Office of Public Sector Information
Section 11.
1 In section 3 (duties of the permanent trustee) at the end there shall be added the following subsections—
“(5) Paragraph (g) of subsection (1) above and subsection (3) above shall not apply in any case where the permanent trustee is the Accountant in Bankruptcy.
(6) A permanent trustee may apply to the sheriff for directions in relation to any particular matter arising in the sequestration.
(7) Where the debtor, a creditor or any other person having an interest is dissatisfied with any act, omission or decision of the permanent trustee, he may apply to the sheriff and, on such an application being made, the sheriff may confirm, annul or modify any act or decision of the permanent trustee or may give him directions or make such order as he thinks fit.”
2 For section 13 (appointment and resignation of interim trustee) there shall be substituted the following section.
(1) Where, under section 1A(2) of this Act, the court removes from office an interim trustee, the court shall, on the application of the Accountant in Bankruptcy, appoint a new interim trustee.
(2) Without prejudice to section 1A(2) of this Act or to subsection (1) above, where the court is satisfied that an interim trustee—
(a) is unable to act (whether by, under or by virtue of a provision of this Act or from any other cause whatsoever); or
(b) has so conducted himself that he should no longer continue to act in the sequestration,
the court, on the application of the debtor, a creditor or the Accountant in Bankruptcy, shall remove from office the interim trustee and appoint a new interim trustee.
(3) An interim trustee (not being the Accountant in Bankruptcy) may apply to the court for authority to resign office; and if the court is satisfied that the grounds mentioned in paragraph (a) or (b) of subsection (2) above apply in relation to the interim trustee, it shall grant the application.
(4) Where, following an application under subsection (3) above, the interim trustee resigns office, the court shall appoint a new interim trustee.
(5) Where the interim trustee has died, the court, on the application of the debtor, a creditor or the Accountant in Bankruptcy, shall appoint a new interim trustee.
(6) No one (other than the Accountant in Bankruptcy) shall act as interim trustee in a sequestration if he would, by virtue of section 24(2) of this Act, be disqualified from acting as permanent trustee in that sequestration; but where an interim trustee is, by virtue of this subsection, prohibited from so acting, he shall forthwith make an application under subsection (3) above.
(7) Subsections (1) and (2) of section 2 of this Act shall apply as regards the appointment of an interim trustee under this section as if for any reference to—
(a) the court awarding sequestration of the debtor’s estate, there was substituted a reference to the court appointing a new interim trustee; and
(b) the petition for sequestration there was substituted a reference to the application under this section for the appointment of a new interim trustee.”
3 In section 14 (recording of award of sequestration) in subsection (4) for the word “shall” where it first occurs there shall be substituted the word “may”.
4 In section 15 (further provisions relating to the award of sequestration) for subsection (6) there shall be substituted the following subsection—
“(6) The interim trustee shall, as soon as an award of sequestration has been granted, publish in the Edinburgh Gazette a notice—
(a) stating that sequestration of the debtor’s estate has been awarded;
(b) inviting the submission of claims to him; and
(c) giving such other information as may be prescribed.”
5 (1) Section 16 (petitions for recall of sequestration) shall be amended as follows.
(2) In subsection (4)(a) after the word “of” there shall be inserted the words “the award of”.
6 In section 18(2) (powers to enable preservation of the debtor’s estate)—
(a) for the words “2(1)(a)” there shall be substituted the words “2(4)(a)”; and
(b) at the end there shall be added—
“(h) carry on any business of the debtor or borrow money in so far as it is necessary for the interim trustee to do so to safeguard the debtor’s estate.”
7 (1) For section 19 (requirement on debtor to deliver list of assets and liabilities) there shall be substituted the following section—
(1) Where the petitioner for sequestration is the debtor he shall, not later than 7 days after the appointment of the interim trustee (where he is not the Accountant in Bankruptcy), send to the interim trustee such statement of assets and liabilities as was lodged in court in pursuance of section 5(6A)(a) of this Act.
(2) Where the petitioner for sequestration is a creditor or a trustee acting under a trust deed, the debtor shall, not later than 7 days after having been notified by the interim trustee as mentioned in section 2(7) of this Act, send to the interim trustee a statement of assets and liabilities.
(3) If the debtor—
(a) fails to send to the interim trustee in accordance with subsection (1) or (2) above such statement of assets and liabilities; or
(b) fails to disclose any material fact in such statement of assets and liabilities; or
(c) makes a material misstatement in such statement of assets and liabilities,
he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale or to imprisonment for a term not exceeding 3 months or to both such fine and imprisonment.
(4) In any proceedings for an offence under subsection (3) above, it shall be a defence for the accused to show that he had a reasonable excuse for—
(a) failing to send to the interim trustee in accordance with subsection (1) or (2) above such statement of assets and liabilities; or
(b) failing to disclose a material fact; or
(c) making a material misstatement.”
8 (1) Section 20 (duty to prepare statement of debtor’s affairs) shall be amended as follows.
(2) For subsection (1) there shall be substituted the following subsection—
“(1) When the interim trustee has received the statement of assets and liabilities, he shall, as soon as practicable, prepare a statement of the debtor’s affairs so far as within the knowledge of the interim trustee and shall indicate in the statement of the debtor’s affairs whether, in his opinion, the debtor’s assets are unlikely to be sufficient to pay any dividend whatsoever in respect of the debts mentioned in paragraphs (e) to (h) of section 51(1) of this Act.”
(3) In paragraph (a) of subsection (2) for the words “a copy of the debtor’s list” there shall be substituted the words “the statement”.
(4) After subsection (5) there shall be inserted the following subsection—
“(5A) Subsections (2) and (3) above do not apply in any case where the Accountant in Bankruptcy is the interim trustee.”
9 Before section 21 there shall be inserted the following section—
A meeting of creditors called by the interim trustee under section 21 or 21A of this Act shall, in this Act, be referred to as “the statutory meeting”.”
10 (1) Section 21 (calling of statutory meeting) shall be amended as follows.
(2) In subsection (1) for the words from the beginning to “statutory meeting”)” there shall be substituted the words “Where the interim trustee is not the Accountant in Bankruptcy he shall call the statutory meeting”.
(3) After subsection (1) there shall be inserted the following subsection— “(1A) The statutory meeting shall be held at such time and place as the interim trustee determines.”
(4) After subsection (3) there shall be inserted the following subsection—
“(4) This section does not apply in any case where the Accountant in Bankruptcy is the interim trustee.”
11 (1) Section 23 (proceedings at statutory meeting before the election of permanent trustee) shall be amended as follows.
(2) In subsection (3)—
(a) for paragraph (a) there shall be substituted the following paragraph—
“(a) shall make available for inspection—
(i) the statement of assets and liabilities; and
(ii) his statement of the debtor’s affairs prepared under section 20(1) of this Act;”; and
(b) for paragraph (d) there shall be substituted the following paragraph—
“(d) shall determine whether it is necessary to revise his statement of the debtor’s affairs and, if he determines that it is necessary to revise the statement, he shall do so either at, or as soon as possible after, the statutory meeting.”
(3) For subsection (5) there shall be substituted the following subsection—
“(5) Where the interim trustee has revised his statement of the debtor’s affairs, he shall, as soon as possible after the statutory meeting, send a copy of the revised statement to every creditor known to him.”
12 (1) Section 24 (election of permanent trustee) shall be amended as follows.
(2) For subsection (1) there shall be substituted the following subsection—
“(1) At the statutory meeting, the creditors shall, at the conclusion of the proceedings under section 23(3) of this Act, proceed to the election of the permanent trustee.”
(3) In subsection (2) at the end there shall be inserted the following paragraphs—
“(e) a person who has not given an undertaking, in writing, to act as permanent trustee;
(f) the Accountant in Bankruptcy.”
(4) After subsection (3) there shall be inserted the following subsections—
“(3A) In any case where the Accountant in Bankruptcy is the interim trustee, if—
(a) no creditor entitled to vote in the election of the permanent trustee attends the statutory meeting; or
(b) no permanent trustee is elected,
the Accountant in Bankruptcy shall forthwith report the proceedings at the statutory meeting to the sheriff and section 25A of this Act shall apply.
(3B) Where a report is made in pursuance of subsection (3A) above, the Accountant in Bankruptcy may apply to the sheriff for the grant of a certificate for the summary administration of the sequestration of the debtor’s estate.”
(5) In subsection (4) at the beginning there shall be inserted the following words— “In any case where the Accountant in Bankruptcy is not the interim trustee,”.
(6) After subsection (4) there shall be inserted the following subsection—
“(4A) Where a report is made in pursuance of subsection (4) above, the interim trustee may apply to the sheriff for the grant of a certificate for the summary administration of the sequestration of the debtor’s estate.”
13 (1) Section 25 (confirmation of permanent trustee) shall be amended as follows.
(2) After subsection (2) there shall be inserted the following subsection—
“(2A) Where a report is made in pursuance of subsection (1) above, the interim trustee may apply to the sheriff for the grant of a certificate for the summary administration of the sequestration of the debtor’s estate.”
(3) In paragraph (b) of subsection (6) at the end there shall be added the words “and giving such other information as may be prescribed”.
14 (1) Section 26 (termination of functions of interim trustee) shall be amended as follows.
(2) In subsection (1) for the words from “a” to “liabilities” there shall be substituted the words “the statement of assets and liabilities, and a copy”.
(3) In subsection (4) after the word “issue” there shall be inserted the words “; and the decision of the sheriff on such an appeal shall be final”.
(4) After subsection (5) there shall be inserted the following subsection—
“(5A) This section does not apply in any case where the Accountant in Bankruptcy is the interim trustee.”
15 (1) After section 26 (termination of interim trustee’s functions) there shall be inserted the following section.
(1) This section applies in any case where the Accountant in Bankruptcy was the interim trustee and some other person becomes the permanent trustee.
(2) The Accountant in Bankruptcy shall, on confirmation of the permanent trustee in office, hand over to the permanent trustee everything in his possession which relates to the sequestration and which he obtained in his capacity as interim trustee (including the statement of assets and liabilities); and thereupon he shall cease to act as interim trustee.
(3) The Accountant in Bankruptcy shall, not later than 3 months after the confirmation in office of the permanent trustee, supply to the permanent trustee—
(a) his accounts of his intromissions (if any) as interim trustee with the debtor’s estate;
(b) a determination of his fees and outlays calculated in accordance with regulations made under section 69A of this Act; and
(c) a copy of the notice mentioned in subsection (4)(b) below.
(4) The Accountant in Bankruptcy shall send to the debtor and to all creditors known to him—
(a) a copy of the determination mentioned in subsection (3)(b) above; and
(b) a notice in writing stating—
(i) that the Accountant in Bankruptcy has commenced the procedure under this Act leading to discharge in respect of his actings as interim trustee;
(ii) that the accounts of his intromissions (if any) with the debtor’s estate are available for inspection at such address as the Accountant in Bankruptcy may determine;
(iii) that an appeal may be made to the sheriff under subsection (5) below; and
(iv) the effect of subsection (7) below.
(5) The permanent trustee, the debtor and any creditor may appeal to the sheriff against—
(a) the determination of the Accountant in Bankruptcy mentioned in subsection (3)(b) above;
(b) the discharge of the Accountant in Bankruptcy in respect of his actings as interim trustee; or
(c) both such determination and discharge.
(6) An appeal under subsection (5) above shall be made not more than 14 days after the issue of the notice mentioned in subsection (4)(b) above; and the decision of the sheriff on such an appeal shall be final.
(7) Where—
(a) the requirements of this section have been complied with; and
(b) no appeal is made to the sheriff under subsection (5) above or such an appeal is made but is refused as regards the discharge of the Accountant in Bankruptcy,
the Accountant in Bankruptcy shall be discharged from all liability (other than any liability arising from fraud) to the creditors or to the debtor in respect of any act or omission of the Accountant in Bankruptcy in exercising the functions of interim trustee in the sequestration.
(8) The permanent trustee, on being confirmed in office, shall make such insertions in the sederunt book as are appropriate to provide a record of the sequestration process before his confirmation.”
16 (1) Section 27 (discharge of interim trustee) shall be amended as follows.
(2) After subsection (4) there shall be inserted the following subsection—
“(4A) The decision of the sheriff in an appeal under subsection (4) above shall be final.”
(3) After subsection (7) there shall be inserted the following subsection—
“(7A) This section does not apply in any case where the Accountant in Bankruptcy is the interim trustee.”
17 (1) Section 28 (resignation and death of permanent trustee) shall be amended as follows.
(2) For subsection (1) there shall be substituted the following subsections—
“(1) The permanent trustee may apply to the sheriff for authority to resign office and, where the sheriff is satisfied that either of the grounds mentioned in paragraphs (a) and (b) of section 13(2) of this Act applies to the permanent trustee, he shall grant the application.
(1A) The sheriff may make the granting of an application under subsection (1) above subject to the election of a new permanent trustee and to such conditions as he thinks appropriate in all the circumstances of the case.”
(3) In subsection (4), after the words “subsection (1),” there shall be inserted the word “(1A),”.
(4) For subsection (5) there shall be substituted the following subsection—
“(5) Where no new permanent trustee is elected in pursuance of subsection (2) or (3) above, the provisions of section 25A of this Act shall apply.”
(5) After subsection (7) there shall be inserted the following subsection—
“(8) The decision of the sheriff on an appeal under subsection (7) above shall be final.”
18 In section 29 (removal of permanent trustee and provision for where the permanent trustee does not act) in each of subsections (1)(b), (5) and (6) where they occur, for the words “1(3)” there shall be substituted the words “1A(2)”.
19 In section 30(4) (removal of commissioner from office) for the words “1(3)” there shall be substituted the words “1A(2)”.
20 (1) Section 46 (measures to secure the attendance of the debtor and others at private and public examinations) shall be amended as follows.
(2) In subsection (1)—
(a) in paragraph (a) at the end there shall be added the words “to apprehend”;
(b) in paragraph (b) for the words from “request” to the end of the paragraph there shall be substituted the words “grant a warrant for the arrest of”; and
(c) after paragraph (b)—
(i) the words “to apprehend” shall cease to have effect; and
(ii) after the word “and” there shall be inserted the word “to”.
(3) In the proviso to subsection (1) for the words from “paragraph (a)” to “made” there shall be substituted the words “this subsection shall not be granted”.
21 —In section 52 (estate to be distributed in respect of accounting periods), for subsections (1) and (2) there shall be substituted the following subsections—
“(1) The permanent trustee shall make up accounts of his intromissions with the debtor’s estate in respect of each accounting period.
(2) In this Act “accounting period” shall be construed as follows—
(a) the first accounting period shall be the period of 6 months beginning with the date of sequestration; and
(b) any subsequent accounting period shall be the period of 6 months beginning with the end of the last accounting period; except that—
(i) in a case where the Accountant in Bankruptcy is not the permanent trustee, the permanent trustee and the commissioners or, if there are no commissioners, the Accountant in Bankruptcy agree; or
(ii) in a case where the Accountant in Bankruptcy is the permanent trustee, he determines,
that the accounting period shall be such other period beginning with the end of the last accounting period as may be agreed or, as the case may be determined, it shall be that other period.
(2A) An agreement or determination under subsection (2)(b)(i) or (ii) above—
(a) may be made in respect of one or more than one accounting period;
(b) may be made before the beginning of the accounting period in relation to which it has effect and, in any event, shall not have effect unless made before the day on which such accounting period would, but for the agreement or determination, have ended;
(c) may provide for different accounting periods to be of different durations,
and shall be recorded in the sederunt book by the permanent trustee.”
22 (1) Section 53 (procedure after end of accounting periods) shall be amended as follows.
(2) For subsection (2) there shall be substituted the following subsections—
“(2) Subject to subsection (2A) below, all accounts in respect of legal services incurred by the permanent trustee shall, before payment thereof by him, be submitted for taxation to the auditor of the court before which the sequestration is pending.
(2A) Where—
(a) any such account has been agreed between the permanent trustee and the person entitled to payment in respect of that account (in this subsection referred to as “the payee”);
(b) the permanent trustee is not an associate of the payee; and
(c) the commissioners have not determined that the account should be submitted for taxation,
the permanent trustee may pay such account without submitting it for taxation.”
(3) In subsection (3)(a)—
(a) in sub-paragraph (i) before the word “audit” there shall be inserted the word “may”; and
(b) in sub-paragraph (ii) before the word “issue” there shall be inserted the word “shall”.
(4) In subsection (5) for the words “the final” there shall be substituted the word “any”.
(5) In subsection (6) at the end there shall be added the words “; and the decision of the sheriff on such an appeal shall be final.”
23 (1) Section 55 (effect of discharge under section 54) shall be amended as follows.
(2) In subsection (1) for the words “subsection (2)” there shall be substituted the words “subsections (2) and (3)”.
(3) After subsection (2) there shall be inserted the following subsection—
“(3) The discharge of the debtor under the said section 54 shall not affect any right of a secured creditor—
(a) for a debt in respect of which the debtor has been discharged to enforce his security for payment of the debt and any interest due and payable on the debt until the debt is paid in full; or
(b) for an obligation in respect of which the debtor has been discharged to enforce his security in respect of the obligation.”
(4) Section 55 of the 1985 Act shall be deemed always to have had effect as amended by this paragraph.
24 (1) Section 57 (discharge of permanent trustee) shall be amended as follows.
(2) After subsection (4) there shall be inserted the following subsection—
“(4A) The decision of the sheriff on an appeal under subsection (4) above shall be final.”
(3) After subsection (7) there shall be inserted the following subsection—
“(8) This section does not apply in any case where the Accountant in Bankruptcy is the permanent trustee.”
25 In section 58 (disposal of unclaimed dividends) in subsections (1) and (3) in both places where they occur, after the words “section 57(1)(a)” there shall be inserted the words “or 58A(3)”.
26 After section 58 of the 1985 Act there shall be inserted the following section—
(1) This section applies where the Accountant in Bankruptcy has acted as the permanent trustee in any sequestration.
(2) After the Accountant in Bankruptcy has made a final division of the debtor’s estate, he shall insert in the sederunt book—
(a) his final accounts of his intromissions (if any) with the debtor’s estate;
(b) the scheme of division (if any); and
(c) a determination of his fees and outlays calculated in accordance with regulations made under section 69A of this Act.
(3) The Accountant in Bankruptcy shall deposit any unclaimed dividends and any unapplied balances in an appropriate bank or institution.
(4) The Accountant in Bankruptcy shall send to the debtor and to all creditors known to him—
(a) a copy of the determination mentioned in subsection (2)(c) above; and
(b) a notice in writing stating—
(i) that the Accountant in Bankruptcy has commenced the procedure under this Act leading to discharge in respect of his actings as permanent trustee;
(ii) that the sederunt book relating to the sequestration is available for inspection at such address as the Accountant in Bankruptcy may determine;
(iii) that an appeal may be made to the sheriff under subsection (5) below; and
(iv) the effect of subsection (7) below.
(5) The debtor and any creditor may appeal to the sheriff against—
(a) the determination of the Accountant in Bankruptcy mentioned in subsection (2)(c) above;
(b) the discharge of the Accountant in Bankruptcy in respect of his actings as permanent trustee; or
(c) both such determination and discharge.
(6) An appeal under subsection (5) above shall be made not more than 14 days after the issue of the notice mentioned in subsection (4)(b) above; and the decision of the sheriff on such an appeal shall be final.
(7) Where—
(a) the requirements of this section have been complied with; and
(b) no appeal to the sheriff is made under subsection (5) above or such an appeal is made but is refused as regards the discharge of the Accountant in Bankruptcy,
the Accountant in Bankruptcy shall be discharged from all liability (other than any liability arising from fraud) to the creditors or to the debtor in respect of any act or omission of the Accountant in Bankruptcy in exercising the functions of permanent trustee in the sequestration.
(8) Where the Accountant in Bankruptcy is discharged from all liability as mentioned in subsection (7) above, he shall make an entry in the sederunt book recording such discharge.
(9) Where the Accountant in Bankruptcy—
(a) has acted as both interim trustee and permanent trustee in a sequestration;
(b) has not been discharged under section 26A(7) of this Act,
references in this section to his acting as or exercising the functions of permanent trustee shall be construed as including references to his acting as or exercising the functions of interim trustee; and subsection (7) above shall have effect accordingly.”
Bankruptcy (Scotland) Act 1993