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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Pet. - Mylne (M'Callum's Trustee). v. M'Callum [1878] ScotLR 15_292 (22 January 1878) URL: http://www.bailii.org/scot/cases/ScotCS/1878/15SLR0292.html Cite as: [1878] SLR 15_292, [1878] ScotLR 15_292 |
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Page: 292↓
[Bill Chamber,
Where a trustee in bankruptcy presents a petition for discharge, there should be intimation made to such of the creditors as have expressed an unfavourable opinion of his conduct at the statutory meeting of trustees held previously to the making of the application under the 152d section of the Bankruptcy Act of 1856.
This was a question arising under an application by W. K. Mylne, O.A., trustee on the bankrupt estate of John M'Callum, distiller in Crieff. The petitioner was elected trustee on 24th July 1874. He divided the funds of the estate, and on November 7, 1877, called a meeting of creditors under the 152d section of the. Bankruptcy Act of 1856. That section provides that the trustee—“Shall call a meeting of the creditors … to consider as to an application for his discharge, and at such meeting he shall lay before the creditors the sederunt book and accounts, with a list of unclaimed dividends, and the creditors may then declare their opinion of his conduct as trustee, and he may thereafter apply to the Lord Ordinary or the Sheriff, who, on advising the petition, with the minutes of the meeting, and hearing any creditor, may pronounce or refuse decree of exoneration and discharge.” At this meeting four creditors, representing a value of £11, 699, voted for a resolution declaring that the creditors were satisfied with the conduct of the trustee. Two creditors, representing a value of £3290, one of whom was M'Callum the bankrupt himself, as mandatory for his wife, moved a resolution that the trustee should not be discharged, in respect that he had been guilty of gross mismanagement. On November 15, 1877, Mr Mylne presented a petition for his discharge and exoneration to the Lord Ordinary on the Bills. The prayer craved the Lord Ordinary, “after or without hearing the parties who voted for the motion submitted to said meeting, ” to pronounce decree of exoneration and discharge. The Lord Ordinary ordered intimation to the Accountant in Bankruptcy.
In the report issued by the Accountant he noticed that there had been a motion made at the meeting of creditors that the trustee ought not to be discharged, but that there was a majority both in number and value against it. His report concluded thus—“(1) That a majority both in number and value of the creditors present or represented at a meeting duly called for the purpose of considering as to the trustee's application for his discharge, declared themselves satisfied with the conduct of the trustee, and with his accounts, and authorised him to apply for this discharge. (2) The Accountant has not found evidence in the sederunt book to support the charges of mismanagement and failure to account contained in the said motion. (3) The Accountant is of opinion, seeing that no creditors have appeared to oppose this application to the Court, that the petitioner is entitled to his discharge, and to delivery of his bond of caution, in terms of the prayer of the petition.” The Lord Ordinary thereupon exonerated and discharged the petitioner.
The minority of creditors brought the judgment under review by reclaiming note.
It was objected to the competency that this was not properly a reclaiming note, the minority not having been parties to the process in the Outer House. To that it was answered that they should have been made parties to the petition by intimation, and the petitioner could not now take advantage of this omission.
At advising—
Now there is no necessity for the creditors to pass any resolution approbatory of the trustee's conduct as a preliminary to his presenting his petition for discharge; and indeed it may be doubted if it is necessary for them to pass any resolution at all. It is only said that they “may declare their opinion of his conduct.” It seems rather that the only necessary preliminary is that he shall have laid before the meeting the sederunt book and accounts and a list of the unclaimed dividends. When the petitioner presents a petition for his discharge, the question arises—Does it require to be intimated to the creditors? There is always intimation to the Accountant in Bankruptcy. Should there not also be intimation to the creditors—be they a majority or be they a minority of the whole creditors—who have at the meeting previous to the application for discharge announced that they have objections to such an application being made? It does not appear how they are to know without intimation that such a petition has been presented. It may be presented either to the Sheriff or to the Lord Ordinary, and there is no time within which it must be presented. I think it would be a highly dangerous thing that the creditors should not have the opportunity of making their appearance and taking such objection to the trustee's discharge as they may have.
Where the minute of meeting, which is a probative instrument, bears that all the creditors expressed their concurrence, there may be no such necessity, but where the minute bears, as it does here, that there is a difference of opinion which is not altogether contemptible in amount, that constitutes a serious objection to the trustee's discharge. I think that in such a case there ought to be some intimation; and there having been none such here, notwithstanding that there is some sort of suggestion of it in the prayer of the petition, I am for recalling the Lord Ordinary's interlocutor, and remitting to him that he may hear parties.
The Court recalled Lord Adam's interlocutor,
Page: 293↓
Counsel for Petitioner (Respondent)— Lorimer. Agents— Davidson & Syme, W.S.
Counsel for Defenders (Reclaimers)— A. J. Young. Agents— Watt & Anderson, S.S.C.
