 when there had been no appeal under s.141, what they said must be taken to apply equally to proceeding under s.86.

[38] As I have said, Lord Kinnear would have decided the case also on the basis that any remedy of accounting was available before but not after exoneration and discharge of the trustee. He made this clear at p.903 where he said this:

"I am, however, rather disposed to think that this remedy is enforceable before and not after the discharge of the trustee. An enactment that a trustee shall be exonered and discharged, and thereafter shall be liable to account for his intromissions, is a contradiction in terms; and I am not prepared to put any such meaning, if it be called a meaning, on an Act of Parliament if the language will reasonably bear another. ... I think the natural meaning of the series of sections is that the trustee is not to be exonered and discharged without giving the bankrupt an opportunity for investigating his administration and calling him to account, and that the true meaning of the proviso in section 142 is not that the trustee is to be first discharged and afterwards called upon to account, but that notwithstanding the provision that when the sequestration shall cease the trustee is to be discharged, the bankrupt may still call him to account for his intromissions, although all questions between him and the creditors are determined. But that implies that he is to account before he obtains a discharge, and not that he is to be discharged first and to account afterwards. Were it otherwise the discharge and exoneration to which the trustee is clearly entitled would be perfectly useless. There can be no judicial discharge and exoneration until the trustee has done everything he was bound to do in the exercise of his office, and paid over any balance which may be in his hands, and if a discharge which is followed on that complete accounting is to afford no answer to a new action of accounting it goes for nothing. I cannot accept a reading which would reduce the judicial discharge prescribed by statute to a mere futility."

[39] It is to be noted that in the 4^th edition of Goudy published in 1914, the statement at p.358 that the bankrupt can call the trustee to account for his management of the sequestrated estate under s.82 of the 1913 Act, adds a footnote under reference to Hemming v Galbraith that: "He must however do so before trustee is discharged". It is clear that the then editor (Mr Fyfe) regarded that case as an authority applicable to s.82 of the 1913 Act, as well as to ss.86 and 142 of the 1856 Act.

[40] These authorities and references appear to me to justify Mr Jones in both his main submissions.

[41] They support his first submission, namely that where the bankrupt has already availed himself of the appeal process laid down by the statute as a means of challenging decisions made by the trustee as to the acceptance of claims by creditors against the estate, he cannot be allowed to raise those same challenges by means of proceedings under s.82. It is not necessary in this case to go further, and consider whether the mere existence of an appeal process necessarily precludes the use of s.82 as a means of challenging that type of decision, though I think that that is the better view. It is sufficient that in the present case the bankrupt, Mr Duff, has in fact appealed under s.165 of the 1913 Act against the decisions by the trustee. He has failed in that appeal (before Lord Kincraig). In those circumstances it is, in my view, not competent for him to raise the same challenge to the same decisions by way of this petition under s.82.

[42] I note that Lord Morison took a similar view when dealing with Mr Duff's opposition to the trustee's petition for exoneration and discharge. In so far as the allegations which Mr Duff sought to advance in support of his opposition had already been the subject of adjudication (with a right of appeal to the Court, whether that right was exercised or not), it would be incompetent to raise them again in opposition to the trustee's discharge. It seems to me that this view proceeds upon the same reasoning as underlies the decisions to which I have referred.

[43] Mr Jones's second submission, namely that it was incompetent to seek an accounting under s.82 after the trustee had obtained an order for his exoneration and discharge, is supported by the reasoning of Lord Kinnear in Hemming v Galbraith and by the footnote at p.358 of the 4^th ed. of Goudy. It is also impliedly supported by the reasoning of Lord Craighill in M'Adam v Martin's Trustee, since by that time money will have been paid out to creditors and will be irrecoverable from them. I do not need to consider whether that proposition is subject to exceptions. There may be circumstances, as noted in an article by Gordon Junor, A Bankrupt's "Radical Right" in his Sequestrated Estate - Suing the Trustee? (2007 SLT 215), in which the sequestration process is revived even after discharge of the trustee because further bankrupt estate arises - conceivably the conduct of the trustee in respect of that further estate might have been amenable to challenge under s.82. There may be other exceptions. However, I do not need to explore these matters. No such exceptional circumstances are raised here. The trustee has obtained his discharge, and whatever other criticisms there are of the process by which he obtained his discharge, there are no current proceedings to set it aside.

[44] In the report of the case in the Inner House (Duff's Trustee, Petitioner 1993 SC 466) it was accepted by counsel for both parties that "the effect of the exoneration and discharge of the trustee would be to bar the respondent [Mr Duff] from making further claims against him as trustee." It seems to me from a consideration of the cases that that concession on behalf of Mr Duff at that time was well founded. Further, it cannot make a difference that the petition for exoneration and discharge was not in existence at the time these proceedings under s.82 were raised. But the fact is that an order has been made for exoneration and discharge. While this petition might not have been incompetent on this ground when it was presented, it now stands as a petition for relief which the court cannot competently grant. This, so it seems to me, is an area in which competency and relevancy may overlap.

[45] I would not have accepted Mr Jones' third submission, that the averments made by Mr Duff in the petition lacked any basis to call into question the trustee's conduct in admitting the claims. It seems to me that what is said in the petition identifies coherently an alleged breach of duty, sufficient if proved to amount to a "malversation" in the broad sense favoured by Lord Adam. I cannot, of course, form any view on the merits of these allegations, but had this been the only point made by Mr Jones, I would have allowed the petition to proceed. As it is not the only point, my decision on it is irrelevant to the outcome of this case.

Disposal
[46] In those circumstances I shall sustain the first, second and third pleas-in-law for the respondent and dismiss the petition.