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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Muirhead v. Meikle [1917] ScotLR 475 (08 June 1917) URL: http://www.bailii.org/scot/cases/ScotCS/1917/54SLR0475.html Cite as: [1917] ScotLR 475, [1917] SLR 475 |
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Page: 475↓
[Sheriff Court at Glasgow.
Bankruptcy — Appeal — Competency — Election of Trustee — Error in Procedure — Bankruptcy (Scotland) Act 1913 (3 and 4 Geo. V, cap. 20), secs. 67 and 166.
Held that in a competition for trustee in a sequestration, where one of the candidates was founding on assignations which were unstamped, the Sheriff-Substitute should have allowed a motion on his behalf to be allowed to consign the amount of the stamps and penalties, and should thereafter have given effect to the documents in the competition.
Held that the Sheriff-Substitute's refusal of the motion was an error in procedure which it was competent to bring under review notwithstanding section 67 of the Bankruptcy (Scotland) Act 1913.
Tennent v. Crawford, 1878, 5 R. 433, 15 S.L.R. 265, followed.
The Bankruptcy (Scotland) Act 1913 (3 and 4 Geo. V, cap. 20) enacts—Section 67—“The judgment of the Sheriff declaring the person or persons elected to be trustee or trustees
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in succession shall be given with the least possible delay; and such judgment shall be final, and in no case subject to review in any court or in any manner whatever.” Section 166—“It shall be competent to bring under the review of the Inner House of the Court of Session … any deliverance of the Sheriff, after the sequestration has been awarded (except where the same is declared not to be subject to review), provided a note of appeal be lodged with and marked by the Sheriff-Clerk, within eight days from the date of such deliverance, failing which the same shall be final, and such note, together with the process, shall forthwith be transmitted by the Sheriff-Clerk to the Clerk of the Bill Chamber, and the Lord Ordinary's decision shall, when not expressly made final by this Act, be subject to review of the Inner House. …” Robert Wilson Muirhead, C.A., Glasgow, appellant, brought under review a deliverance of the Sheriff-Substitute ( Fyfe) at Glasgow in the sequestration of John Edward Younger, 132 Renfield Street, Glasgow. John Meikle, accountant in Glasgow, appeared as respondent.
At a meeting for the election of a trustee in the sequestration the appellant and the respondent were nominated for that office. No personal objection was taken to either candidate, but a large number of the votes were challenged as not valid for voting. The appellant having founded, amongst other documents, on unstamped assignations, offered to consign the amount of the stamp duty and of the appropriate penalty. The Sheriff refused to sanction this procedure. The Sheriff having made avizandum the appellant moved (No. 35 of process) for leave “to uplift (1) the assignation granted by Robert Deuchar Limited, brewers, Edinburgh, in favour of the Licences Insurance Corporation and Guarantee Fund, Limited, dated 6th and 7th November 1916, and (2) the assignation granted by William Kerr & Company, wholesale wine merchants, 93 Ingram Street, Glasgow, in favour of the Scottish Licenses Mutual Insurance Association, Limited, dated 5th March 1917, in order that said assignations may be stamped with the appropriate stamp duty.”
On 3rd April 1917 the Sheriff-Substitute pronounced this deliverance which was now brought under review—“Finds under reference to the annexed note that upon a scrutiny of the votes the valid vote for the competitor John Meikle, accountant in Glasgow, is £1527, 16s., and that the valid vote for the competitor Robert Wilson Muirhead is £93, 0s. 8d., showing an apparent majority for the competitor the said John Meikle of £1434, 15s. 4d.: Refuses the motion No. 35 of process for the competitor Robert Wilson Muirhead.”
Note.—“… The result of the scrutiny of Meikle's votes is that his recorded vote of £1616, 15s. 9d. is reduced by £88, 19s. 9d., making Meikle's vote in the competition £1527, 16s. … …
The result of the scrutiny of Muirhead's votes is that his recorded vote of £3063, 14s. 4d. is reduced by £2970, 13s. 8d., making Muirhead's vote in the competition £93, 0s. 8d.
Meikle's valid vote in the competition being thus £1527, 16s., and Muirhead's £93, 0s. 8d., there is an apparent majority in favour of Meikle of £1434, 15s. 4d., and the usual practice is to conclude the Sheriff's statement of his opinions on the objections taken in the course of a scrutiny with the formal words which are used in declaring the election of a trustee; but if I do this I will of course foreclose appeal, if appeal is competent; and having regard to the peculiar situation I do not desire to do this or to seem to prejudge the question whether the thirty opinions I have expressed upon objections in the scrutiny are each an interlocutory deliverance, or that the statement of the majority arising upon the vote is an interlocutory deliverance subject to review. At the same time it is a statutory direction that the election of trustee is to be declared ‘with the least possible delay’ (section 67), and as my own personal opinion is that my opinions expressed in the course of a scrutiny are not appealable deliverances, I hesitate very much to refrain from declaring the election of the trustee. The circumstances, however, in this case are very exceptional, and I take it upon myself to delay declaring the election (1) because probably it is not for me but for the Court of Session to say whether appeal is competent; (2) because a great many of the questions discussed and decided in the scrutiny are very important bankruptcy questions upon which it would be exceedingly useful to obtain the opinion of the Supreme Court; and (3) because whilst section 67 directs the Sheriff to declare the election of a trustee ‘with the least possible delay,’ and although the practice is to make this declaratory deliverance along with the determination of the question where the majority of votes lies, the statute does not absolutely bar the formal declaration of the election of trustee being deferred. If I do not declare the election now, I cannot of course do so till the appeal days have elapsed, but as I am taking a very unusual course in not now declaring the election, I shall expect the parties not to cause the election to be deferred for eight days if neither of them proposes to attempt an appeal.
The competitor Muirhead put in a motion two days after the scrutiny of votes and the discussion upon the objections had ended, and he desires me to deal with that motion. I do not think it is necessary to do so, for I have pointed out in my note that in the course of the scrutiny this competitor and the Licenses Insurances Companies whose votes he had were quite willing either to stamp or to consign the stamp duty for the unstamped vouchers founded on, but that I declined to interrupt the progress of the scrutiny to enable the documents to be stamped, or to order consignation, because I thought neither course was competent under the Bankruptcy Act to enable a claim to be reckoned for voting purposes, and because I considered that the Stamp Act did not apply to a scrutiny of votes in
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a bankruptcy. If the motion does require to be formally dealt with, obviously I must simply refuse it, because it asks me to do the very thing I hold I have no power to do, and which the Court in Tennent's case held the Sheriff at Hamilton had no power to do. I think also this motion would in any event have to be dismissed upon two technical grounds—(1) It was not timeously made. It might perhaps appropriately have been put in immediately upon the lodging of the note of objections for Meikle intimating the want-of-stamp objection. I am afraid it was too late after the scrutiny proceedings had been closed and I had made avizandum upon the notes of objections. (2) I do not think the competitor Muirhead, who makes this motion, had a title to make it. Even assuming it to be a competent motion at all, which I gravely doubt, clearly Muirhead could not make it, but only the interested creditors. I do not think, however, that this motion is really of any consequence at all. It was in my view quite unnecessary, even if competent, and the situation is not in any way affected either by the motion having been put in or by my refusing it.” The appellant (Muirhead) appealed to the Court of Session under section 166 of the Bankruptcy (Scotland) Act 1913.
The respondent (Meikle) objected to the competency of the appeal.
Argued for the respondent—The appeal was incompetent. A Sheriff's judgment regarding the appointment of a trustee was, according to section 67 of the Bankruptcy (Scotland) Act 1913 (3 and 4 Geo. V, cap. 20), final and not subject to review. Alternatively as the Sheriff had not declared the election of any person to the office, he had not pronounced a deliverance against which an appeal could be sustained. The Sheriff's decision as to the validity of the various votes was final. An appeal might possibly have been competent had a question of procedure arisen at an early stage— Tennent v. Crawford, (1878) 5 R. 433, 15 S.L.R. 265. That case, however, was a bad precedent to follow— Galt v. Macrae, (1880) 7 R. 888, 17 S.L.R. 635; Reid v. Strathie, (1887) 14 R. 847, 24 S.L.R. 609; Yeaman v. Little, (1906) 8 F. 702, 43 S.L.R. 504; Grierson v. Ogilvy's Trustees, 1908 S.C. 959, 45 S.L.R. 722. These cases made quite plain what the policy of the Act was. Counsel also referred to Wylie v. Kyd, (1884) 11 R. 968, 21 S.L.R. 693, and Farquharson v. Sutherland, (1888) 15 R. 759, 25 S.L.R. 573.
The appellant argued—Under section 166 of the Bankruptcy (Scotland) Act 1913 the appeal was competent. Such an appeal had been regarded as competent in the case of Moncur v. Macdonald, (1887) 14 R. 305, 24 S.L.R. 225. A motion was made that the Sheriff should allow the documents to be after-stamped or allow the stamp duty and penalty to be consigned. This motion having been made in the course of the proceedings, was made timeously, and by section 47 of the Act the Sheriff ought to have acceded to it. His refusal to entertain the motion was unlawful. If the deed was capable of being after-stamped it could be received and the vote in respectthereof was valid— Mories v. Glen, (1843) 6 D. 97. On the face of the deliverance there was no final appointment of a trustee, so that the appeal was at an early stage of the proceedings. The Court of Session could correct an apparent irregularity on the part of a judge of an inferior court even if no appeal on the subject were taken.
At advising—
On the merits I do not think the written motion for Muirhead ought to have been granted. I think that also was decided in Tennent v. Crawford. But the Sheriff-Substitute in his note says—“In the case of Tennent it was not under the Bankruptcy Act but under the Stamp Act that the Court proceeded. But the view of the scrutiny of votes proceedings which I have set forth was not presented to the Court, nor was the question raised whether the Stamp Act applies to a scrutiny of votes in a sequestration. That was not argued nor decided. It was assumed that the Stamp Act applied.” In my opinion the Sheriff-Substitute erred in not allowing the appellant to consign the sum required to pay for the assignation being stamped. That also appears to me to have been determined in Tennent's case. I cannot accept the Sheriff-Substitute's views as to the decision in that case. Lord Deas expressly refers to the Bankruptcy Statute in his opinion on the merits. There is, in my opinion, disclosed on the face of the present proceedings a failure to observe the proper procedure. I am of opinion that we should repel the objections to the competency of the appeal, sustain the appeal, recal the deliverance appealed against, find that the assignation may still be stamped, and remit to the Sheriff to allow the claimant, if so advised, to pay into the hands of the Clerk of Court the stamp duty and penalties, and thereafter to receive the document in evidence.
I do not think in so doing we in any way impinge on what was said and done in Reid v. Strathie, 14 R. 847. All the Judges in the latter case were parties to the decision in Tennent v. Crawford. Lord Shand in the case of Reid, 14 R., at p. 848, said—“If the objection had been one that admitted of instant verification by production of documents, or if a diligence had been asked to recover specified documents, the Sheriff might have allowed that.” I think that quite warrants what we now propose to do even apart from the decision in Tennent.
The Sheriff-Substitute here thought he ought to disregard Tennent's case for the reasons he assigns, and I think therefore
Page: 478↓
Upon the merits of the question involved I think Tennent v. Crawford, 5 R. 433, is an authority binding upon us in the appellant's favour. The Lord President there held the document under consideration to be stampable, and that the Sheriff ought, in a competition of votes for a trusteeship, to have allowed it to be received on payment of the duty and penalties. Lord Deas said—“As to the competency of allowing such a document … to be stamped in a competition of this kind there can be no doubt.” Lord Mure was of the same opinion; and Lord Shand had “nothing to add on the question of stamping documents.”
As regards the respondent's objection to the competency of the appeal, I think Tennent's case is an authority for holding that it is not incompetent. The question, which the Sheriff-Substitute seems to have thought worthy of consideration by this Court, was timeously raised during the scrutiny of votes by the appellant's verbal motion for leave either to take the documents away and get them stamped or to consign the stamp-duty. If the motion had been made in writing, and refused not verbally (as it was) but by a written deliverance, an appeal might, I apprehend, have been competently taken to this Court. By the interlocutor appealed against the Sheriff-Substitute, inter alia, refused a written motion by the appellant for leave to uplift the documents and get them stamped. He was right, as I think, in refusing the motion so made, but I consider that in the circumstances above summarised it is not incompetent for the appellant to raise before us by this appeal his alternative motion for leave to consign. I desire to guard myself by adding that I could not in the general case think it right that a Sheriff should deliberately refrain from following the “usual practice” of concluding “with the formal words which are used in declaring the election of a trustee,” simply in order to leave open a right of appeal which would otherwise be foreclosed. But the course of procedure here adopted has been so odd and exceptional that it does not seem likely to occur again, and in the circumstances which have occurred, and for the reasons stated, I do not think the appeal is incompetent. We should therefore, in my judgment, so find and remit to the Sheriff-Substitute as proposed by your Lordship.
Accordingly if the procedure followed by the Sheriff-Substitute had been in every respect regular, I do not think we could have entertained this appeal, although it is not in form excluded by the 67th section of the 1913 Act. But it appears from his note that two objections related to claims by creditors which were said to be evidenced by defective vouchers as being unstamped. The Sheriff-Substitute records that the claimants offered in the course of the scrutiny either to take the document away and get them stamped or to consign the amount which the Sheriff-Substitute might order to be consigned as the stamp-duty appropriate. The Sheriff-Substitute refused either alternative, and has rejected both claims. If he had embodied this refusal in an interlocutor, I cannot doubt that such an
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The Court pronounced this interlocutor—
“Repel the objections stated by the respondent John Meikle, accountant in Glasgow, to the competency of the appeal: Sustain the appeal: Recal the deliverance of the Sheriff-Substitute appealed against dated 3rd April 1917: Find that the assignation No. 17/1 of process lodged with the claim No. 17 of process for the Licenses Insurance Corporation and Guarantee Fund Limited may still be stamped with the appropriate stamp: Remit to the Sheriff-Substitute to allow said claimants, if so advised, to consign with the Clerk of Court a sum sufficient to cover the appropriate stamp duty on said assignation and penalty, if any, chargeable: Remit also to the Sheriff-Substitute to proceed further as accords. …”
Counsel for the Appellant— Wilson, K.C.— MacRobert. Agent— J. Gibson Strachan, Solicitor.
Counsel for the Respondent— Chree, K.C.— D. M. Wilson. Agents— Menzies, Bruce-Low, & Thomson, W.S.
