PART 1 continued
(6) Where the Accountant in Bankruptcy has been appointed as the trustee in the sequestration, the Accountant in Bankruptcy shall insert a copy of the audited accounts and the determination in the sederunt book.
(7) The interim trustee or any person mentioned in subsection (4)(b) above may, within 14 days after the issuing of the determination under subsection (5)(b) above, appeal to the sheriff against the determination.
(8) On receiving a copy of the Accountant in Bankruptcy’s determination sent under subsection (5)(c)(i) above the interim trustee may apply to him for a certificate of discharge.
(9) The interim trustee shall send notice of an application under subsection (8) above to the persons mentioned in subsection (4)(b) above and shall inform them—
(a) that they may make written representations relating to the application to the Accountant in Bankruptcy within the period of 14 days after such notification; and
(b) of the effect mentioned in subsection (16) below.
(10) On the expiry of the period mentioned in subsection (9)(a) above the Accountant in Bankruptcy, after considering any representations duly made to him, shall—
(a) grant or refuse to grant the certificate of discharge; and
(b) notify the persons mentioned in subsection (4)(b) above accordingly.
(11) The interim trustee or any person mentioned in subsection (4)(b) above may, within 14 days after the issuing of the determination under subsection (10) above, appeal therefrom to the sheriff.
(12) If, following an appeal under subsection (11) above, the sheriff determines that a certificate of discharge which has been refused should be granted he shall order the Accountant in Bankruptcy to grant it.
(13) If, following an appeal under subsection (11) above, the sheriff determines that a certificate of discharge which has been granted should have been refused he shall revoke the certificate.
(14) The sheriff clerk shall send a copy of the decree of the sheriff following an appeal under subsection (11) above to the Accountant in Bankruptcy.
(15) The decision of the sheriff in an appeal under subsection (7) or (11) above shall be final.
(16) The grant of a certificate of discharge under this section by the Accountant in Bankruptcy shall have the effect of discharging the interim trustee from all liability (other than any liability arising from fraud) to the debtor, to the petitioner or to the creditors in respect of any act or omission of the interim trustee in exercising the functions conferred on him by this Act.
(1) This section applies where the Accountant in Bankruptcy is appointed as interim trustee under section 2(5) of this Act and the sheriff —
(a) awards sequestration and appoints another person as trustee under section 2(2A) of this Act; or
(b) refuses to award sequestration.
(2) Where the sheriff awards sequestration and appoints another person as trustee, the Accountant in Bankruptcy shall hand over to the trustee everything in his possession which relates to the sequestration and shall thereupon cease to act in the sequestration.
(3) The sheriff may make such order in relation to liability for the outlays and remuneration of the Accountant in Bankruptcy as may be appropriate.
(4) Within 3 months of the sheriff awarding or, as the case may be, refusing to award sequestration, the Accountant in Bankruptcy shall—
(a) send to the debtor and the petitioner—
(i) his accounts of his intromissions (if any) with the debtor’s estate;
(ii) a determination of his fees and outlays calculated in accordance with regulations made under section 69A of this Act; and
(iii) the notice mentioned in subsection (5) below; and
(b) in a case where sequestration is awarded, send a copy of his accounts, the claim and the notice to all creditors known to him.
(5) The notice referred to in subsection (4)(a)(iii) above is a notice in writing stating—
(a) that the Accountant in Bankruptcy has commenced procedure under this Act leading to discharge in respect of his actings as interim trustee;
(b) that an appeal may be made to the sheriff under subsection (7) below; and
(c) the effect mentioned in subsection (9) below.
(6) The Accountant in Bankruptcy shall, unless the sheriff refuses to award sequestration, insert a copy of the accounts and the determination in the sederunt book.
(7) The debtor, the petitioner and any creditor may, within 14 days after the sending of the notice under subsection (4)(a)(iii) or, as the case may be, subsection (4)(b) above, appeal to the sheriff against—
(a) the determination of the Accountant in Bankruptcy mentioned in subsection (4)(a)(ii) above;
(b) the discharge of the Accountant in Bankruptcy in respect of his actings as interim trustee;
(c) both such determination and discharge,
and the sheriff clerk shall send a copy of the decree of the sheriff to the Accountant in Bankruptcy.
(8) The decision of the sheriff in an appeal under subsection (7) above shall be final.
(9) Where—
(a) the requirements of this section have been complied with; and
(b) no appeal is made to the sheriff under subsection (7) 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 debtor, to the petitioner or to the creditors in respect of any act or omission of the Accountant in Bankruptcy in exercising the functions of interim trustee conferred on him by this Act.”.
(1) Section 21 of the 1985 Act (requirement to call statutory meeting) is repealed.
(2) In section 21A of that Act (calling of statutory meeting where interim trustee is Accountant in Bankruptcy)—
(a) in subsection (1), the words from “where” to “Bankruptcy”, are repealed; and
(b) the heading to that section becomes “Calling of statutory meeting”.
(3) The heading to section 23 of that Act becomes “Proceedings at statutory meeting before trustee vote”.
(4) In section 24 of that Act (election of permanent trustee)—
(a) in subsection (1), for the words “the election of the permanent trustee” substitute “a vote at which they shall—
(a) confirm the appointment of the trustee appointed under section 2 of this Act (referred to in this section and in sections 25 to 27 of this Act as the “original trustee”); or
(b) elect another person as the trustee in the sequestration (referred to in this section and in sections 13 and 25 to 29 of this Act as the “replacement trustee”),
such a vote being referred to in this Act as a “trustee vote”.”; and
(b) the heading to that section becomes “Trustee vote”.
(5) In section 25 of that Act (confirmation of permanent trustee)—
(a) before subsection (1) insert—
“(A1) This section applies where a replacement trustee is elected by virtue of a trustee vote.”; and
(b) the heading to that section becomes “Appointment of replacement trustee”.
(6) Schedule 2 to that Act (adaptation of procedure etc. where permanent trustee not elected) is repealed.
After section 28 of the 1985 Act, insert—
(1) This section applies where a trustee acting as such in two or more sequestrations—
(a) dies; or
(b) ceases to be qualified to continue to act as trustee by virtue of section 24(2) of this Act.
(2) The Accountant in Bankruptcy may, by a single petition to the Court of Session, apply—
(a) in a case where subsection (1)(b) above applies, for the removal of the trustee from office in each sequestration in which he has so ceased to be qualified; and
(b) for the appointment of—
(i) the Accountant in Bankruptcy; or
(ii) 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,
as the trustee in each sequestration in which the trustee was acting.
(3) The procedure in a petition under subsection (2) above shall be as the Court of Session may, by act of sederunt, prescribe.
(4) An act of sederunt made under subsection (3) above may, in particular, make provision as to the intimation to each sheriff who awarded sequestration or to whom sequestration was transferred under section 15(2) of this Act of the appointment by the Court of Session of a trustee in that sequestration.”.
In section 43 of the 1985 Act (money received by permanent trustee) —
(a) in subsection (1)—
(i) for “subsection (2)” substitute “subsections (1A) and (2)”; and
(ii) after “an” insert “interest-bearing account in an”; and
(b) after subsection (1), insert—
“(1A) In any case where the Accountant in Bankruptcy is the trustee, subject to subsection (2) below, all money received by the Accountant in Bankruptcy in the exercise of his functions as trustee shall be deposited by him in an interest bearing account in the name of the debtor’s estate or in the name of the Scottish Ministers in an appropriate bank or institution.”.
(1) In section 1A of the 1985 Act (supervisory functions of the Accountant in Bankruptcy), in subsection (1), after paragraph (a), insert—
“(aa) the determination of debtor applications;”.
(2) In section 2 of that Act (appointment and functions of interim trustee), after subsection (1), insert—
“(1A) Subject to subsection (1C) below, where the Accountant in Bankruptcy awards sequestration of the debtor’s estate and the debtor application—
(a) nominates a person to be the trustee;
(b) states that the person satisfies the conditions mentioned in subsection (3) below; and
(c) has annexed to it a copy of the undertaking mentioned in subsection (3)(c) below,
the Accountant in Bankruptcy may, if it appears to him that the person satisfies those conditions, appoint that person to be the trustee in the sequestration.
(1B) Where the Accountant in Bankruptcy awards sequestration of the debtor’s estate and does not appoint a person to be the trustee in pursuance of subsection (1A) above, the Accountant in Bankruptcy shall be deemed to be appointed to be the trustee in the sequestration.
(1C) Where—
(a) the debtor application is made by a debtor to whom section 5(2B)(c)(ia) applies; and
(b) the Accountant in Bankruptcy awards sequestration of the debtor’s estate,
the Accountant in Bankruptcy shall be deemed to be appointed as trustee in the sequestration.”.
(3) In section 5 of that Act (sequestration of the estate of living or deceased debtor)—
(a) for subsection (2) substitute—
“(2) The sequestration of the estate of a living debtor shall be—
(a) by debtor application made by the debtor, if either subsection (2A) or (2B) below applies to the debtor; or
(b) on the petition of—
(i) subject to subsection (2D) below, a qualified creditor or qualified creditors, if the debtor is apparently insolvent;
(ii) a temporary administrator;
(iii) a member State liquidator appointed in main proceedings; or
(iv) the trustee acting under a trust deed if, and only if, one or more of the conditions in subsection (2C) below is satisfied.”; and
(b) after subsection (4A), insert—
“(4B) A debtor application shall—
(a) be made to the Accountant in Bankruptcy; and
(b) be in such form as may be prescribed.
(4C) The Scottish Ministers may, by regulations, make provision—
(a) in relation to the procedure to be followed in a debtor application (in so far as not provided for in this Act);
(b) prescribing the form of any document that may be required for the purposes of making a debtor application; and
(c) prescribing the fees and charges which may be levied by the Accountant in Bankruptcy in relation to debtor applications.”.
(4) In section 6 of that Act (sequestration of other estates)—
(a) in subsection (3), for the words from “on” to the end of that subsection substitute—
“(a) by debtor application made by a majority of trustees, with the concurrence of a qualified creditor or qualified creditors; or
(b) on the petition of—
(i) a temporary administrator;
(ii) a member State liquidator appointed in main proceedings; or
(iii) a qualified creditor or qualified creditors, if the trustees as such are apparently insolvent.”;
(b) in subsection (4), for the words from “on” to the end of that subsection substitute—
“(a) by debtor application made by the partnership with the concurrence of a qualified creditor or qualified creditors; or
(b) on the petition of—
(i) a temporary administrator;
(ii) a member State liquidator appointed in main proceedings;
(iii) a trustee acting under a trust deed; or
(iv) a qualified creditor or qualified creditors, if the partnership is apparently insolvent.”;
(c) in subsection (6), for the words from “on” to the end of that subsection substitute—
“(a) by debtor application made by a person authorised to act on behalf of the body, with the concurrence of a qualified creditor or qualified creditors; or
(b) on the petition of—
(i) a temporary administrator;
(ii) a member State liquidator appointed in main proceedings; or
(iii) a qualified creditor or qualified creditors, if the body is apparently insolvent.”; and
(d) in subsection (8), for “and (8)” substitute “, (6A), (8) and (8A)”.
(5) After section 6A of that Act, insert—
(1) Where a debtor application is made, the debtor shall state in the application—
(a) whether or not the debtor’s centre of main interests is situated—
(i) in the United Kingdom; or
(ii) in another member State; and
(b) whether not the debtor possesses an establishment—
(i) in the United Kingdom; or
(ii) in any other member State.
(2) If, to the debtor’s knowledge, there is a member State liquidator appointed in main proceedings in relation to the debtor, the debtor shall, as soon as reasonably practicable, send a copy of the debtor application to that member State liquidator.”.
(6) After section 8 of that Act, insert—
(1) Subject to subsection (2) below, a debtor application may be made at any time.
(2) A debtor application made in relation to the estate of a limited partnership may be made within such time as may be prescribed.
(3) The making of, or the concurring in, a debtor application shall bar the effect of any enactment or rule of law relating to the limitation of actions.
(4) Where, before sequestration is awarded, it becomes apparent that a creditor concurring in a debtor application was ineligible to so concur the Accountant in Bankruptcy shall withdraw him from the application but another creditor may concur in the place of the ineligible creditor and that other creditor shall notify the Accountant in Bankruptcy of that fact.”.
(7) In section 9 of that Act (jurisdiction)—
(a) in subsection (1), at the beginning insert “Where a petition is presented for the sequestration of an estate,”;
(b) after subsection (1), insert—
“(1A) The Accountant in Bankruptcy may determine a debtor application for the sequestration of the estate of a living debtor if the debtor had an established place of business in Scotland, or was habitually resident there, at the relevant time.”;
(c) in subsection (2), at the beginning insert “Where a petition is presented for the sequestration of an estate,”;
(d) after subsection (2), insert—
“(2A) The Accountant in Bankruptcy may determine a debtor application for the sequestration of the estate of any entity which may be sequestrated by virtue of section 6 of this Act, if the entity—
(a) had an established place of business in Scotland at the relevant time; or
(b) was constituted or formed under Scots law, and at any time carried on business in Scotland.”; and
(e) after subsection (3), insert—
“(3A) Any proceedings under this Act which—
(a) relate to—
(i) a debtor application; or
(ii) the sequestration of a debtor’s estate awarded following such an application; and
(b) may be brought before a sheriff,
shall be brought before the sheriff who would, under subsection (1) or (2) above, have had jurisdiction in respect of a petition for sequestration of the debtor’s estate.”.
(8) In section 12 of that Act (when sequestration is awarded), in subsection (1), for the words from “petition”, where it first occurs, to the end of paragraph (a), substitute “debtor application is made, the Accountant in Bankruptcy shall award sequestration forthwith if he is satisfied—
(a) that the application has been made in accordance with the provisions of this Act and any provisions made under this Act;”.
(1) In section 5 of the 1985 Act, in subsection (2B)(c)—
(a) the word “either” is repealed; and
(b) after sub-paragraph (i) insert—
“(ia) is unable to pay his debts and each of the conditions in section 5A of this Act is met;”.
(2) After section 5 of that Act insert—
(1) The conditions referred to in section 5(2B)(c)(ia) of this Act are as follows.
(2) The debtor’s weekly income (if any) on the date the debtor application is made does not exceed £100 or such other amount as may be prescribed.
(3) The debtor does not own any land.
(4) The total value of the debtor’s assets (leaving out of account any liabilities) on the date the debtor application is made does not exceed £1000 or such other amount as may be prescribed.
(5) The Scottish Ministers may by regulations—
(a) make provision as to how the debtor’s weekly income is to be determined;
(b) provide that particular descriptions of income are to be excluded for the purposes of subsection (2) above;
(c) make provision as to how the value of the debtor’s assets is to be determined;
(d) provide that particular descriptions of asset are to be excluded for the purposes of subsection (4) above;
(e) make different provision for different classes or description of debtor;
(f) add further conditions which must be met before a debtor application may be made by virtue of section 5(2B)(c)(ia) of this Act; and
(g) where such further conditions are added—
(i) remove; or
(ii) otherwise vary,
those conditions.”.
(1) In section 9 of the 1985 Act (jurisdiction)—
(a) in subsection (1)—
(i) for “Court of Session” substitute “sheriff”; and
(ii) for “Scotland” substitute “the sheriffdom”;
(b) in subsection (2)—
(i) for “Court of Session” substitute “sheriff”; and
(ii) for “Scotland”, in both places where it occurs, substitute “the sheriffdom”;
(c) in subsection (3), for “Court of Session” substitute “sheriff”; and
(d) subsection (4) is repealed.
(2) In section 15 of that Act (further provisions relating to award of sequestration)—
(a) subsection (1) is repealed;
(b) in subsection (2)—
(i) for “Court of Session” substitute “sheriff”;
(ii) for “it”, where it first occurs, substitute “him and subject to subsection (2A) below”; and
(iii) the words from “from” to “remitted” are repealed;
(c) after subsection (2), insert—
“(2A) The debtor may, with leave of the sheriff, appeal to the sheriff principal against a transfer under subsection (2) above.”;
(d) in subsection (3), for “court” substitute “sheriff”; and
(e) in subsection (5), for “clerk of the court” substitute “sheriff clerk”.
(3) In section 16 of that Act (petitions for recall), in subsection (1), for “Court of Session” substitute “sheriff”.
(4) In section 17 of that Act (recall)—
(a) in subsection (1)—
(i) for “Court of Session” substitute “sheriff”; and
(ii) for “it”, in the first and third places where it occurs, substitute “he”;
(b) in subsection (2)—
(i) for “Court” substitute “sheriff”; and
(ii) for “it” substitute “he”;
(c) in subsection (3)—
(i) for “Court” substitute “sheriff”; and
(ii) in paragraph (c), for “it” substitute “he”;
(d) in subsection (6)—
(i) for “Court” substitute “sheriff”; and
(ii) for “it”, in the second and third places where it occurs, substitute “he”;
(e) in subsection (7)—
(i) for “Court” substitute “sheriff”; and
(ii) for “it” substitute “he”; and
(f) in subsection (8), for “clerk of the court” substitute “sheriff clerk”.
(1) In section 31 of the 1985 Act (vesting of estate in trustee at date of sequestration)—
(a) after subsection (1) insert—
“(1A) It shall not be competent for—
(a) the trustee; or
(b) any person deriving title from the trustee,
to complete title to any heritable estate in Scotland vested in the trustee by virtue of his appointment before the expiry of the period mentioned in subsection (1B) below.
(1B) That period is the period of 28 days (or such other period as may be prescribed) beginning with the day on which—
(a) the certified copy of the order of the sheriff granting warrant is recorded under subsection (1)(a) of section 14 of this Act; or
(b) the certified copy of the determination of the Accountant in Bankruptcy awarding sequestration is recorded under subsection (1A) of that section,
in the register of inhibitions.”; and
(b) in subsection (8), after paragraph (a) insert—
“(aa) any property of the debtor, title to which has not been completed by another person deriving right from the debtor;”.
(2) In section 32 (vesting of estate, and dealings of debtor, after sequestration)—
(a) in subsection (8) (dealings with debtor after sequestration to be of no effect), after “under” insert “this section or”;
(b) in subsection (9) (circumstances where post-sequestration dealings with debtor remain valid), after paragraph (b)(iii) insert “; or
(iv) one which satisfies the conditions mentioned in subsection (9ZA) below,”; and
(c) after that subsection insert—
“(9ZA) The conditions are that —
(a) the dealing constitutes—
(i) the transfer of incorporeal moveable property; or
(ii) the creation, transfer, variation or extinguishing of a real right in heritable property,
for which the person dealing with the debtor has given adequate consideration to the debtor, or is willing to give adequate consideration to the trustee;
(b) the dealing requires the delivery of a deed; and
(c) the delivery occurs during the period beginning with the date of sequestration and ending on the day which falls 7 days after the day on which—
(i) the certified copy of the order of the sheriff granting warrant is recorded under subsection (1)(a) of section 14 of this Act; or
(ii) the certified copy of the determination of the Accountant in Bankruptcy awarding sequestration is recorded under subsection (1A) of that section,
in the register of inhibitions.”.