POWER OF PERMANENT TRUSTEE IN RELATION TO THE DEBTOR'S FAMILY HOME (Hansard, 22 July 1985)

§ The Solicitor-General for Scotland
I beg to move, That the clause be read a Second time.

§ Mr. Deputy Speaker
With this it will be convenient to take Government amendment No. 23.

§ The Solicitor-General for Scotland
Hon. Members will be aware that the Government have been considering, both in the context of this Bill and the Insolvency Bill. the introduction of the provision to give some protection to certain members of the debtor's family who were living in his property when it vested in the permanent trustee in his sequestration and who are therefore vulnerable under present law to being required to leave that property as soon as the permanent trustee wishes to sell it for the benefit of the creditors.
The new clause achieves that, first, by requiring the permanent trustee to obtain the court's authorisation if he wishes to sell or dispose of the family home. For this purpose, "family home" is defined as meaning any property in which, immediately before the date of his sequestration, the debtor has a right or interest and which is used as a residence by the debtor's spouse or former spouse or by the debtor and his children. Secondly, the clause requires the court to take into account all the circumstances of each case when considering whether to give such authorisation or any action which would have the effect of requiring them to leave that home. Among the circumstances which the court is specifically required to take into account are the needs and financial resources of the spouse, former spouse or children in the family home, the interests of the creditors and the length of time—both before and after the debtor's sequestration—in which they have lived in the family home. Thirdly, the court is empowered to refuse or impose conditions upon the granting of any such authorisation or decree or to postpone the granting of such authorisation or decree for up to 12 months.
I recognise that the provision represents a significant inroad into the rights of creditors to all the assets of the debtor, but it was clear during the Insolvency Bill's passage in another place that there was a strong feeling that some regard should be given in these circumstances to the needs of persons who are dependent upon the debtor to the extent that, as a consequence of the sequestration, they may be evicted from property in which they have lived as their family home. I believe that the provision before us represents a reasonable balance between those conflicting interests, in that it gives the court the flexibility to make an appropriate decision in every case, after weighing up the different interests. I therefore commend it to the House.

§ Mr. Millan
Again I welcome the new clause, which deals with a matter which I raised in the context of another clause in Committee. A consultation document was issued for the Insolvency Bill, and now there is a similar provision in that Bill.
The final words of the Solicitor-General for Scotland sum up the whole business. It is necessary to take account 769 of the interests of the creditors, but, equally, the bankruptcy of an individual should not impose undue hardship on his wife, or, in the case of a bankrupt woman, her husband, and the rest of the family. It is necessary to strike the right balance.
I shall not presume to deal with the clause in detail, because we have had little time to consider the detail of it, but its approach. which balances the interests of the creditor and the family, is right, and gives the court the full power of discretion in dealing with these difficult matters. I welcome the clause, especially the approach adopted in it.

§ Mr. Donald Dewar (Glasgow, Garscadden)
Not for the last time, I echo the words of my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). The Solicitor-General for Scotland properly said that the change was significant and that the new clause was not merely a technical amendment. If one were hostile, one would say that the provisions infringe the rights of the creditor and the powers of the permanent trustee. I think that I speak for many people—I certainly speak for Labour Members—when I say that the provision seems humane and sensible. It is absolutely right that a court should have to give permission for the sale of a home which is occupied by the debtor's spouse or the debtor and his children, and should have the power to weigh all the competing interests and to refuse an application or grant a postponement for up to 12 months to allow the family to make other arrangements for accommodation. Obviously, the matter is important, and the new clause introduces an element of flexibility which is eminently reasonable. I am grateful to the Government for introducing the new clause.

§ The Solicitor-General for Scotland
I am grateful to both the right hon. Member for Glasgow, Govan (Mr. Millan) and the hon. Member for Glasgow, Garscadden (Mr. Dewar) for welcoming the new clause, and the flexibility that it introduces.
I should have drawn their attention to a small technical point. In line 27 of the new clause, as printed, where the word "jointly" appears, there should have been substituted the words "in common". I am sure that, as a distinguished conveyancer, the hon. Member for Garscadden will understand why.