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A similar statement is made in Wallace on Bankruptcy, p. 142.
In the circumstances which have arisen a new election appears to be necessary.
It would appear that the proper course is that application should be made to the Court of Session to order a new meeting of creditors to elect a trustee (Goudy on Bankruptcy, p. 204; Wallace on Bankruptcy, p. 139). If, however, any of the parties interested is of opinion that the Sheriff has power to order such a meeting to be held, I shall consider any application which may be made.
stated and the disqualification be afterwards In the case of Wiseman v. Skene one of the Sinclair's found to exist, the person chosen by the minority candidates for the trusteeship had an apparent Sequestrawill not be declared elected, but a new election minority of votes in his favour, and he declined must take place. So, where the personal to proceed with the competition. It was held objection supervenes after a vote, a new election that the creditors who supported him had a must take place." title to insist in the competition, and they were successful in shewing that he had a real majority of votes. The Sheriff-Substitute, in the circumstances, ordered a new meeting of the creditors for the election of a trustee. An appeal to the Court of Session was taken, and the judgment of the Sheriff-Substitute was adhered to. At the end of his opinion the Lord President said: "In these circumstances there was, I think, only one course open to the Sheriff, the course which he has adopted, namely, to appoint of new a meeting of creditors for the appointment of a trustee.' In neither of the above two cases does any question appear to have been raised in the Court of Session as to the right of the Sheriff to order the new meeting. The note in Murdoch on Bankruptcy (p. 278) is of little assistance, as it merely refers to the case of Mann and says: "The Sheriff ordered a new meeting to elect another trustee, where he found the election null." In Struthers (1861, 23 D. 702) both candidates were declared ineligible, and the Court of Session, on the petition of a creditor, appointed another meeting to be held for electing a trustee. In Jeffrey & Co. v. Kerr (1828, 6 S. 968) neither of the candidates applied for confirmation, and the Court of Session, on an application of a creditor, ordered a new meeting to be held. In Mitchell (1860, 22 D. 632), where the trustee appointed by the creditors refused to accept, a similar order was made by the Court of Session. In Macdonald (1861, 23 D. 719), in consequence of delay caused by detention of the mail packet, the Court of Session of new appointed a meeting of creditors. In Steuart v. Chalmers (1864, 2 M. 1216) the creditors met and resolved not to
The Sheriff-Substitute was then moved to fix a diet for a meeting of creditors to appoint a
On 18th March 1927 the Sheriff-Substitute refused the motion.
The Sheriff-Substitute (D. M. Wilson, K.C.) [after referring to the procedure and quoting section 63 of the Bankruptcy (Scotland) Act, 1913]. The only authority conferred on the Sheriff by this section is to appoint, by the deliverance awarding sequestration, one meeting of creditors to be held within a limited time. There is no provision for the event of the creditors failing to elect a trustee at this meeting, or for the event of the trustee being found to be disqualified. By the seventy-first section of the Act it is provided, inter alia, as follows: [The Sheriff-Substitute quoted the section]. It was admitted by the agent who made the motion that he could not found on this section in support of the motion, as it was not applicable to the circumstances of the pre-proceed further with the sequestration, and an sent case.
In support of the motion I was referred to Mann v. Dickson (1857, 19 D. 942); Wiseman v. Skene (1870, 8 M. 661); and to Murdoch on Bankruptcy (5th ed., p. 278, Note 3). In the case of Mann v. Dickson the candidate for the trusteeship with the majority of votes had procured the vote of a creditor by the promise of employment. The Sheriff-Substitute held the election null, and after consultation with the Sheriff, and under reference to a practice in the Court of Session under the old statute as indicated in certain cases, he himself ordered a meeting to be held for the election of a new trustee other than the said candidate. An appeal taken to the Court of Session was dismissed, but the appeal did not raise the question as to the Sheriff's right to order the meeting.
application to the Court of Session by one of
Sinclair's are consequently of no weight. An application Sequestra- to the Sheriff was quite incompetent for the tion. purpose contemplated by the prayer of the petition. The proper course was to get another meeting appointed for the election of a trustee, and as no machinery exists for this under the statute in the circumstances which have occurred, the application has been properly made to this Court (see also Todd's Sequestration, 1908, 24 S.C.R. 160 at p. 167).
In Goudy on Bankruptcy (4th ed., p. 204) it is said that there are various occasions on which a new meeting may require to be held for the election of a trustee de novo, some of these being provided for by statute, others by the inherent equitable jurisdiction of the Court of Session." After referring to the provisions of section 71 of the Act of 1913 above quoted, it is said: There are, however, a number of cases where a new meeting may require to be held for which the statute makes no provision. This may occur when the person who has been elected as trustee declines to accept the office, or is found disqualified or unable to act, and no one has been chosen in succession, and there is no competing candidate who can be elected. Again, it may be that the statutory requirement has become incapable of being carried out, or that the creditors have failed to make any election at the first meeting. In such cases the new meeting, which must be held to elect another trustee, is ordered by the Court of Session, ex nobile officio."
Dealing with the election of a new trustee, Goudy on Bankruptcy also says (p. 215): "It is not competent for the Sheriff to order a meeting to be convened to elect a new trustee in any case for which the statute does not give him express authority" (Hutton, 1872, 10 M. 620). Wallace on Bankruptcy (2nd ed., p. 139) says: "Except when authorised by statute, the Sheriff has no power to order a new meeting. The Court of Session, however, in the exercise of its nobile officium, may order a new meeting in circumstances for which the Act makes no provision," and various illustrations are given. It was pointed out that the cases of Mann v. Dickson and Wiseman v. Skene (supra), which were among the cases referred to, did not support the above statement, as the meeting was ordered by the Sheriff.
In the case of Hutton (supra) the estates of a bankrupt had been sequestrated by the Sheriff of Lanarkshire, and a trustee was duly elected and confirmed. After realising certain funds he was discharged, but the bankrupt was not discharged. Additional funds having emerged, a meeting of creditors was convened by order of the Sheriff on an application to him by a creditor, and a new trustee was elected and confirmed. The new trustee then presented a
petition to the Court of Session craving warrant on the keeper of records to deliver up the Sederunt Book to him.
After hearing counsel in support of the application, the Court held that the petitioner had not been duly elected, in respect that it is only on the death, resignation, or removal of a trustee that the Sheriff has power, under the Bankruptcy Act, 1856, section 74, to convene a meeting of creditors for the election of a new trustee, and that in other cases the only competent course is to apply, not to the Sheriff, but to the Court of Session, to appoint a meeting of creditors for the election of such trustee. Section 71 of the 1913 Act is equivalent to section 74 of the 1856 Act. This case of Hutton was subsequent in date to the two cases of Mann v. Dickson and Wiseman v. Skene, founded on by the claimants. It is the case, however, that Hutton's case related to the appointment of a new trustee where there had been a former appointment, whereas the meeting desired in the present case is for an original appointment, the trustee proposed having been disqualified. But the only powers possessed by the Sheriff, as regards appointing a meeting of creditors for the election of a trustee, appear to be those conferred by statute and above referred to. The power as regards the original election of a trustee, conferred by section 63 of the Act of 1913, has been exhausted by the appointment of the meeting of creditors in the interlocutor awarding sequestration. That meeting has proved ineffective, and admittedly section 71, which confers power on the Sheriff to appoint a meeting of creditors in certain circumstances, does not apply to the existing circumstances.
When, owing to some mistake or accidental circumstances, the statutory meeting has not been held at the time appointed, it is the Court of Session which, ex nobile officio, appoints a new meeting (Goudy on Bankruptcy, p. 223). In the case of defects in the Gazette notices, the Sheriff has no power to rectify errors, but the Court of Session will, if necessary, exercise its nobile officium (Goudy on Bankruptcy, p. 150). In my opinion the procedure in the present case falls to be regulated by the general principle that, in the absence of authority conferred by statute on the Sheriff, the application should be to the Court of Session.
I accordingly refuse the motion.
It was stated at the hearing, on the authority of the agent's Glasgow correspondents, that the procedure suggested was in accordance with the practice in the Glasgow Sheriff Court, but subsequently the statement was modified. In the circumstances I have thought it right to consult the Sheriff as to the powers of the Sheriff in the matter. The
Sheriff's opinion confirms the view above expressed, that the application cannot competently be granted in the Sheriff Court, and that it should be made to the Court of Session.
Agent for Mr Guthrie, R. A. Macvicar, Solicitor, Oban (for George E. Price, Solicitor, Glasgow); Agent for Mr Black, David Stewart, Solicitor, Oban.
Note.-On 4th April 1927 a creditor presented a petition to the Second Division of the Court of Session praying the Court, in the exercise
of its nobile officium, to order a new meeting of Sinclair's creditors to be held for the purpose of electing Sequestraa trustee. On 14th April 1927, Lord Black- tion. burn (Lord Ordinary officiating on the Bills) granted the prayer of the petition and ordered a new meeting to be held. The expense of the petition was allowed out of the sequestrated estates.
Counsel for Petitioner, MacLean; Agents, Ross & Ross, S.S.C., Edinburgh, and A. A. Stewart & Price, Glasgow.
INDEX OF CASES
NAMES OF PARTIES.
Note. The figures refer to the number of the Page, and not to the number of the Case.
Aberdeen Lime Co. Ltd., Cruickshank v., 39.
Advocate, Lord, Moffat's Trs. v., 50.
Anderson, William, Ltd., The Baptist Union of Scotland Lyon, Macfarlane v., 79.
and Henry Nelmes & Co. v., 57.
Annandale Steamship Co. Ltd., Kerr v., 31.
Argyll, Duke of, v. Campbeltown Coal Co. Ltd., 42.
Baptist Union of Scotland and Henry Nelmes & Co. v.
William Anderson Ltd., 57.
Barr, M'Ghie v., 76.
Boyle v. Scott, 81.
Brady, Thomson v., 20.
Loftus v. Co-operative Insurance Society Ltd., 28.
M'Cavitt v. M'Millan, 63.
M'Ghie v. Barr, 76.
M'Kie, Thom v., 59.
M'Millan, M'Cavitt v., 63.
Macfarlane v. Lyon, 79.
Mackechnie v. Edrom Parish Council, 49.
Macmillan, Corson v., 13.
Maxwell, Naysmith v., 4.
Brisbane & Beattie's Dairies, Kilmaurs Dairy Association Moffat's Trs. v. Lord Advocate, 50.
Brown's Exr. v. General Accident, Fire, and Life Assurance
Moore, Young's Paraffin Light and Mineral Oil Co. Ltd.
Muir, Murphy v., 55.
Murphy v. Muir, 55.
Murray, Hush v., 7.
Buckhaven Magistrates, Fowler v., 70.
Callender's Trs., Free v., 17.
Campbeltown Coal Co. Ltd., Duke of Argyll v., 42.
Co-operative Insurance Society Ltd., Loftus v., 28.
Cruickshank v. Aberdeen Lime Co. Ltd., 39.
Cupar District Committee v. Gysels, 22.
Drumsheugh Baths Club Ltd., Heriot's Trust v., 2.
Edrom Parish Council, Mackechnie v., 49.
Fowler v. Buckhaven Magistrates, 70.
Free v. Callender's Trs., 17.
Ltd., Brown's Exr. v., 11.
Murray, Kirk's Trs. v., 61.
Naysmith v. Maxwell, 4.
Nelmes, Henry, & Co. v. William Anderson Ltd., 57.
Park v. Somerville, 24.
Renfrew, County of, Upper District Committee . Wod-
Ross v. Cunningham, 48.
Russell, Struthers & Sons v., 67.
Scott, Boyle v., 81.
Scott v. Scott, 6.
Shaw's Tr. v. Shaw, 37.
Sinclair's Sequestration, 82.
Smith and Others-Petrs., 18.
General Accident, Fire, and Life Assurance Corporation Somerville, Park v., 24.
Gooseman, Christie v., 21.
Graham v. Young and Another, 25.
Gysels, Cupar District Committee v., 22.
Struthers & Sons v. Russell, 67.
Thom v. M'Kie, 59.
Thomson v. Brady, 20.
Watt, Murray v., 45.
Jackson & Sons (Clothiers) Ltd. v. Hill Brothers Ltd., 58.
Kerr v. Annandale Steamship Co. Ltd., 31.
Kilmaurs Dairy Association v. Brisbane & Beattie's
Kirk's Trs. v. Murray, 61.
Levin, Mendel-Petr., 73.
Livingston, Waycott v., 31.
Warren & Stuart v. Brownlie's Tr., 26.
Waycott v. Livingston, 31.
Welsh v. Swan, 9.
Woddrop's Tr., Upper District Committee of the County of
Renfrew v., 68.
Wood v. Lumsden, 15.
Y. v. Z., 74.
Young and Another, Graham v., 25.
Young's Paraffin Light and Mineral Oil Co. Ltd. v. Moore,
INDEX OF CASES
Note.-The figures refer to the number of the Page, and not to the number of the Case.
Agency-Principal and agent-Written contract entered
notary public who is acting as agent for the deponent,
Bankruptcy - Sequestration Affidavit Oath before
- Preferential claims - Ex-