SHERIFFDOM OF GRAMPIAN, HIGHLAND and ISLANDS at LERWICK

 

Case No. SQ4/11

JUDGEMENT of Philip Mann, Esq. Sheriff of Grampian, Highland and Islands at Lerwick in the Sequestration Petition of Neil Roy Donald   Eileen Margaret Nicolson or Donald PURSUER Against Neil Roy Donald DEFENDER

 

Act: Pearson

 

Alt: Tait

 

Lerwick October 2011

 

The Sheriff having resumed consideration of the cause Dismisses the Petition; Finds the Respondent liable to the Petitioner in the whole expenses of the cause; Allows an account thereof to be given in and remits the same when lodged to the auditor of court to tax and to report.

 

 

 

 

 

 

Sheriff Philip Mann

 

 

Note/

 

 

 

 

Note

 

1 Introduction

 

1.1 This is a Petition for sequestration under the Bankruptcy (Scotland) Act 1985 ("the 1985 Act") at the instance of a woman against her former husband arising out of, firstly, a debt due under an extract registered Minute of Agreement between the parties and, secondly, an unsatisfied decree for expenses.

 

1.2 The Petition was presented for warrant on 9 August 2011 and, following certain handwritten amendments having been appended to the Petition, a warrant was granted on 12 September 2011 to cite the Respondent to appear in this court on 20 September 2011.

 

1.3 On 20 September 2011 the case called before me when the Respondent appeared through his principal agent, Mr Baijal, solicitor. The Petitioner was represented by Mrs Gordon, solicitor as local agent. Mr Baijal maintained that the Petition was incompetent in respect that it had been presented disconform to Form 1 in Appendix 1 to the Act of Sederunt (Sheriff Court Bankruptcy Rules) 2008 as amended ("the 2008 Rules"). Parties were not in a position to fully argue that matter at that time. Mr Baijal then intimated that the debt was likely to be paid within a short period of time and, in the result, the case was continued to 18 October 2011 for settlement of the debt, reserving the Respondent's challenge to competency.

 

1.4 On 18 October 2011 the case was continued to enable a date to be identified for a hearing in relation to expenses only. The case ultimately called before me again on 20 October 2011 when the Petitioner was represented by Miss Pearson as local agent and the Respondent was represented by Miss Tait also as local agent.

 

1.5 At the hearing on 20 October 2011 I was advised that the debt had been settled and that the only live issue was the question of expenses.

 

 

2. Submissions for the Respondent

 

2.1 Miss Tait argued that there were so many departures from Form 1 that the Petition was essentially a fundamental nullity. She argued that these proceedings were governed by the 1985 Act and by the 2008 Rules neither of which had any provision for allowing amendment to the Petition. Miss Tait maintained that Ordinary Cause Rule 18.2, which allows amendment of ordinary cause pleadings, had no application to these proceedings. Accordingly, the nullity could not be rectified and the Petition fell to be dismissed on the basis of incompetency. That being the case, it followed that expenses should be awarded to the Respondent.

 

2.2 Miss Tait's criticisms of the Petition were these:

 

1. Crave 4 was not in accordance with Form 1. It sought the appointment of an interim trustee. That being the case, Form 1, per the note to its article 5 of condescendence required that the Petition should narrate the circumstances rendering such appointment necessary. The Petition was silent on these matters

 

2. In article 1 of condescendence the Petitioner founded upon domicile for jurisdiction, whereas Form 1 clearly indicated that the ground of jurisdiction was habitual residence. This reflected section 9(1) of the 1985 Act. Further, the Petitioner averred residence for a period of 3 months whereas the period referred to in Form 1 was one year. Accordingly, the Petitioner had failed to demonstrate that the court had jurisdiction

 

3. Article 2 of condescendence contained averments which were additional to those required by Form 1.

 

4. The plea in law did not conform to the wording of Form 1

 

5. Finally, the Petition was undated, contrary to the requirement of Form 1.

 

 

 

3 Submissions for the Petitioner

 

3.1 Miss Pearson moved for expenses in favour of the Petitioner. She accepted that there were errors in the Petition which meant that it did not conform exactly to Form 1. However, these errors were minor in effect. She pointed to Paragraph 1(3) of the Act of Sederunt which provides that "reference to a form shall be construed as a reference to the form so numbered in Appendix 1 to the rules or a form substantially to the same effect, with such variations as circumstances may require". She maintained that the Petition was substantially to the same effect as Form 1.

 

3.2 Miss Pearson pointed out (and I did not understand this to be disputed by Miss Tait) that but for the Petition having been presented the debt would have remained unpaid or settlement of it would have been delayed further. Service of the Petition against the Respondent had, therefore, achieved the intended result.

 

3.3 Miss Pearson accepted that jurisdiction had to be founded on habitual residence. The Petitioner had pled that the Respondent was believed to be domiciled in Lerwick and was believed to have lived there for more than 3 months immediately preceding the raising of the action. She maintained that the Court could reasonably make an inference from these pleadings that the Respondent was habitually resident within the jurisdiction of this court.

 

3.4 Miss Pearson accepted that the 1985 Act and the 2008 Rules were silent as to amendment but maintained that there was no reason, in principle, why the Ordinary Cause Rules could not be employed to allow amendment of the Petition. She maintained that the Petition was not fundamentally flawed and could therefore be amended. She submitted to the effect that equity favoured the Petitioner and that she should be awarded the expenses of the Petition against the Respondent.

 

4. Discussion and Decision

 

4.1 The initial question is whether or not the Petition was presented in a form substantially to the same effect as Form 1 attached to the 2008 Rules. If it was, then the question would be whether or not amendment could have been allowed so as to meet the Respondent's objections. If it was not, then the question would be whether or not it was fundamentally flawed so that it could not have been cured by amendment, in any event.

 

4.2 I would answer the first question in the affirmative. Reading the Petition as a whole it appears to me to be substantially to the same effect as Form 1. There are clearly some departures from Form 1 but these are not so significant as to render the Petition fundamentally null.

 

4.3 As to amendment, paragraph 9.41 of MacPhail "Sheriff Court Practice", Third Edition, makes it clear that the court retains an inherent jurisdiction which can be exercised in favour of curing defects and suggests that the court will not readily treat a defect in the form of a pleading as fundamental, rendering the pleading a nullity, except where there is such prejudice to the other party arising from the defect that the issue must be decided in his favour ex debito justitiae. I find it difficult in the circumstances of this case to see wherein lies any prejudice to the Respondent arising from the defects in the Petitioner's pleadings. Had it been necessary for me to do so, in the event of the matter not having been settled, I would have allowed the Petitioner to amend. I would have done so in the exercise of my inherent jurisdiction without relying at all on the Ordinary Cause Rules.

 

4.4 Bearing the foregoing in mind, Miss Tait's criticisms, taken in the order in which they are narrated above, would fall, or would have fallen, to be dealt with as follows:

 

1. Reading the Petition as a whole it is clear that the Petitioner seeks an award of sequestration. It is inherent in that that a Trustee must be appointed. The absence of averments justifying the appointment of an interim trustee simply means that the court is not entitled to appoint an interim trustee. In my view, the fact that crave 4 merely seeks the appointment of an interim trustee and nothing more does not render the Petition fundamentally null. Crave 4 is capable of amendment simply by deleting the word "interim".

 

2. This is undoubtedly the most serious flaw in the Petition. Section 9(1) of the 1985 Act specifies two grounds of jurisdiction in Petitions to the Sheriff, namely an established place of business within the Sheriffdom at the relevant time or habitual residence within the Sheriffdom at the relevant time. Section 9(5) defines "relevant time" as any (my emphasis) time within the year immediately preceding the date of presentation of the Petition. The ground relevant to this Petition is habitual residence. The Petition does not refer to habitual residence. It refers to domicile, which is a different concept. However, it also avers that the Respondent is believed to have lived in Lerwick for more than 3 months immediately preceding the raising of the Petition. I agree with Miss Pearson that it can be readily inferred from that that the Respondent was habitually resident within the Sheriffdom at a time which falls within one year immediately preceding the date of presentation of the Petition. I would have allowed amendment by addition of words to spell that out. In my view, this would not have altered the substance of what was averred and would not have caused any prejudice to the Respondent. I did not understand Miss Tait to complain that the Respondent was not, in fact, habitually resident within the Sheriffdom. For the avoidance of doubt I should say that at the hearing I questioned whether the reference to time in article 1 of the statement of facts in Form 1 relates to both residence and place of business. Having now had the opportunity to fully consider the matter I am clear that it does, although that article would read better if the word "resides" were replaced with the word "resided".

 

3. Form 1 requires a narration of the ground founded upon in terms of section 7 of the 1985 Act. This is what article 3 of condescendence does. Miss Tait's criticism in this regard is unfounded

 

4. Although the plea in law does not conform exactly to the wording in Form 1 it is substantially to the same effect.

 

5. I am not entirely clear why Form 1 should require the "date of Petition" to be inserted on the face of the Petition. The date of presentation of the Petition is critical to the question of jurisdiction but "the date of presentation" would not be governed by the date inserted on the face of the Petition but by the date when the Petition, in acceptable form, is presented to the court. Effectively, this would be the date of the warrant to serve, at latest. I do not regard the omission to insert a date on the Petition as being material.

 

4.5 I am satisfied that the Petition as warranted in this case was substantially to the same effect as Form 1 and that any defects therein could legitimately have been cured by amendment so as to allow the cause to continue had it not settled. The Petition falls to be dismissed, not through fundamental nullity but because it is no longer necessary. The Petitioner has been completely successful in that the Petition has secured the desired result, namely satisfaction of the debt. Equity clearly favours the Petitioner and there is no reason that I can see for expenses to be dealt with otherwise than by an award in favour of the Petitioner.

 

4.6 Whilst I have found in favour of the Petitioner this case does, however, illustrate the need for great care to be taken in the preparation of Petitions of this nature.