Office of Public Sector Information
(introduced by section 36)
1 The 1985 Act is amended as follows.
2 In section 1A (supervisory functions of the Accountant in Bankruptcy)—
(a) in subsection (1)(a)(ii), for “permanent trustees” substitute “trustees (not being the Accountant in Bankruptcy)”; and
(b) in subsection (2), for “court which” substitute “sheriff who”.
3 (1) Section 2 (appointment and functions of interim trustee) is amended as follows.
(2) For the word “court”, in each place where it occurs, substitute “sheriff”.
(3) In subsection (1), for the word “interim”, where it first and third occurs, substitute “the”.
(4) In subsection (2)—
(a) for “it” substitute “he”; and
(b) for the word “interim”, where it first and third occurs, substitute “the”.
(5) In subsection (3)(c), for sub-paragraphs (i) and (ii) substitute “as the trustee”.
(6) In subsection (7), for the words from “the”, where it first occurs, to “trustee”, where it second occurs, substitute—
“(a) a trustee is appointed in a sequestration where the petition was presented by a creditor or the trustee acting under a trust deed; or
(b) an interim trustee is appointed in pursuance of subsection (5) above,
he”.
4 (1) Section 5 (sequestration of the estate of living or deceased debtor) is amended as follows.
(2) In subsection (2A), for “petition” substitute “application”.
(3) In subsection (2B)—
(a) in both paragraphs (a) and (b), for “of presentation of the petition” substitute “the debtor application is made”; and
(b) in sub-paragraph (ii) of paragraph (c), for the words from “and” to the end of the sub-paragraph substitute “which is not a protected trust deed by reason of the creditors objecting, or not agreeing, in accordance with regulations under paragraph 5 of Schedule 5 to this Act, to the trust deed,”.
(4) In subsection (2C), for “(2)(c)” substitute “(2)(b)(iv)”.
(5) In subsection (4), after “petition” insert “or, as the case may be, the date the debtor application is made”.
(6) In subsection (5), after “petition” insert “or, as the case may be, the date the debtor application is made”.
(7) For subsection (6A) substitute—
“(6A) In the case of a debtor application, the debtor shall send a statement of assets and liabilities to the Accountant in Bankruptcy along with the application.”.
(8) After subsection (7), insert—
“(7A) Where, after a debtor application is made but before the sequestration is awarded, the debtor dies, then the application shall fall.”.
(9) After subsection (8), insert—
“(8A) Where, after a debtor application is made but before the sequestration is awarded, a creditor who concurs in the application withdraws or dies, any other creditor who was a qualified creditor at the date the debtor application was made and who remains so qualified may notify the Accountant in Bankruptcy that he concurs in the application in place of the creditor who has withdrawn or died.”.
(10) In subsection (9)(a), for “(6A)(b)” substitute “(6A)”.
(11) In subsection (10)(a), for “(6A)(b)” substitute “(6A)”.
5 In section 6(5) (combination of certain petitions for sequestration), for “subsection (4)(aa) to (b)” substitute “subsection (4)(b)”.
6 In section 7(2)(c) (end of apparent insolvency), for “when” substitute “until”.
7 In section 9(5) (jurisdiction), after “petition” insert “, the date the debtor application is made”.
8 For section 10 (concurrent proceedings for sequestration or analogous remedy) substitute—
(1) If, in the course of sequestration proceedings (referred to in this section and in section 10A of this Act as the “instant proceedings”)—
(a) a petitioner for sequestration;
(b) the debtor; or
(c) a creditor concurring in a debtor application,
is, or becomes, aware of any of the circumstances mentioned in subsection (2) below, he shall as soon as possible take the action mentioned in subsection (3) below.
(2) Those circumstances are that, notwithstanding the instant proceedings—
(a) a petition for sequestration of the debtor’s estate is before a sheriff or such sequestration has been awarded;
(b) a debtor application has been made in relation to the debtor’s estate or sequestration has been awarded by virtue of such an application;
(c) a petition for the appointment of a judicial factor on the debtor’s estate is before a court or such a judicial factor has been appointed;
(d) a petition is before a court for the winding up of the debtor under Part IV or V of the Insolvency Act 1986 (c. 45) or section 372 of the Financial Services and Markets Act 2000 (c. 8); or
(e) an application for an analogous remedy in respect of the debtor’s estate is proceeding or such an analogous remedy is in force.
(3) The action referred to in subsection (1) above is—
(a) in a case where the instant proceedings are by petition for sequestration, to notify the sheriff to whom that petition was presented; and
(b) in a case where the instant proceedings are by debtor application, to notify the Accountant in Bankruptcy,
of the circumstance referred to in subsection (2) above.
(4) If a petitioner fails to comply with subsection (1) above, he may be made liable for the expenses of presenting the petition for sequestration.
(5) If a creditor concurring in a debtor application fails to comply with subsection (1) above, he may be made liable for the expenses of making the debtor application.
(6) If a debtor fails to comply with subsection (1) above, he shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale.
(7) In this section and in section 10A of this Act “analogous remedy” means a bankruptcy order under the Bankruptcy Act 1914 (c. 59) or an individual voluntary arrangement or bankruptcy order under the Insolvency Act 1986 (c. 45) or an administration order under section 112 of the County Courts Act 1984 (c. 28) in England and Wales or under any enactment having the like effect in Northern Ireland or a remedy analogous to any of the aforesaid remedies, or to sequestration, in any other country (including England, Wales and Northern Ireland).
(1) Where, in the course of instant proceedings which are by petition, any of the circumstances mentioned in paragraphs (a) to (d) of section 10(2) of this Act exists, the sheriff to whom the petition in the instant proceedings was presented may, on his own motion or at the instance of the debtor or any creditor or other person having an interest, allow that petition to proceed or may sist or dismiss it.
(2) Without prejudice to subsection (1) above, where, in the course of instant proceedings which are by petition, any of the circumstances mentioned in paragraphs (a), (c) or (d) of section 10(2) of this Act exists, the Court of Session may, on its own motion or on the application of the debtor or any creditor or other person having an interest, direct the sheriff before whom the petition in the instant proceedings is pending, or the sheriff before whom the other petition is pending, to sist or dismiss the petition in the instant proceedings or, as the case may be, the other petition, or may order the petitions to be heard together.
(3) Without prejudice to subsection (1) above, where, in the course of instant proceedings which are by petition, the circumstance mentioned in paragraph (b) of section 10(2) of this Act exists, the sheriff to whom the petition in the instant proceedings was presented may, on his own motion or at the instance of the debtor or any creditor or other person having an interest, direct the Accountant in Bankruptcy to dismiss the debtor application.
(4) Where, in the course of instant proceedings which are by debtor application, any of the circumstances mentioned in paragraphs (a) to (d) of section 10(2) of this Act exists, the Accountant in Bankruptcy may dismiss the debtor application in the instant proceedings.
(5) Where, in respect of the same estate–
(a) a petition for sequestration is pending before a sheriff; and
(b) an application for an analogous remedy is proceeding or an analogous remedy is in force,
the sheriff, on his own motion or at the instance of the debtor or any creditor or other person having an interest, may allow the petition for sequestration to proceed or may sist or dismiss it.
(6) Where, in respect of the same estate–
(a) a debtor application has been made and has not been determined; and
(b) an application for an analogous remedy is proceeding or an analogous remedy is in force,
the Accountant in Bankruptcy may proceed to determine the application or may dismiss it.”.
9 In section 11 (creditor’s oath)—
(a) in subsection (1), for “petition by a debtor” substitute “debtor application”; and
(b) in subsection (4)—
(i) for “court to which” substitute “sheriff to whom”; and
(ii) after “presented” insert “or, in the case of a creditor concurring in a debtor application, the Accountant in Bankruptcy”.
10 In section 12 (when sequestration is awarded)—
(a) in subsection (1)(c), for “subsections (6) and” substitute “subsection”;
(b) in subsection (2)—
(i) for “court to which” substitute “sheriff to whom”; and
(ii) for “it” substitute “him”;
(c) in subsection (3)—
(i) for “court” substitute “sheriff”; and
(ii) for “it” substitute “he”; and
(d) in subsection (4)—
(i) in paragraph (a), for “the petition for sequestration is presented by the debtor” substitute “a debtor application is made”; and
(ii) in paragraph (b)(i), for “court” substitute “sheriff”.
11 (1) Section 13 (resignation, removal etc. of interim trustee) is amended as follows.
(2) Before subsection (1), insert—
“(A1) This section applies where an interim trustee is appointed under section 2(5) of this Act and the petition for sequestration has not been determined.”.
(3) For the word “court”, in each place where it occurs, substitute “sheriff”.
(4) In subsection (3), for “it” substitute “the sheriff”.
(5) In subsection (6), for “disqualified from acting as permanent” substitute “ineligible to be elected as replacement”.
12 (1) Section 14 (registration of court order) is amended as follows.
(2) In subsection (1)—
(a) for “clerk of the court” substitute “sheriff clerk”; and
(b) in paragraph (a), for “relevant court order” substitute “order of the sheriff granting warrant under section 12(2) of this Act”.
(3) After subsection (1), insert—
“(1A) Where the Accountant in Bankruptcy awards sequestration on a debtor application he shall forthwith after the date of sequestration send a certified copy of his determination of the application to the keeper of the register of inhibitions for recording in that register.”.
(4) In subsection (2), after “subsection (1)(a)” insert “or (1A)”.
(5) In subsection (3)—
(a) after paragraph (a), insert—
“(aa) on the recording under paragraph 11(4)(a) of Schedule 4 to this Act of a certified copy of a certificate;”; and
(b) in paragraph (b), for “paragraph (a)” substitute “paragraphs (a) and (aa)”.
(6) The heading to that section becomes “Registration of warrant or determination of debtor application”.
13 In section 15 (further provision relating to award of sequestration), after subsection (3), insert—
“(3A) Where the Accountant in Bankruptcy, on determining a debtor application, refuses to award sequestration, the debtor or a creditor concurring in the application may appeal against such a determination within 14 days of it being made to the sheriff.”.
14 In section 16 (petition for recall of sequestration)—
(a) in subsection (1)(a), for “petition” substitute “debtor application”; and
(b) in subsection (2), for “petition”, where it first occurs, substitute “debtor application”.
15 In section 17 (recall of sequestration)—
(a) in subsection (1)(c), for “section 10(5)” substitute “section 10(7)”;
(b) in subsection (3)(a)—
(i) after “sequestration” insert “or, as the case may be, the debtor application”; and
(ii) for “permanent” substitute “the”;
(c) in subsection (3)(b), for “petition” substitute “debtor application”; and
(d) in subsection (5)—
(i) in paragraph (a), after “sequestration” insert “, the making of the debtor application”;
(ii) in paragraph (b), for “permanent” substitute “the”; and
(iii) after paragraph (b) insert—
“(c) affect a bankruptcy restrictions order which has not been annulled under section 56J(1)(a) of this Act.”.
16 (1) Section 18 (interim preservation of estate) is amended as follows.
(2) In subsection (1), after “may” insert “, in pursuance of the function conferred on him by section 2(6A) of this Act,”.
(3) In subsection (2)—
(a) for “functions” substitute “function”; and
(b) for “2(4)(a)” substitute “2(6A)”.
(4) After subsection (2) insert—
“(2A) Section 43 of this Act applies to an interim trustee as it applies to a trustee.”.
(5) In subsection (3)—
(a) for “court” substitute “sheriff”; and
(b) in paragraph (c), for “it” substitute “he”.
(6) In subsection (4)—
(a) for “court”, in both places where it occurs, substitute “sheriff”; and
(b) for “it”, in both places where it occurs, substitute “he”.
(7) The italic cross-heading preceding that section becomes “Initial stages of sequestration”.
17 (1) Section 19 (statement of assets and liabilities) is amended as follows.
(2) In subsection (1)—
(a) for “petitioner for sequestration is the debtor” substitute “debtor has made a debtor application”;
(b) for “interim trustee”, where it first occurs, substitute “trustee under section 2 of this Act”; and
(c) for “lodged in court in pursuance of section 5(6A)(a)” substitute “sent to the Accountant in Bankruptcy in pursuance of section 5(6A)”.
(3) In subsection (2), for “2(7)” substitute “2(7)(a)”.
18 In section 20 (trustee’s duty to send information to Accountant in Bankruptcy before statutory meeting)—
(a) in subsection (2)—
(i) after “meeting” insert “or, where the trustee does not intend to hold such a meeting, not later than 60 days after the date on which sequestration is awarded,”;
(ii) in paragraph (a), after “liabilities” insert “(unless the statement has already been received by the Accountant in Bankruptcy by virtue of section 5(6A) of this Act)”; and
(iii) in paragraph (b), at the beginning insert “subject to subsection (2A) below,” and
(b) after that subsection insert—
“(2A) The trustee need not send a statement of the debtor’s affairs to the Accountant in Bankruptcy in accordance with subsection (2)(b) above if the trustee has sent a copy of the inventory and valuation to the Accountant in Bankruptcy in accordance with section 38(1)(c) of this Act.”.
19 The italic cross-heading preceding section 21 becomes “Statutory meeting of creditors and trustee vote”.
20 In section 21A(2) (time limit for giving notice of intention to call statutory meeting), for “of the sequestration” substitute “on which sequestration is awarded”.
21 In section 21B (report where no statutory meeting called)—
(a) in subsection (1)(a), for “sheriff” substitute “Accountant in Bankruptcy”; and
(b) after subsection (1), insert—
“(1A) This section does not apply in any case where the Accountant in Bankruptcy is the trustee.”.
22 In section 22(3)(a) (trustee’s duty to inform creditors outside Scotland), for “21(2)” substitute “21A(2)”.
23 (1) Section 24 (election of permanent trustee) is amended as follows.
(2) In subsection (2), for the word “permanent”, where it first and second occurs, substitute “replacement”.
(3) In subsection (3), for the words “election of the permanent trustee” substitute “trustee vote”.
(4) In subsection (3A)—
(a) for the word “interim” substitute “original”;
(b) in paragraph (a), for the words “election of the permanent trustee” substitute “trustee vote”;
(c) in paragraph (b), for the word “permanent” substitute “replacement”; and
(d) for the words “section 25A of this Act shall apply” substitute “shall continue to act as the trustee”.
(5) In subsection (4)—
(a) for the word “interim”, where it first and second occurs, substitute “original”;
(b) for the words “election of the permanent trustee” substitute “trustee vote”;
(c) for the word “permanent”, where it second occurs, substitute “replacement”; and
(d) after paragraph (b), insert—
“and he shall continue to act as the trustee.”.
24 (1) Section 25 (confirmation of permanent trustee) is amended as follows.
(2) In subsection (1)—
(a) for the word “permanent”, in both places where it occurs, substitute “replacement”; and
(b) for the word “interim”, in both places where it occurs, substitute “original”.
(3) In subsection (2)—
(a) for “permanent trustee” substitute “trustee in the sequestration”; and
(b) for the words from “confirm” to “Bankruptcy” substitute “make an order appointing him as such”.
(4) In subsection (4), in paragraph (b)—
(a) for “interim” substitute “original”; and
(b) for “for the election of a permanent trustee” substitute “at which a new trustee vote shall be held”.
(5) In subsection (5), for “confirmation” substitute “appointment”.
(6) In subsection (6)—
(a) for the word “permanent”, where it first occurs, substitute “replacement”; and
(b) in paragraph (b), for “confirmed in office” substitute “appointed”.
25 (1) Section 26 (provisions relating to termination of interim trustee’s functions) is amended as follows.
(2) Before subsection (1), insert—
“(A1) This section applies where a replacement trustee is appointed under section 25 of this Act.”.
(3) In subsection (1), for the words from “Where” to “office” substitute “The original trustee, shall, on the appointment of the replacement trustee”.
(4) In subsection (2)—
(a) for the words from “confirmation” to “interim”, where it first occurs, substitute “appointment of the replacement trustee, the original”; and
(b) in paragraph (b), for “permanent”, where it first occurs, substitute “replacement”.
(5) After subsection (2), insert—
“(2A) Where the original trustee was appointed under section 2(5) of this Act as the interim trustee in the sequestration, his accounts and the claim referred to in subsection (2)(a) above shall include accounts and a claim for the period of his appointment as interim trustee.”.
(6) In subsection (3)—
(a) in paragraph (a)(ii), for “interim” substitute “original”;
(b) in paragraph (b)(i), for “interim”, where it first occurs, substitute “original”; and
(c) in paragraph (b)(ii)—
(i) for “interim” substitute “original”; and
(ii) for “permanent” substitute “replacement”.
(7) In subsection (4)—
(a) for “interim” substitute “original”; and
(b) for “permanent” substitute “replacement”.
(8) In subsection (5)—
(a) for “permanent” substitute “replacement”;
(b) for “confirmed in office” substitute “appointed”;
(c) for “confirmation” substitute “appointment”; and
(d) for “interim” substitute “original”.
(9) In subsection (5A), for “interim” substitute “original”.
(10) The heading to that section becomes “Provisions relating to termination of original trustee’s functions”.
26 (1) Section 26A (Accountant in Bankruptcy to account for intromissions) is amended as follows.
(2) In subsection (1)—
(a) for “interim” substitute “original”; and
(b) for “becomes the permanent trustee” substitute “is appointed as replacement trustee under section 25 of this Act”.
(3) In subsection (2)—
(a) for “confirmation of the permanent trustee in office” substitute “the appointment of the replacement trustee”;
(b) for the word “permanent”, where it second occurs, substitute “replacement”; and
(c) for the word “interim”, where it first occurs, substitute “original”.
(4) In subsection (3)—
(a) for “confirmation in office of the permanent” substitute “appointment of the replacement”;
(b) for the word “permanent”, where it second occurs, substitute “replacement”; and
(c) in paragraph (a), for “interim” substitute “original”.
(5) In subsection (5), for “permanent” substitute “replacement”.
(6) In subsection (8)—
(a) for “permanent” substitute “replacement”;
(b) for “confirmed in office” substitute “appointed”; and
(c) for “confirmation” substitute “appointment”.
27 (1) In section 27 (discharge of interim trustee)—
(a) in subsection (2), after “debtor”, where it first occurs, insert “, to all creditors known to the original trustee”;
(b) for the word “interim”, in each place where it occurs, substitute “original”; and
(c) for the word “permanent”, in each place where it occurs, substitute “replacement”.
(2) The heading to that section becomes “Discharge of original trustee”.
28 (1) Section 28 (resignation and death of permanent trustee) is amended as follows.
(2) In subsections (1), (1A) and (2), for “sheriff”, in each place where it occurs, substitute “Accountant in Bankruptcy”.
(3) In subsection (4)—
(a) for “and confirmation in office of the”, substitute “of a replacement trustee and the appointment of that”; and
(b) for “confirmation in office”, where it second occurs, substitute “appointment”.
(4) In subsection (5), for “, the provisions of section 25A of this Act shall apply” substitute—
“(a) the Accountant in Bankruptcy; or
(b) such person as may be nominated by the Accountant in Bankruptcy (being a person who is not ineligible for election as replacement trustee under section 24(2) of this Act) if that person consents to the nomination,
may apply to the sheriff for appointment as trustee in the sequestration; and, on such application, the sheriff shall make an order so appointing the Accountant in Bankruptcy or, as the case may be, the person nominated by him.”.
(5) The heading to that section becomes “Resignation and death of trustee”.
(6) The italic cross-heading preceding that section becomes “Replacement of trustee”.
29 (1) Section 29 (removal of permanent trustee and trustee not acting) is amended as follows.
(2) In subsection (7)—
(a) for “and confirmation in office of the”, substitute “of a replacement trustee and the appointment of that”; and
(b) for “confirmation in office”, where it second occurs, substitute “appointment”.
(3) After subsection (9), insert—
“(10) This section does not apply in any case where the Accountant in Bankruptcy is the trustee.”.
(4) The heading to that section becomes “Removal of trustee and trustee not acting”.
30 (1) Section 31 (vesting of estate at date of sequestration) is amended as follows.
(2) In subsection (2), for “the act and warrant” substitute “his appointment”.
(3) In subsection (4), for “the act and warrant” substitute “his appointment”.
(4) In subsection (6)—
(a) for “court”, in both places where it occurs, substitute “sheriff”; and
(b) for “it” substitute “he”.
(5) In subsection (7), for “court” substitute “sheriff”.
(6) The italic cross-heading preceding that section becomes “Vesting of estate in trustee”.
31 Section 31A (proceedings under EC regulation: modified definition of “estate”) as inserted by regulation 12 of the Insolvency (Scotland) Regulations 2003 (S.I. 2003 No. 2109) is renumbered as section 31ZA.
Bankruptcy and Diligence etc (Scotland) Act 2007